No Golden Future for Emerging Countries: Why refusing to buy artisanal gold is no solution

Artisanal gold mining accounts for roughly 20% of the world's gold production but employs around 80% of the global industry’s miners. Millions of people, including young children, work under highly dangerous conditions for exploitative wages. Accidents are common, and the damage from unprotected contact with toxic chemicals shortens life expectancy to below fifty years.

The majority of commercial gold is refined by large corporations in Switzerland. These companies have been widely criticised for supporting these disgraceful mines, and are now widely responding to pressure by refusing to buy artisanal gold.

In October of 2020, when I read of Metalor's withdrawal of trading from artisanal gold extraction, my first reaction was one of approval. It's clear that other refiners are moving toward similar sanctions. If no one is buying from the artisanal gold mines, are we looking at a future where all gold is obtained ethically and ecologically?

Sadly, I believe that future to be a naive dream, but let's go with it for now. In the case of countries like Burkina Faso, 80% of whose export economy is based on gold, it could spell economic collapse. Vast numbers of people who already survive in abject poverty will lose what little income they have. Metalor's severance of gold trade with Colombia is almost equally de-stabilising, given that country's infamous alternative export.

This is a solution that punishes the people it should be protecting. The cure is unquestionably worse than the disease.

But is it even partially effective? Are we really to believe that the world's appetite for gold will accept an annual reduction in availability of 20%? This is another solution that allows large corporations to distance themselves from an unpleasant truth while doing nothing to actually deal with the underlying problem. And the unpleasant truth here is that artisanal gold will continue to find its way to the market, but producers will be forced to deal it via unregulated parallel markets. What chance is there then of improving working conditions or reducing environmental damage?

We have to work together.

This is a complex problem that's lacking in easy answers but simply shutting the door on it does nothing but make it worse. It's time for co-operation between businesses that can contribute to a lasting solution.