Gold has become a safe haven as jittery investors move away from weakened stock markets, and currencies are threatened by inflation. But the allure of gold goes well beyond its future value or price per ounce.
The demand for the precious metal has propelled economic growth in the developing world as investment in exploration has led to significant job creation and improvements in health. Despite this, the industry is under attack by environmental NGOs, which accuse it of bringing poverty and pollution to the regions.
The war on mining is global. In 2007, Newmont CEO Richard Ness was cleared in a 21-month Indonesian criminal trial for the firm’s alleged pollution of Buyat Bay. National Geographic criticized the same operation on the grounds that mine’s benefits—$391-million in local royalties and taxes, 8,000 jobs and $3-million in welfare projects—accrue to only five of the nearest communities.
In Ecuador, NGOs sow alarm among poor communities with claims that if large-scale mining were to start near them, their rivers would be contaminated, their animals and crops would die and their children would fall ill. To prove their point, environmentalists play videos of the damage that mercury, cyanide and arsenic can cause, blithely ignoring the fact that new techniques no longer use those chemicals and cause little environmental impact.
Poverty, not the natural resources industry, is the biggest enemy of people. So what would the anti-mining activists’ success mean for the communities where they are concentrating their efforts?
In Africa and Indonesia, the world’s four largest gold producers—Barrick, Gold Fields, Newmont and Anglo-Gold Ashanti—are engaged in the fight against HIV/AIDS, tuberculosis and malaria, which kill thousands in the developing world every year. The industry works in partnership with nonprofits like International SOS, IFC Against AIDS, African Medical Research (AMREF) and Global Business Coalition on HIV/AIDS, among others.
“Gold mining companies are particularly affected by the triple disease threat of HIV/AIDS, tuberculosis and malaria,” explains Maureen Upton, a World Gold Council official, in a 2008 study. “It is difficult to think of what other industry faces a situation where in certain locations 30% of its employees are infected with a fatal disease such as HIV, or where a similar percentage is likely to be infected with malaria.”
In Ghana, AngloGold Ashanti hired a worldwide authority on insecticide resistance, Professor Richard Hunt, who found that the dominant mosquito species were completely or partially resistant to three standard insecticides but susceptible to another one not being provided by the World Health Organization. The company responded by initiating a program that reduced malaria infections by 73% in scarcely two years.
Also in Ghana, Gold Fields launched the Bowoho Ban (“Protect Yourself “) weekly radio program to educate people about HIV/AIDS. In South Africa, where AngloGold Ashanti’s workforce has an HIVinfection rate of 30%—which, while high, is still lower than South Africa’s national average of 44%—the firm hired AIDS Peer Educators who persuade mine workers and community members to undergo HIV testing and counselling. The response among mine workers during 2007-2008 was 100%, up from 40% during 2006-2007.
Newmont is fighting malaria in Indonesia by distributing bed nets, clearing larvae and talking to residents about malaria prevention. The incidence of malaria among children in the area of Newmont’s project declined from 47% in 1999 to 13% in 2000 (the project’s first year) to 1.5% in 2007.
If mining companies were to pull out in the wake of government or activist pressure, many poor rural communities in developing countries would be left with no job opportunities, hope for development or health programs. Mining companies invest in these programs to keep a healthy and productive workforce, which, in turn, benefits underdeveloped towns.
To take that away would be a crime.
Silvia Santacruz is the Warren T. Brookes Journalism Fellow at the Competitive Enterprise Institute, writer-editor at Ecuador Mining News and a contributor to Openmarket.org.