How is Gold Mined?

Mining for gold is a long and expensive process.  The World Gold Council gives 5 stages in the life-cycle of a gold mine.  The first two, exploration and development require up-front investment of time and money before any material is taken from the ground.  Scientists spend many, many years piecing together geological studies and soil test results before deciding that a location is likely to contain enough gold to be work going after. Once a spot is chosen, they may spend several years filing the necessary paperwork and obtaining permission from governments to mine for gold.  Additionally, studies must be completed to ensure that the area can support the infrastructure and the workforce needed to operate the mine.  The mining company must ensure that they can safely get workers to the site, and house and feed them once work begins.  Operations often take place in remote areas without ready access to modern conveniences.  Most importantly, the environmental impacts must be considered to ensure that there will be minimal long term effects on the environment. The mining company has to evaluate whether or not Mother Nature will be able to reclaim the land where the mining took place. This is often referred to as Reclamation. 

The operational stage is when the mine actually starts producing material.  A gold mine also contains other high value metals like copper and silver.  When the rock, referred to as ore, is extracted from the earth, it is exposed to chemicals that will separate the high value metals from the other minerals.  The high value metals are the formed into bars, but don’t think Fort Knox just yet, as these only contain about 60-80% gold.  These bars are them sent to refiners for further processing to achieve the 99.9% purity required for 24k gold.  The amount of gold present in the ore will vary across the mine, and in some places it will be easier to extract than others.  A mining company has to continually assess the profitability of the mine when making decisions about future operations.  If the amount of high value metals or the “yield” is decreasing and the ore is getting harder and harder to extract, then they have to evaluate whether or not to keep the mine open. 

Once the operation of the mine is no longer economical, the decision will be made to close the mine.  This process can take many years as the country where the mine was operating will expect the land to be returned as close as possible to its natural state.  This includes removing hazardous waste and replanting local vegetation.  The life cycle of a mine can run anywhere from 2 to 100 years and if done correctly, provide jobs for the local community in areas where employment options may be limited. In order to ensure they have done their due diligence, the mining company should work with the government to ensure that there are long term plans to support the community once the jobs are gone.    

Of course, this reflects the idea scenario.  There will always be companies that exceed the standard and those that fall well below.  As consumers, it can be extremely challenging to trace back to the source in order to assure ourselves that the gold in our favorite earrings was responsibly mined.  That does not mean that we just cross our fingers and hope for the best!  Awareness of sustainable sourcing is the first step.  At Casual Jeweler, we will continue to learn more about how we can support sustainable sourcing and what questions to ask your salesperson when buying jewelry.  This is a topic we will revisit often as supply chain sourcing for consumer goods is very complex and something that deserves our attention.  We hope that you want to learn with us.  Subscribe below to stay informed.