April 12, 2009 – Gold And Silver

As gold and silver spot prices have continued to rise, despite having lost value due to inflation, even more dismal lack of growth in other sectors has spurned a gold rush in developing countries since the early 1990s. With many of these countries being some of the poorest on Earth (and often, those with the poorest human and environmental rights’ protection), the use of toxic materials to mine gold and silver bullion has proven to be an environmental nightmare.

Mercury is one of the most dangerous chemicals to human and other life. It has been used in “amalgam” mining since ancient times, but contrary to popular belief, this practice was outlawed by Rome while the Empire still flourished. Its use in medieval Europe was light only because there was so little gold left.

When the Spanish arrived in Central America, mercury quickly became a local problem, as evidenced by the high residual mercury content found in contemporary gold and silver. Bars, ingots and jewelery exported from these countries often bears traces of the mercury used to produce it.

Later, during the many gold rushes of the 19th century, ice core samples reveal a massive increase in worldwide atmospheric mercury elements. Even after being banned in the US, old mines continue to emit mercury at detectable rates. In fact, fish populations in affected California rivers continue to carry highly abnormal levels over 150 years later, long after the gold and silver spot price has ceased to reflect California mining entirely.

Quicksilver, as it is sometimes called, is a metal with the unusual property of being liquid at room temperature. However, mercury is also volatile, escaping into the air, soils and water around the often rugged conditions at mines in countries such as Indonesia, Mali and Romania. With the use of mercury having been strictly regulated through much of the Developed World in the early 1990s, the industrial output of this neuro-toxin has dropped off considerably since the 1980s. However, the use in emerging nations has caused a steady increase in worldwide contamination since.

Cyanide is used in great quantities in the US and abroad to mine for gold and silver. Investments in research and design have come up with better containment systems, but this also toxic chemical is found in much higher than background levels in many rivers and streams throughout the United States, despite strict controls on cyanide leachate recovery.

Gold and silver investing by those who go to great lengths to investigate the ethics of their purchases will certainly want to consider the long-term environmental impacts of mining in such countries. The purchase of gold and silver coins from most countries assures that the precious metal in question came from a country with strict environmental laws. For instance, American Eagle bullion coins must come from US mines where it has been illegal to use mercury in the mining process for decades.

While gold and silver spot prices continue to climb higher, the demand for gold increases. This is especially true in a world where overall production has slipped in recent years from turn-of-the-millennium peaks. All thing considered, it will take a movement of conscience to have any impact on federal and local governments that allow gold production in areas where vast environmental consequences are simply part and parcel when you buy gold and silver in any form.

Kenneth Hansen 

April 12, 2009

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