Gold

Workers at a Fairtrade gold mine, ©Eduardo Martino

You cannot drink it, you cannot eat it, and still gold is one of the most precious materials and the most revered embodiment of human luxury and prosperity. Apart from jewellery and ornaments, gold is used as value storage and medium of exchange as well as a raw material for many technological devices such as smart phone batteries and microchips. All this creates tremendous commercial activity around gold and makes its extraction, trade and processing a multi-billion dollar business.

Despite gold’s large economic significance, the metal often yields little returns for the miners that extract it from the soil. This is especially true of the 30 million artisanal and small-scale miners (ASM) who extract roughly 15 percent of the world’s gold and represent 90 percent of the workers in mining. They often face exploitation and dangerous working conditions. Fairtrade established the Fairtrade Gold Standard to give companies and consumers the opportunities to improve the livelihoods of these miners.

Facts about Fairtrade Gold

  • Fairtrade Gold was first launched in the United Kingdom in 2011.

  • Currently, a few gold mines in Latin America supply Fairtrade Gold. Expansion to Africa is under-way and Fairtrade hopes to work with more mining cooperatives in the future.

  • Fairtrade certified mines sold 60 kilogrammes of gold on Fairtrade terms and received around €300,000 in Fairtrade Premium payments in 2013-14, according to the 2015 Fairtrade Monitoring and Impact Report

  • This resembles a payment of €312 in Fairtrade Premium payments per miner, which was paid on top of miners' regular income.

  • Besides gold, Fairtrade certifies other precious metals, which are extracted as side products in Fairtrade certified gold mines.

Benefits of Fairtrade for Artisanal and Small-scale Gold Miners

Fairtrade miners benefit from a Fairtrade Minimum Price for the gold they mine. Twice a day, the London Bullion Market (LBMA)sets the world’s most recognised benchmark price for the global gold trade. The price ASMs receive works out to around 70 percent of the price set by the LBMA.

Fairtrade miners also benefit from the Fairtrade Premium of $2000 per kilogram of gold they sell, which they receive on top of the agreed sales price. In their cooperatives, miners decide together how the Premium should be invested to the benefit of them and their families.  Some have invested in safer and more productive extraction methods, community development measures like education, child and health care, and in environmental protection efforts.

The mining cooperatives now certified by Fairtrade had already made significant efforts to secure their miners’ a better deal of the highly lucrative gold business. Fairtrade has strengthened these efforts by supporting their cause through consultation, knowledge transfers, and by increasing the awareness among gold traders and consumers for the product through publicity campaigns and the FAIRTRADE.

Challenges facing Artisanal and Small-scale Gold Miners

Artisanal and small-scale miners are often people who were not able to find any other form of employment and therefore migrated to a mining area to secure a livelihood for their families. As legal concessions to mine in certain areas are only granted to large mining companies, ASMs often do possess formal rights to extract minerals from the soil. Their migratory and informal work status makes them vulnerable to exploitation and discrimination. For instance, due to the informality of their work miners cannot take legal steps against any unfair commercial practices of their business partners. To address these issues, Fairtrade supports artisanal and small miner cooperatives to acquire legal status for their operations and enables miners to act collectively against any form of discrimination.

The miners’ work has many health and safety risks, especially for ASM. They work in dark, narrow and stifling tunnels with lack of oxygen and poor static protection. These tunnels are often prone to collapse because miners use dynamite to crack gold-containing rock into pieces. The use of chemicals to refine gold out of these pieces is another big risk: Substances like the often-used mercury and cyanide are highly toxic and lead to grave health problems such as memory loss, cognitive and motor dysfunctions, and even failure of essential organs. Fairtrade works with ASMs to reduce the amount of chemicals needed in gold extraction, to raise awareness for health and safety risks and to ensure that proper safety equipment and policies are in place.

Throughout human history gold has not only been a symbol of beauty and prosperity, but also of greed and violence. Unfortunately, on many accounts this has not changed much. Gold is considered a ‘conflict mineral’, meaning that its extraction and trading is oftentimes linked to the financing of large-scale violent conflict and organized crime. Miners often live and work in areas that are marked by instability and unsafety. Here, they are forced to pay Dane geld to armed militias or organized crime groups and have to sell them extracted minerals at an artificial low price. Militias and criminals then enter the lucrative gold trade and generate funds that are often used to bribe government officials and to purchase weapons, which further fuel conflicts. Fairtrade certification aims at banning all forms of conflict minerals from the gold supply chain, so that the gold trade does not fuel instability and conflict in mining areas. At the same time, we request miners to take precautionary measures to enhance their chances to avoid contact with organized crime and to stay out of violent conflicts.

General Gold Facts

  • 90 percent of global gold demand is for high value gold, i.e. gold bullions for value storage and expensive jewellery. The remaining ten percent are used in a wide range of electronical products.

  • Around 1/3 of this demand is covered through recycled gold and 2/3 come from mining extraction.

  • Because of its long-term price stability national governments store large amounts of gold as value reserves. The gold treasure of the United States in Fort Knox is probably the most famous example of this and the public’s uncertainty about its exact size has led to a vast number of speculations, myths and conspiracy theories.

  • India is the world’s number one market for gold jewellery. Hindu religion assigns a high symbolic value to gold and the Indian wedding season has been linked to spikes in global gold prices, because of the quantities of gold jewellery worn and given at wedding ceremonies.

  • Because of mercury’s adverse effects on human health and the environment, several states have signed the 2013 Mercury Convention, a treaty which aims to minimize mercury usage, also in mining.

Buying and Selling Fairtrade

Fairtrade products are sold in over 130 countries. For more information on Fairtrade near you, visit Fairtrade Near You or select one of the countries in blue on the map below. If you’re interested in selling Fairtrade or sourcing Fairtrade products in your country, see our information about selling Fairtrade.

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