Tuesday, October 25, 2005

Investigating Gold's Glitter 

Back in April, 2000, the New York Times published a 5,000 word biography of the diamond trade called Diamond Wars. It was a stunning story of how these intrinsically worthless (the DeBeers cartel ensures the high prices) stones fuel most of the major wars in Africa by posing as a 'woman's best friend.' No, diamonds are simply the cartel's best friend and one of Africa's worst enemies. Now, the Times has done a similar story on gold and the real costs of pandering to yet another human obsession. The story is called Behind Gold's Glitter. Make sure you read it in full before it goes behind the great wall of the Times. Here's a couple of extracts to give you a taste of what to expect.
The price of gold is higher than it has been in 17 years - pushing $500 an ounce. But much of the gold left to be mined is microscopic and is being wrung from the earth at enormous environmental cost, often in some of the poorest corners of the world. And unlike past gold manias, from the time of the pharoahs to the forty-niners, this one has little to do with girding empires, economies or currencies. It is almost all about the soaring demand for jewelry, which consumes 80 percent or more of the gold mined today. The extravagance of the moment is provoking a storm among environmental groups and communities near the mines, and forcing even some at Tiffany & Company and the world's largest mining companies to confront uncomfortable questions about the real costs of mining gold.
Consider a ring. For that one ounce of gold, miners dig up and haul away 30 tons of rock and sprinkle it with diluted cyanide, which separates the gold from the rock. Before they are through, miners at some of the largest mines move a half million tons of earth a day, pile it in mounds that can rival the Great Pyramids, and drizzle the ore with the poisonous solution for years. The scars of open-pit mining on this scale endure.
Something to think about the next time you see someone in your family spend crazy amounts of money to buy gold merely to show off, and display their social standing.