The downside of gold
Gold has fascinated mankind for thousands of years. However, the journey that this much sought-after raw material takes from the mine to luxury item is anything but golden. The mining of gold has significant consequences for the environment and the local people, as shown in the new WWF study «The Impact of Gold».
Switzerland’s role in the international gold trade
3300 tonnes of gold are mined annually.That corresponds to about the weight of 33 blue whales.
From an ecological and social perspective, Switzerland has a special responsibility. Approximately 3300 tons of gold are mined globally every year, 50 to 70 percent of which is refined in Switzerland. Of the seven largest gold refineries in the world, four are located in Switzerland. They are at the heart of the gold supply chain. Switzerland is not only the second largest gold importer in the world, but also the largest gold exporter.
Particularly problematic is the journey that the gold takes from the mine to Switzerland. It is often non-transparent and difficult to trace as gold from different sources is mixed at intermediate trading points. Without being able to trace the gold, it cannot be ruled out that it was produced under deplorable social and ecological conditions.
The consequences of gold mining
Gold is often obtained under horrible social and ecological conditions. Its mining has a tremendous impact on the environment and the local people.
Deforestation & biodiversity
New gold mines and the associated infrastructure require considerable space. Large areas of forest are cleared worldwide for this purpose – often illegally. In Brazil alone, an area of 14,000 football fields is lost to gold mining every year.
Poisoned environment
Highly toxic chemicals, like mercury and cyanide, are often used in gold mining. These end up in the air, the ground, and water, which in turn compromises biodiversity and threatens the health of local inhabitants. Mercury, in particular, can cause blindness, brain dysfunction, and deformities in unborn children, to name a few.
Water consumption
Gold mining can have significant consequences on the quality and availability of water in extraction areas. Mining gold consumes and pollutes large amounts of water which can affect groundwater supplies in arid regions.
Climate
Last but not least, gold mining is energy-intensive. The production of one kilogram of gold results in the equivalent of 12 tonnes of CO2. Global gold production is therefore responsible for three times more emissions annually than all transport operations in Switzerland combined.
Human rights
The WWF study shows that in addition to the significant environmental impacts, gold mining is often associated with poor working conditions, slavery, human trafficking, child labour, and forced prostitution. In addition, there is a disregard for the law and corruption is rife. It is not uncommon for indigenous people to be driven from their homes.
Extent of damage caused by a gold mine on the environment.
Use of gold
«With a voluntary pledge, companies can get involved now and help us make gold mining more environmentally-friendly in the future.»
Globally, 49 percent of gold is used in watches and jewellery, 29 percent is used for investment purposes, 15 percent is bought by central banks, and 7 percent is integrated into technical equipment. Switzerland plays a central role in the watch and jewellery trade.
Switzerland is the leading international exporter of luxury watches, which often contain precious metals such as gold. Swiss watches generate 60 percent of the global trade value of all watch sales.
Furthermore, five of the top ten companies in terms of sales are headquartered in Switzerland; the top three are Swatch Group, Rolex, and Richemont.
Every company that sources gold or works with gold and gold products can bring about a positive change to help the environment. That’s why the WWF is calling on companies to commit to transparent and responsible gold supply chains.
Regulations and politics
There are no statutory regulations related to human rights or environmental issues when gold is imported into Switzerland. Thus, the source of the gold and under which conditions it was mined cannot be ensured. Both the USA and the EU have such regulations.
Tax advantages also play a role in the import of gold. In Switzerland, not only investment gold is tax-free, but also the import of gold coins and gold that will be processed. Alloys with gold content can also be imported as gold. For example, silver can be imported tax-free even if it only contains 2 percent gold. The WWF is calling for legislation that would require the gold buying and gold processing companies based in Switzerland to adhere to minimum standards in regard to social and ecological issues, and to make these public.
Recommendations for consumers
As consumers, we can also do our part to promote more responsible and transparent gold mining and to minimise future environmental damage. Find out how you can reduce the industry’s environmental impact with your consumption.
Interested in finding out more?
Read the whole study: «The Impact of Gold - Sustainability aspects in the gold supply-chains and Switzerland’s role as a gold hub». Find out more about the role gold plays and what the WWF recommends to the various stakeholders in the supply chain.
Other things you can do
As a WWF member, you support our efforts: Among other things, we campaign for a sustainable economy and work together with companies and partners to reach this goal. You can support our work for the environment with a general donation. Together, we can make a change!
