Resource Snapshot (4): Gold

St. Gallen, July 2011. The World Resources Forum Secretariat continues the series "Resource Snapshots" with gold. You can learn in less than 2 minutes the key issues of this precious metal.

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Applications and use

Gold is often used for industrial uses, due to characteristics such as high ductility, robustness to many chemical reactions and good conductivity of electricity and heat. It is mainly applied in the electrical sector, but also in the medical and dental domain. Scientists are working on new applications for gold, including nanotechnologies, water purification and energy efficiency1.

Round Mountain gold mine

Mining

South Africa has been number one in producing gold for a long period of time, but recently its outputs declined. The US, Canada and Australia also recorded less outputs than before, but still are indispensable in the gold industry.
The leading country in mining gold is China with a production of 320 tons (about 13 percent of global gold production) in 20092. Mining gold produces an immense quantity of waste; for producing one ounce of gold about 250 tons of rock and ore need to be removed3. 

Reserves

Worldwide reserves of gold are 51,000 tons according to the USGS4. Gold scrap is recovered and then remelted, therefore these reserves may last longer than some other finite mineral resources.5.

Recent price developments

The annual average price in 2009 was 973 $ per troy ounce and rose to over 1,400 $ per troy ounce in April 20116.On the 8th of August the price for one troy ounce of gold topped 1,700 $7.Gold is seen as a safe commodity in financial and/or political crisis8, this explains why prices are rising currently since other forms of investment are becoming unpredictable. 

Gold futures

Environmental problems

The use of highly toxic cyanide for ore processing is one of the main problems in gold production. In case of an accident the spilled cyanide kills all life in the watercourses it enters over a considerable distance. Cyanide can also reach the ground water and thus threaten human health9. An other environmental problem is accumulated waste that is pumped into the sea (effluent) or piled in primary forest (rocks)10.

Social problems

Mine workers work under hazardous circumstances. Lethal accidents happen every now and then due to explosions, often caused by inexperienced workers and/or inadequate security measures11. In August 2010 a copper-gold mine in Chile caved in and trapped 33 miners. They were all rescued in October after 69 days in the dark. UNIDO studies show that small-scale mines release a high amount of mercury which affects the workers’ and nearby population’s health12. Another issue can be the relocating of local communities, such as in Rosia Montana, Rumania. 

Gold

Alternatives

Many gold alloys which are used in electronics are being analysed so that they can provide the same performance with lower gold content. Possibilities for substituting gold are platinum, palladium and silver13.

Outlook

Some argue that the gold price will rise due to growing inflation and decreasing GDP14. Many influences, such as geopolitical developments can influence the price developments.

In the last years a decline in gold production has been reported, according to Barrick this trend will continue. Furthermore it says gold's scarcity value will increase15. Recycling will hold its share of supply, but generally expectations are that recycling rates will not significantly increase in the near future 16.  

WRF Resource Snapshot (4) has been compiled by Riccarda Sutter. She would greatly appreciate corrections, suggestions or other remarks, which could improve this document. Suggestions for which other resources to choose are also welcome. Riccarda can be reached at info@worldresourcesforum.org.