Gold as resource and commodity

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Gold as resource and commodity

Introduction

Gold is a yellow shiny metallic element that is extracted from earth’s surface. Gold is the most precious metal on earth as recorded in history. This shiny metal occurs in rocks and alluvial deposits. Since time in memorial, gold has been used as a symbol of wealth and as a store of value for many years. More so, gold has been used in monetary laws. It has been estimated that around 160,000 tones of gold has been mined up to the year two thousand and nine. In addition, gold is preferred because of its resistance to oxidative corrosion and its ability to conduct electricity thus it has been used in industries in producing electronics.

Where gold is found and it s history

Gold is a valuable mineral that has a great impact on our lives and it is the less abundant mineral that is found on earth thus making it more precious commodity for people globally but the main question we wonder where gold is found. For most of the time in history, gold has been found at wit waters rand basin that is found in South Africa. In early nineties, South Africa was the world’s largest producer of gold. South Africa has produced nearly forty percent of global gold (Robert, 56-67). In addition, it is believed that a large amount of gold has been unmined at this place with a total estimation of about a third. Apart from South Africa, gold is mined in the United States of America specifically at a place called Nevada that has a large portion of gold output although other states like Alaska, Colorado and California has produced gold (Joseph, 78-81).

However, gold is also found in Asia and Europe where it is mined at large scale production. Gold deposits have also been found in Australia at Ophir and gold fields regions. Australia, South Africa and United States are the largest producer of gold worldwide, which has led to enormous economic growth in these regions. China has also produced gold at large scale. The main gold reserve in china is a place called Shandong. These gold producing reserves is on the spot regarding the manner in which changes that are taking place, mines have been depleted while new ones have been discovered (Tyler & scot, 74-83).

How to mine gold

Mining refers to removal of minerals and other precious materials from the surface of the earth mostly from an ore or a mineral seam. Mining of precious minerals like gold has been thee since time in memorial. What differs is the method of mining because of advanced technology that has led to development of new mining equipments and tools. Modern mining has applied the use of prospecting method for gold seams. More so, it analyses the place to be mined, how the finally extraction should occur and the most important part reclamation of the land in order to make it ready for other purposes once mining has come to an end. Kind of mining activities have created negative results on the environment when mining is taking place and when it has been closed down. This has made gold producing countries to impose safety regulation policies making modern mining somehow safe (Michael, 35-47).

Previously, when people discovered gold at any place, they wanted to have a taste of it. Gold usually existed in beds of rivers people used panning method to clean the gravel until they got accesses to the heavy gold that remained after washing. As time passed by, a more improved technique was used to extract gold from the rocks. They crashed the rocks sifting out the materials that were light thus leaving gold on top.

Mining is a tedious process that undergoes so many steps from the time of discovery of the gold field to final stages of land reclamation. Exploration is commonly used to define the place where gold is found, how deep it is entrenched in the surface and techniques needed to extract the gold. It is important to know the size of the gold deposit this enables economists to easily come up with pre feasibility knowledge in order to know the theoretical economic importance of the gold deposit. The gold miners also find it necessary to determine the financial abilities, and technical risks of mining gold before the actual mining takes place.

There are several techniques used to mine gold from the earth surface. These methods have been divided into surface and sub surface mining. Surface mining is the most commonly used method to extract gold. It aims at placer deposits which contain the precious minerals that are found in river gravels, sands found on beaches and other materials. More so, lode deposits are also another targets where precious minerals are found aligned in layers veins and grains that are widely spread across the rock that contain the mineral. However, both the lode and placer deposits are extracted using the surface and underground techniques.

The placer deposits are then processed using the gravity dependant technique that includes the use of sluice boxes. Washing is necessary to sift the real pure gold from dirt or gravel before final processing is done. The lode deposit is will require the rock to be crashed to enable the extraction of valuable mineral to start. After the rock has been crashed, chemicals are applied to separate pre gold from sands and real gold is retained.

Surface mining is another method used in gold extraction, it involves the elimination of vegetation, any dirt, and bedrock layers were buried deep in the ore deposits. A method commonly used in surface mining includes the use of open pit mining that applies recovery of materials from a pit or collection of building materials from a mine pit. Also strip mining is commonly used and it involves removing of materials from surface layers to expose the hidden seams and bring them out for processing. Most placer deposits are exploited by surface mining because they are not deeply buried underneath like the lode deposits.

Sub surface mining entails the digging of tunnels o the earth’s surface in order to get accessed to the deeply buried gold ore deposits. Waste rocks are excavated to the surface of the earth for processing through the tunnels that have been dug. Drift mining is common method used to extract gold from its deposits as it calls for the digging of horizontal shafts where gold deposits are reached at easily.

During the process of mining, heavy machinery are used for the extraction of gold. Machines help in removal of gold ore from the earth surface and reduce the work force by making work easier than it has been before. Machines are applied to process the ore that has been mined and help a great deal during the time of land reclamation when mining has ended.

Explosives, drills, bulldozers and trucks are very important during gold exploration. For instance, when conducting placer mining, an alluvium is loaded on machine that has a hopper and a trammel that sifts the needed minerals from the chaffs and unwanted wastes like sand and gravel.

Huge drills are used to submerge the shafts and abstain from stopes. In addition trucks and trams are used to transport miners, waste products and minerals while the lifts on the other hand are used to move miners in and out of the mines, they also drive rocks and gold ore out and move other machines in and out of the mining place. Work done by machines in mining gold is great and it has made mining much more easily.

Politics of gold exploitation

Politics are day-to-day activities and they inevitable in human society. Postcolonial politics on gold exploitation has influenced the manner in which gold was exploited in Africa and Asia. For instance, since 1880s, Africa countries were portioned and the main reason was to exploit the natural resources especially precious minerals like gold. Gold mining in countries like South Africa had been affected by politics of the country. For example, the colonial government wanted to exploit its gold and export it to Europe with nothing left for people of South Africa. This moves led to bitter relationship between the people and the colonial power thus creating an oppressive regime. Political violence is evident in that every body in government wants to control mining activities in the country this leads to a sour relationship that eventually leads to death of some people.

Political assassinations are common as people are fighting for this scarce and precious resource. Most countries that are rich in gold deposits have implemented policies in order to protect there gold fields from illegal exploitation by foreigners. Most governments have embarked on operation to end illegal mining and destruction of forest cover a long gold reserve, for example in South Africa along the gold mines of wit waters rand. Senior government officials are denouncing the activities by stating that it a crime for any international and national merchants to pollute the environment thus there is the need to put to an end the activities of mining.

Governments want to control mining activities by ensuring that mining companies operate within legal arenas whereby after obtaining a license to carry out their activities they do so and after they have finished mining, land must be reclaimed. Debates are hot because some people claim that the environment is being affected by use of chemicals like mercury in gold extraction while other people only see it in terms of financial benefits. Furthermore, environmentalists have protested against what they call environmental damage. They have formed lobby groups to educate on the need to protect the environment (Gilbert, 99-114).

History of gold as a resource

Gold has a very rich history despite the fact that it originated from different countries. This is facilitated by the fact that gold has been known to be a common form of currency in many countries all over the world since time in pre history. Gold coins were in use since 650 B.C during the reign of a Turkish king called Gyges who smelted gold for his use as currency. In addition, the Romans too had knowledge of gold when Julius Caesar approved the use of gold coins in payment of wages and other services.

In this 21st century, gold has more value than any mineral in the world as it is used as symbol of wealth. Gold coins are marketed and purchased by anybody because they are accepted on any world market.

How the demand for gold is cultivated and sustained

When the prices of gold increased, there was an enormous increase in the demand of the commodity as a component of investment by many. In an attempt not to spend their money, people opt to pay capital at the time when gold loses popularity. Gold demand has been on the decline for the part of last three decades as compared to investment demand of gold as expressed by Anglo gold a gold producer company in Africa (Mathew,54-76).

Prices of gold on financial markets has been fluctuating a situation that has made financial investors to charge high interest rates this is so because purchases from central banks has declined hence trying to sustain the market. Private investors have been forced to look for an way on how to invest thus hey have opted to use bullion and coins that has accelerated countries to add there mints. For example, the Russians have invested in gold for many years.

Gold is the best commodity to invest in because it prices are unpredictable. Gold investment enhances solid investment therefore, it is not easy to fall a victim of bank failures since it is solid investment. The prices of gold has have had an enormous impact on social and political lives of people who produces it. More so, the economies have either boosted or declined depending on the world market. This has influenced the life of common people in that it is necessary to rely on financial institutions like banks for our investments (Joseph & Applegate, 72-86).

Geopolitics of gold mining

It is evident that geopolitical antics are about to come. For instance, the problems I middle east where Israel is threatening to bomb its neighbor Iran while Iran on other it is not ready to give up its nuclear plans. This creates tension between these two nations as the United States of America tries use diplomacy to solve the problem instead of military intervention. In addition, if this standoff continues, oil tankers will be affected because of the conflicts in Iran and Israel thus making the price of oil to hike. This will influence the prices of gold too which will shoot. More so, the gold and oil price may be worse if the militants in Nigeria decide to attack the bandwagon. The case will not be different if Venezuela imposed high prices on gold from customers who hails from the United States (Thomas, 81-97).

However, geopolitical interruption will affect the world market prices and result in a price hikes. The aftermaths will befall global markets that has already been inflated by debt thereby bringing down capital markets while world currency like the united states dollar and the gold increase in value.

Gold production and consumption

Three main countries are top producers of gold that is; South Africa, Australia and United States. Gold miners use modern technology to locate where the deposits are situated. Other machineries are also used to extract gold from rocks. Gold is consumed in a variety of ways either as commodity or as food. As a commodity, it has been used in stock markets and in trades. Despite, its economical value, gold has been used to prepare some delicious pizzas by different countries all over the world. For example a Japanese gold sake that is eaten when they are celebrating their New Year eve (Gail & e tal, 73-96).

Impacts of gold mining on both humans and environment

Without proper precaution, mining have negative consequences on the environments, ecosystems, water, beautiful sceneries and the landscapes. Remains from the mines can interrupt with mountains stream because of surface mining; for instance, mountaintop and acid liquid can pour from the underground mine fields it destroys the forests and cause health hazards to people. Rivers are destroyed since chemicals that were used to clean gold and drawn in rivers contaminate them. This threatens the life of the animals living in water. Methylated mercury are very poisonous and biocumulative thereby affecting the food chains of the ecosystem. Human beings and other predators end up consuming large amount of mercury thus posing health risks (Dysart & Clawson, 54-74).

Mining of gold also has adverse and harmful effects on the environment. Its effects on water are manifested during flooding days. They cause dangerous damage on housing, roads, carrying away plant activities and the mine itself. Surface mining affects the groundwater this is because of impact of the drainage of usable water from the mines; the level of water can be lowered in the surrounding areas thus making it change its course and the aftermath is the contamination of the usable water due to chemical and poor quality of water from the mine. More so, there is formation of sulphuric acid when the minerals are oxidized with air. This will lead to formation of acidic rain that may corrode the roofs of the houses in the neighborhood and also increase the acidity of the soil leading to infertility of soils. Emissions and byproducts produced after burning coal includes; nitrogen dioxide which lead to formation of photochemical smog and acid after oxidation with air, particulates that can respiratory diseases to both human beings and animals. The carbon monoxide emitted is not fit for human thereby causing respiratory problems to the workers in the mines. Mining of gold is very tedious it requires heavy labor that people are forced to provide in order to secure some revenue for their families (Ronald, 101-121).

Water that is drained in the streams affects aquatic life because this water contains harmful chemicals that contaminate streams. More over, wildlife is also affected in that when the land surface is redistributed and removed, these species are displaced from areas of mining. Those animals that move like birds, game and other animals vacate these areas while reptiles and other burrowing rodents are destroyed forever. Furthermore, since most animals depend on grass grown in drainages as food, for nesting and protection from enemies, these activities distorts their lives completely leaving them vulnerable to death.

To some extend mining activities have some positive impact on wildlife in that when these fields are broken, it creates openings, which acts as there home. Food and cover plants can be introduced to these places for the benefit of the entire wildlife.

Regulation of gold by World Bank

The World Bank and international monetary fund have regulated gold consumption because if it is left to flow in the hands of people, it will bring troubles that may affect economies of nations leading to starvation and inflation. World Bank has been actively participating in mining activities for many years through offering of grants and loans to mining companies. For instance, the multilateral investment agency provides political risk insurance cover. The World Bank has involved sponsored many projects including the funding of projects by providing mechanical and technical assistance to mining companies (Charles & Edgar, 99-117).

The World Bank came up with privatization strategy to ensure smooth exploitation of the scarce resource. This move shifted attention to the environmental aftermath that mining causes and how the local residents react to the extraction process. The main aim of this move is to promote development. World Bank has regulated the prices of gold on markets by supporting local economies of the countries that produce large quantity of gold.

Mining companies

There are many companies that are involved in gold mining therefore they are classified according to there financial stability, the major companies have annual revenue of $ 500 million with the ability to fund its own projects. We have the intermediate company that has $ 50 million revenue per year while the junior company has annual revenue of less than $50 million (Al, 45-53).

Conclusion

All in all, gold mining is a lucrative business that boosts local economies of those countries that produces it. Despite its value, gold mining activities have posed environmental risks through depletion of rain forests for extraction activities. Although it has been seen that politics affects performance of gold prices on world markets while the geopolitics are likely to negatively affect gold performance if the problems are not solved.

Works cited

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