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Why all gold doesn't glitter

By Karoun DemirjianContributor to The Christian Science Monitor / April 27, 2006



Whether it's in a wedding band or a class ring, gold glitters everywhere this time of year. But some say such jewelry is tarnished. Adam Avramescu and Ana Wolfowicz, juniors at the University of Texas at Austin, spent the past semester encouraging students and their school's class-ring provider, Balfour, to think twice before buying or selling "dirty gold." "The reaction was, 'We don't do that,' " says Mr. Avramescu. "But right now, all gold is dirty gold."

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Avramescu and Ms. Wolfowicz are among dozens of activists behind the No Dirty Gold campaign, founded two years ago by human rights groups Oxfam America and Earthworks to improve practices in the gold-mining industry. The campaign is not a boycott; followers are asked to pledge to uphold a list of "Golden Rules," which call for safe working conditions and respect for human rights in and around mining sites.

No Dirty Gold says that mines generate about 20 tons of waste for every gold ring made. Most gold deposits in the world consist of microscopic specks that must be extracted chemically from rocks using thousands of gallons of cyanide per day. Toxic runoff, which includes mercury byproducts from the smelting process, is often dumped in bodies of water near mining sites. "The mining industry has been able to operate pretty much as it wants to," says Keith Slack, senior policy adviser at Oxfam America. "Operating without proper regard for the environment lets them operate more cheaply."

Bur mining industry officials reject such claims. John Hall, spokesman for Rio Tinto, an international mining company based in London, says his company has spent "hundreds of millions of dollars" on environmental management and rehabilitation.

His company works with other mining and jewelry companies in the Council for Responsible Jewelry Practices, which plans to release its own code of sustainability principles for its members next week. Michael Rae, who heads the council, says member firms are acutely aware of the need to reestablish trust with consumers.

But rising commodity prices have led new small mining companies outside the council framework to enter the gold market.

Lack of regulation has led to unfortunate results before, social as well as environmental. In Romania in 2000, a cyanide spill destroyed an entire network of rivers. In the 1990s, mines in Ghana displaced over 30,000 people, and the Wassa Association of Communities Affected by Mining cited at least 16 cases where miners were severely beaten or killed.

New players can also make it difficult for gold buyers to know its source.

"When you buy [gold], it can be from a number of different sources that are combined and have been sitting in a central bank for a year," says Tim Jackson, director of investor relations for the Signet Group, which owns the Kay Jewelers retail chain.

Tiffany & Co. began to examine its own supply chain a decade ago, when a Crown Butte Mines Inc. project three miles outside Yellowstone National Park sparked a national wave of protest, says company chairman Michael Kowalski. Six years and "a significant investment" later, Tiffany was drawing all its gold and silver from a single mine in Utah. The company now manufactures 60 percent of its gold items at a facility in Cumberland, R.I.

Though no mine is perfect, improving practices, such as imposing a moratorium on ocean dumping, can reduce harm caused by gold mining while scientists develop technology to keep pace with demands for social responsibility. "It's a moral obligation and a business imperative," Mr. Kowalski says. "Customers expect responsible mining."

So far, 50,000 people in the United States have taken the No Dirty Gold pledge and eight jewelry companies - Tiffany & Co., Zale Corp., the Signet Group, Helzberg Diamonds, Fortunoff, Cartier, Piaget, and Van Cleef and Arpels - have signed on to the international campaign.

"Eighty percent of mined gold goes straight to jewelry," says Oxfam's Mr. Slack. "People don't want to have their symbol of love associated with something negative."

And though customer concerns have not yet been reflected by changes in jewelry purchasing habits, Mr. Jackson says "we should be ahead of that."

Back in Texas, Avramescu and Wolfowicz have collected more than 150 signatures to present to the student government, but have not persuaded class ring manufacturer Balfour to join the campaign.

Balfour vice president of legal affairs Clyde Walls told the Monitor that the company is currently "evaluating" the requests made by the University of Texas students and Oxfam.

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