The case against gold mining

Stephen Lezak1,2,∗, Cavin Wilson, Atif Ansar and Morgan Bazilian 1 Scott Polar Research Institute, University of Cambridge, Cambridge, United Kingdom 2 School of Geography & the Environment, University of Oxford, Oxford, United Kingdom 3 McKinsey & Co., Sydney, Australia 4 Saïd Business School, University of Oxford, Oxford, United Kingdom 5 Payne Institute of Public Policy, Colorado School of Mines, Golden, CO, United States of America ∗ Author to whom any correspondence should be addressed.

In 1511, the king of Spain sent his subjects abroad with the command: 'Get gold, humanely if possible, but at all hazards, get gold.' Five hundred years later, that sentiment-at all hazards-still seems to characterize a substantial share of the global gold industry. In this paper, we show how gold mining, largely driven by demand for jewelry and investment, causes widespread social and ecological harm across the world, while contributing little to basic human welfare. In light of these damages, we argue that gold should be placed alongside coal and ivory as a material whose benefits do not justify its exorbitant social and ecological costs.
Although the full scale of the planetary damage caused by gold extraction is difficult to quantify, some key data points stand out. Most notably, gold production from artisanal and small-scale mines, mostly in the Global South, accounts for 38% of global anthropogenic mercury emissions (UN Environment 2019). These emissions are linked to chronic mercury intoxication suffered by an estimated 14-19 million artisanal gold miners, in addition to 100 million non-miners in nearby communities who depend upon mining-affected food or water systems (Gibb andO'Leary 2014, UN Environment 2019). Mercury poisoning among these populations causes severe neurological issues, such as vision and hearing loss, seizures, and memory problems (Gibb and O'Leary 2014).
Large-scale, industrial gold mining, which supplies 80% of the world's primary gold (Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) (IGF 2017)), also poses major social and environmental challenges. While most modern industrial mines do not use mercury, poor management frequently leads to the unintentional release of other toxins, including arsenic and cyanide, into local environments, where their management creates long-term hazards. In the United States, one-tenth of all industrial toxic waste releases reported to the Environmental Protection Agency in 2019 originated from gold mines; half of these releases contained arsenic compounds (US Environmental Protection Agency 2021). In 2000, when a tailings dam failed at a gold mine in Romania, 100 000 m 3 of cyanide-contaminated water flowed into the Danube River watershed. The spill caused a mass die-off of aquatic life in the river ecosystem and contaminated the drinking water of 2.5 million Hungarians (Koenig 2000).
Alarmingly, these issues are widespread across geographies, including in jurisdictions that are generally well-regarded for their regulation of extractive industries. In 2014, 2015, and 2018, major tailings dam failures occurred at active and legacy gold mines in Canada, the United States, and Australia, respectively. Although policymakers can and should improve mine management and reclamation, decades of environmental regulation have failed to limit the environmental damage of gold mining to acceptable levels. For this reason, we remain cautiously skeptical that future regulation will succeed where past efforts have failed.
Even in the absence of localized disasters, gold mining exacts high environmental and social costs. The carbon footprint of the global gold industry comprises 0.3% of global greenhouse gas emissions, more than all of intra-European aviation (World Gold Council 2018). The water footprint of gold mining is also vast, with one kilogram of gold requiring, on average, 265 000 l of water to produce. One global survey found gold mining to have a cumulative 'global water stress footprint' (calculated by multiplying water consumption and the regional water scarcity index) surpassing every other metal except iron and copper (Meißner 2021). In several major river basins across the world, including many already suffering from climate-and agriculture-induced water stress, the impact of this mining is substantial. In the Senegal River basin, which spans parts of Senegal, Mauritania, Guinea, and Mali, gold mining consumes 5%-10% of total river runoff in the water-stressed dry months between February and May (Meißner 2021, p S3).
Broadly speaking, these steep environmental costs are driven by gold's extreme scarcity. In the course of the 20th century, as high-quality gold deposits were gradually exhausted, average ore grades across the world declined significantly (Mudd 2007). The 21st century has seen this trend accelerate. At many modern gold mines, 1 ton of earth is displaced for every gram of gold produced. The output from these mines belies the damage they incur. The world's most productive gold mine produces roughly 57 metric tons of gold each year-the weekly output could fit into a backpack.
Finally, contemporary gold mining is associated with localized economic volatility, corruption, dispossession of land, and disruption of rural and Indigenous livelihoods (Kumah 2006, Bebbington andHumphreys Bebbington 2018). This is especially true in the Global South, which has become the site of 21st century gold rushes, often in jurisdictions with limited environmental regulation (Maconachie and Hilson 2013) In Mongolia, for instance, where gold accounted for 13% of national exports in 2019, multinational mining firms exercise significant influence over legal and physical landscapes, sidelining the concerns of local populations and receiving special dispensation from national tax authorities (Lander 2020). Scholarship from the last decade alone is rife with instances of gold mining-induced community displacement in Colombia, Democratic Republic of Congo, Guatemala, Peru, and Afghanistan, among others. In Ghana, 30 000 people were displaced by large-scale gold mining between 1990 and 1998 (Hilson and Nyame 2006).
These harms continue to this day-and in many cases are growing-spurred by the scarcity of highgrade ore and rising demand. The estimated global mercury emissions from artisanal and small-scale gold mining increased by 23% from 2010 to 2015 (United Nations Environment Program 2019). In the Amazon Rainforest (spanning parts of Columbia, Venezuela, Guyana, Suriname, French Guiana, Brazil, Ecuador, and Peru), mining-related deforestation grew sixfold from 1985 to 2020, according to analyses of satellite data (MapBiomas 2021). Vast improvements in regulation coupled with process innovations could, in principle, mitigate many of these harms. But there is no indication that transformational change is close on the horizon.

High costs, limited returns
What benefit does gold mining deliver that might justify this catalog of harms? Globally, 8% of gold demand is used for technology. Consumer electronics, semiconductors, and dental implants are among the most common of these applications. The rest of annual gold production is driven either by jewelry or investment demand (i.e. to be stored in bank vaults) (World Gold Council 2020). These market price of these luxuries do not include the cost paid by ecosystems and communities across the world. Although gold is not the only mineral extracted for primarily ornamental purposes, its sheer market size distinguishes it from all other precious metals and gemstones. A 2016 analysis estimated that gold is the largest raw metal market by value (Desjardins 2016). This staggering imbalance of harms and benefits calls us to consider a drawdown of gold extraction as a reasonable ambition for agendas committed to global environmental justice.
Defenders of gold mining frequently point to the metal's important functions in markets and national economies. But the qualities that make gold a valuable investment-scarcity, durable demand, high liquidity, lack of counterparty risk, and the capacity to hedge against inflation and geopolitical instabilitywould be unaffected if gold mining slowed. Gold is valuable in spite of new production-not because of it. Even in a world with dramatically reduced gold production, existing reserves of gold would likely continue to perform exactly the same macroeconomic functions they do today. It is true that the global economy relies in part upon gold-but that is not the same as relying upon mining.
Meanwhile, we cannot minimize the role gold jewelry plays in cultural rites, such as weddings. But jewelry can be made with a large number of metals, like bronze or brass. Gold alloys, which are already commonplace, can be made with less gold to produce a more affordable product. (Only 24 karat gold is 100% gold; 18 karat gold is 75% gold; 12 karat gold is 50% gold, etc.). Time-honored traditions have undeniable cultural value. But as with ivory, which also plays an important cultural function, the maintenance of certain rites is not sufficient to justify destructive paradigms of extraction.

Pathways for change
Reducing gold extraction does not mean putting an end to the buying and selling of gold. Partly because gold is so expensive to extract, it is among the world's most recycled materials. Presently, 0.6% of the world's aboveground gold is recycled annually (including 1.3% of the world's jewelry) (World Gold Council 2020). Because these global gold stocks are Figure 1. Gold stocks and three scenarios of gold flows at model year 1, rounded to the nearest 100 t. From L to R: a business-as-usual scenario with 300 t of surplus; a scenario with no net inflows to investment stocks, leading to a 60% reduction in gold mining; and a scenario with no gold mining and reduced net inflows to jewelry stocks. NB: in any given year, global supply (from recycling and mining) does not necessarily equal demand-this is the case for the data used here. These figures also do not reflect illegal gold production and trade, which are by nature difficult to quantify. One group estimates that in 2013, illegal gold production in Latin America totaled at least 158 tons, worth US $6.9 B at the time (Wagner 2016). Source: World Gold Council.
vast (aboveground reserves are 50 times greater than annual demand), the annual production of gold from recycled sources already supplies 24% of demand (the remaining 76% is mined).
Gram for gram, this recycled gold has a dramatically smaller impact upon land, water, and biodiversity. As with industrial mining, the standard process for recycling gold uses no mercury. But unlike at gold mines, this process is self-contained within industrial facilities that are substantially less likely to release hazardous toxins or emissions, and do not disturb local landscapes. Recycled gold produced with this method generates 0.33% of the greenhouse gas emissions and consumes 0.26% of the water as gold produced at a mine (Fritz et al 2020).
Given the nature of gold supply and demand, the consequences of decreased extraction from primary sources may be relatively low. Using data published by the World Gold Council, we examined two hypothetical stock and flow scenarios for future gold consumption (see figure 1). The first scenario fixes the stock of invested gold (i.e. in bank vaults and national reserves) at present levels. In such a hypothetical world, gold for investment would be traded like Renaissance art: without any new production. In this scenario, if demand for jewelry and technology gold remained constant (along with current recycling rates), the amount of gold supplied from mines would decrease by 60%. Given the relatively low social utility of investment gold, and the potential to alleviate pressure on mining-affected communities and ecosystems, this scenario would advance sustainability and well-being across the world at a low cost to basic human welfare.
In a second scenario, we considered a fully circular gold economy (i.e. with no mining) to ask if recycling alone could meet the demand for technology gold while producing a reasonable surplus to allocate to jewelry production. In this second modeled scenario (see figure 1), we conservatively assumed that present recycling rates remain constant. In such a scenario, recycled gold production in the first year could meet demand for all technological applications. The surplus from those applications would still meet 45% of current demand for jewelry.
Put simply: even a hypothetical near-term end to gold mining would not necessarily derail any of the three central functions of gold in investment, jewelry, and technology. These scenarios are thought experiments in support of a simple conjecture: gold mining does not provide an essential product or service that could not be satisfied by recycling and demand shifting.
These scenarios are not pathways but proofs of concept. In practice, the shift to a more circular gold economy could only be realized through a series of incremental changes and, in any case, would likely involve some continued flows of primary gold. For instance, artisanal gold mining provides income to millions around the world. This industry should not be curtailed without ensuring a just transition for local communities, similar to ongoing efforts to assist communities with economic dependencies on coal production (Harrahill and Douglas 2019). Similarly, gold is a byproduct at many copper mines, and helps defray the cost of extracting copper, a critical mineral for the global energy transition. These sources of gold, and their trade-offs and benefits, warrant further research and discussion from experts and advocates.
Going forward, conversations about the future of gold mining should not take extraction for granted. Moving away from an extractive paradigm in the gold industry deserves attention from stakeholders in industry, policy, and academia. The social and industrial consequences of such a shift could be responsibly managed, while bringing immediate benefit to ecosystems and watersheds across the world and easing the pressure on a rapidly dwindling global carbon budget.

Closing the loop
The unique features of the gold industry allow a plausible pathway to transition from an extractive paradigm to a circular model. Like the coal industry, gold mining provides value to a wide variety of stakeholders, including to miners and their communities. The most pressing question for scholars, investors, industry, and policymakers is whether gold mining, like fossil fuel extraction, should be gradually phased out in a manner that balances legitimate competing interests.
A sustainability-driven turn away from gold mining would create winners as well as losers, transferring value from present-day gold miners to those already in possession of gold stocks. In turn, belowground gold reserves would become a new class of stranded assets. At present prices, the world's 20 largest gold mining firms have US $1.3 trillion in estimated minable belowground reserves (Anders 2018). (This is relatively small compared to the estimated US $12 trillion of stranded fossil fuel assets (Mercure et al 2018).) Losing these reserves would be a bitter pill to swallow for investors and would require support for miners and their transitioning communities. This is particularly true of artisanal gold mining, which accounts for roughly 20% of global primary gold production (Schwartz et al 2021) and supports an estimated 150 million livelihoods (IGF 2017). A World Bank publication describes artisanal mining (for gold and other minerals) as 'the most important rural non-farm activity in the developing world' (World Bank 2019). But the stranding of industrial assets cannot justify gold extraction in perpetuity, just as the fiscal health of fossil fuel companies cannot justify the long-term burning of coal, oil, or gas.
Future research is needed on these important topics. How can artisanal gold mining communities benefit from moving away from extraction? How should investors deal with treating belowground gold reserves as stranded assets? How can governments retrain miners for other employment and provide incentives to gold companies to accelerate the retirement of their mines? How can consumers be respectfully and effectively engaged on the importance of choosing recycled gold instead of primary goldor not purchasing gold in the first instance? What lessons can be drawn from other materials whose social licenses have been curtailed, including fossil fuels and elephant ivory? These questions and others will be important to the paradigm shift away from extraction.
In tandem with this research agenda, leadership toward a more circular gold economy could come from a variety of stakeholders in the public and private sectors. On the demand side, large gold buyers, such as jewelers, could procure exclusively recycled gold (several jewelry makers are already doing so). Governments could do the same by restricting how their central banks source new reserves-or whether they purchase gold at all. These shifts will require a heightened level of traceability in a market that is relatively opaque. New technologies, including the use of distributed ledgers to trace and audit chains of custody, are likely to facilitate unprecedented levels of transparency-if industry chooses to adopt them. Already, growing demand for secondary gold is showing the potential to bifurcate the commodity market, similar to Fairtrade coffee, causing recycled gold to fetch a higher price. If this price split were realized, it would drive increased recycling rates; and a decreasing price for mined gold would reduce investors' enthusiasm for new mining developments.
On the supply side, impact-minded intergovernmental lenders, such as the World Bank (which already has a de facto prohibition on funding new coal projects), could stop financing new gold mines. Since 2010, the International Finance Corporation, the World Bank's investment arm, has invested $800 million in nine gold mines in Africa, Asia, South America, and the Pacific Islands (International Finance Corporation 2022). Other institutional investors and endowment managers could exert shareholder pressure by investing only in mining companies with gold-free portfolio commitments. These actions would impose significant reputational harm to gold producers. Finally, mining firms, many which have already laid out robust sustainability commitments, could lead within their industry by pledging to stop developing new gold mines and to accelerate the retirement of existing capital assets.
In an era when the human and environmental costs of extractive industries are clearer than ever, gold mining stands out for the intensity of its harmful impacts. But unlike fossil fuels, which heat homes and generate electricity, the continued production of primary gold makes a limited contribution to basic human welfare. The transition to a circular gold economy offers a plausible, if partial, pathway toward a more sustainable world.
3.1. Supplement: a note on the model above Implied recycling rates were calculated from the mass of gold recycled in 2020 (1292 tons) 5 , the share of that mass derived from jewelry versus technology sources (90% and 10%, respectively) 6 , and above ground stocks of jewelry and technology gold (93 393 and 29 751 tons, respectively) 7 . This yields an annual gold recycling rate of 1.25% for jewelry stocks and 0.43% for technology stocks.
Next, we considered 2018 primary gold production (3347 tons) 8 and 2018 demand for jewelry and technology gold (2200 and 335 tons, respectively) 9 to show that annual technology and jewelry demand (2535 tons) could be met with recycling plus 37% of current primary gold production (Scenario 1). We also calculate that, absent any primary production, recycled gold net of technology demand would leave an annual surplus of 957 tons, or 44% of current demand for jewelry gold (Scenario 2). Finally, we use a recursive model to test whether a decline in the amount of jewelry available for recycling will meaningfully reduce the supply of new jewelry. We find that even by 2100, recycled gold will still meet 38% of jewelry demand.

Data availability statement
The data that support the findings of this study are available upon request from the authors.