Rapaport Magazine
Colored Gemstone

A Golden Opportunity

Responsible practices are making strides toward lessening the environmental and social impact of gold mining.

By Brook Showell

Toby Pomeroy
It’s a not-so-little secret — mining gold is a particularly volatile endeavor that threatens the sustainability and diversity of the earth. The facts are alarming: A single gold ring produces, on average, 20 tons of mine waste, according to calculations made by No Dirty Gold, a campaign by Earthworks, a Washington, D.C., nonprofit environmental organization. Each year, metal mines in the United States generate an amount of solid waste equivalent in weight to nearly nine times the garbage produced by all U.S. cities and towns combined, says No Dirty Gold. 
   Toby Pomeroy, president of Toby Pomeroy jewelry design company in Corvallis, Oregon, and board member of the Alliance for Responsible Mining (ARM), presented the statistics at his seminar, “Minding the Planet While Mining the Planet,” at the American Gem Trade Association (AGTA) 2013 GemFair in Tucson, Arizona. An advocate of sustainable and ethical jewelry, Pomeroy works only with materials certified to be conflict free, environmentally sustainable and socially responsible.
   Mining’s impact is not limited to solid waste. In fact, in 2011, metal mining was responsible for 46 percent of all reported toxic chemicals released into the air, water and land, according to the U.S. Environmental Protection Agency’s (EPA) Toxics Release Inventory National Analysis.
   While there’s no quick or easy solution, the industry is now taking steps toward developing more socially and environmentally responsible mining practices. Artisanal and small-scale mining (ASM) is an increasingly viable alternative to large-scale mining (LSM), which is destructive to the landscape and its surrounding communities. ASM’s carbon footprint is far smaller than LSM and leaves behind significantly less solid toxic waste. Naturally, environmental challenges still exist with ASM, but experts note that a transition to slower, smaller and monitored mining operations offers a better alternative than aggressive, industrial-scale land use.
   The major roadblocks to change are the expense of new equipment and the cost and time involved in implementing new mining practices for large companies. However, “outrage by small communities who have lost their jobs and their drinking water will hopefully be a big enough concern to help change large companies,” notes jewelry designer and goldsmith Alexandra Hart of San Diego, California. Hart describes it as a rising tide: “It’s huge and slow, but the whole environment is starting to be aware of it. This new ‘green’ concern is now more accepted conversation among the trade.”

ASM At Work
   There are currently approximately 15 million to 20 million ASM miners producing 200 to 300 tons of gold annually, according to research by the International Labour Organization (ILO) and the Fairtrade Labeling Organization (FLO). ASM operations represent 10 percent to 15 percent of global gold production. In total, an estimated 100 million people depend on ASM for their survival.
   “If practiced responsibly, we can secure sustainable development opportunities for these people, helping them escape the poverty trap artisanal miners are often caught in,” says Siri Teilmann-Ibsen, communications manager for ARM. Christina Miller, executive director of Cincinnati, Ohio–based Ethical Metalsmiths — an organization dedicated to increasing awareness of responsible mining, sustainable economic development and verified, ethical sources of materials used in making jewelry — says that to help bring responsibly mined gold to the market, the organization has developed a consortium of about 30 small jewelers, which is planning a mass purchase of responsible gold that will be imported for the U.S. market. The group’s goal is to order a minimum of approximately 4.6 pounds of Fairtrade gold initially, and in the next three years or so to increase that order to approximately 2.3 pounds or more per month. “ARM recognized that small groups of miners are professionals,” says Miller, “and that they could have a stronger seat at the table if they organized better.”

Fairtrade and Fairmined
   In 2009, Fairtrade International (FLO) in the U.K. and ARM worked together to evaluate which mines fit the fair trade model, and they established the Fairtrade Fairmined label to bring these metals to market. The label signifies that gold has been extracted and processed in a fair and responsible manner. In order to be certified, mines must comply with extensive criteria and be audited by FLO-CERT, an independent, international fair-trade certification body. With such certification, miners get better bargaining power with traders, a fairer price for their gold, improved working conditions, responsible use of chemicals and social development in their communities.
   A small number of Fairtrade Fairmined gold mines are located in Bolivia, Colombia, Ecuador and Peru, with additional miners in Africa, Asia and Latin America. One example is Colombia’s Oro Verde, where 112 families currently practice alluvial mining, in which miners pan for gold without mechanized dredging and with minimal disruption to the environment. At the local community farm, families raise food and fish cooperatively, and a portion of the proceeds is earmarked to support education.
   “The communities love being acknowledged as visionary leaders. For them, this new way of mining is a way of life,” says Pomeroy, whose company sources its gold from Oro Verde. Another example of fair trade-influenced operations is the SOTRAMI mine in the Peruvian highlands, which was established in 1989 and started trading under the Fairtrade label in 2011 — it now has about 300 workers.
   In March 2013, Fairtrade Fairmined Gold announced two separate labels, Fairtrade Gold and Fairmined Gold, will be used to expand the system’s reach and make it even more accessible to artisanal and small-scale miners, organizations and gold traders. This is a new initiative and currently under review, but experts such as Pomeroy and Miller anticipate that Fairtrade Gold and Fairmined Gold will essentially be the same product, with little difference between the two labels. As for Ethical Metalsmiths’ hope for what the new label might offer, “We’re looking for a licensing initiative that provides affordable entry for jewelers, makes the whole system of tracking product easy and offers support in terms of marketing,” Miller says.
   “A truly holistic approach needs to be based on national policies aiming for development of the ASM sector, sustainable livelihoods for miners’ communities and inclusion of ASM in the international economy,” Pomeroy states. He adds, “Through buying Fairtrade and Fairmined gold from responsible ASM operations and telling the story of the most rare and pure gold in the world, we elevate our companies and the entire supply chain down to the miners, giving our customers a reason to buy and reason to feel absolutely proud of their purchases.”

Paying a Premium
   In general, experts anticipate consumers will pay about 10 percent to 15 percent more for Fairtrade and Fairmined Gold, to reflect the more labor-intensive way it is processed, refined and alloyed. But just as people are willing to pay a premium for fair trade coffee or organic blueberries, responsibly mined metal is an opportunity to purchase something extra special with an enticing story. Hart anticipates the education will begin with designer goldsmiths marketing their socially responsible jewelry products to the luxury-oriented market, after which the concept will spread to the mass market.
   Just as consumers now seek out conflict-free diamonds or fair trade colored gemstones, marketing the idea of responsibly mined metals is key. “Consumers are the ones who are driving the market, and if we don’t educate them, the market isn’t going to change,” Hart says. Designers and retailers must tout the benefits of ethically sourced material and promote transparency in the process, which includes providing proper third-party certification to reassure the buyer. “Jewelers are really leading the way right now in trying to come up with solutions from a diverse range of methods,” Miller says.
   Of course, gold that also does good presents an opportunity to make each piece of jewelry even more unique. Pomeroy adds: “Our industry is about the rare, beautiful, special, distinct. Being able to talk about gold in a way that we’ve never been able to is such a benefit. When someone walks into a jewelry store, they’re always looking for the best they can afford — a story that inspires, something they can be proud of.” A product with a socially and environmentally responsible background may provide just the story the industry is looking to tell. 

Article from the Rapaport Magazine - May 2013. To subscribe click here.

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