Worldwide Gold Rush Causing Long-Term Enviro Damage

In Australia, where gold production has increased nine-fold since 1980, mining analysts say they expect a 40 percent rise in output by 1999. Argentina, which produced a smattering of gold in 1995, will soon be producing nearly a million ounces per year.

Global gold production has jumped by more than 50 percent over the past 10 years. But the environmental impacts are being ignored, critics contend.

And analysts expect that over the next three years, production will increase by 15 percent. Most of the new production is occurring in such developing countries as Ghana, Guyana, Indonesia, Peru, and Tanzania, which have recently become major gold exporters.

Discovered in 1995 by Canada-based Bre-X Minerals, the deposit contains at least 57 million ounces of gold -- worth $21 billion at today's prices -- and may contain two or three times that amount.

Bre-X announced in mid-February that it had formed a partnership to mine the gold with the New Orleans-based Freeport McMoRan, a company with a long history in Indonesia and a cozy relationship with the country's leaders.

The deposit has launched a fierce battle among North American gold producers for a slice of Busang's riches.

Toronto-based Barrick Gold launched an expensive lobbying campaign within the Indonesian government. The biggest gold producer outside South Africa, the company has a market value of about $10 billion, and it used two members of its advisory board, former Canadian prime minister Brian Mulroney and former U.S. president George Bush, to convince Indonesian President Suharto, that it was the best company to develop Busang. Its efforts were unsuccessful.

Meanwhile, London-based RTZ, the world's largest mining company, and Houston-based Battle Mountain Gold plan to begin mining early next year on the island of Lihir in Papua New Guinea. The island holds an ore body of at least 14 million ounces of gold.

In Peru, the Denver-based Newmont Mining, has begun producing about half-a-million ounces of gold per year at its Yanacocha mine. Yanacocha is one of several dozen mines in South America now coming on-line.

Chad Williams, a Montreal-based mining analyst for Research Capital Corporation, says the gold mining boom has not been spurred by a jump in prices.

The price of gold has been relatively stable -- at $350 to $400 per ounce -- for the past decade. Instead, Williams says the boom is being driven by new mining technology that has helped geologists find new deposits.

"People have made a lot of money and that has attracted a lot of money," says Williams.

He says computer-aided mapping along with advances in geophysics and geochemistry are allowing geologists to more easily determine the size and value of a deposit. More importantly, miners can utilize ore bodies previously thought too small or too low in gold content to be profitable.

The process, called heap leaching, was developed three decades ago by the U.S. Bureau of Mines. By spraying a cyanide solution over the ore, gold miners can profitably use ore bodies containing as little as half-a-gram of gold per ton.

John Lutley, president of the Gold Institute, which represents more than 60 companies in the mining, banking, and refining industries, says, "India is now the most important gold market in the world. There are 150 million middle class people in India. They have some disposable income and they love precious metals."

But the new gold production is coming at a cost. The most common method of gold production -- open pit mining -- may have long-term negative effects on the environment, critics say.

U.S. scientists are increasingly concerned about the effects the mining industry is having on ground water and wildlife in the state of Nevada, which accounts for more than half of all U.S. gold production.

According to John Miesner, a biologist with the U.S. Fish and Wildlife Service in Reno, Nevada, "There are long-term issues that haven't been resolved."

Miesner predicts the gold industry will leave three dozen huge pits in Nevada that may be as much as 4.8 kilometers long, 2.4 kilometers wide, and half-a-kilometer deep. Some of the pits may contain water one-third of a kilometer deep.

If the rock in the pits begins to generate sulphuric acid which in turn liberates heavy metals in the rock, says Miesner, "there's nothing you can do. It's just too big."

And although the industry is working to reduce the environmental impact, problems are occurring at many sites.

In 1995, the Omai gold mine in Guyana, operated by Canadian companies Cambior and Golden Star Resources, temporarily shut down after 400 million gallons of cyanide-laced tailings spilled into the country's main river system. The accident sent ripples through the gold industry around the world.

In the United States, the government will spend at least $100 million to contain toxic waste from the Summitville mine in Colorado, a venture that was abandoned by its operators.

Philip Hocker, the president of the Washington-based Mineral Policy Center, says the global gold rush is happening with little regard for the future.

"We are experimenting on a magnificent scale," he says, "with resources that we won't be able to afford to repair."