GOLD IN THE ANDES
Major gold producing regions in the Andes are found in Colombia, northern Peru, and to a lesser extent, northern Chile. Many small-scale miners, illegal or informal miners, pursue thin veinlets in most Andean countries. The grades from these tend to be low, and so is the production. Most of the historic Andean gold has been sourced from alluvial deposits along rivers terraces, such as the major gold fields in the Madre de Dios jungle of Peru, or the Pacific pediments of Colombia in the Departments of Choco and Nariño, and from large-scale deposits belonging to several different geological classes. What are known as low-sulphidation vein deposits include Fruta del Norte in Ecuador, Arcata and Orcopampa in Peru, and El Peñon of Chile, which account for about 14.2 million ounces of gold from production and reserves reported on ten mines out of a total of 40 occurrences in this system category. Low-sulphidation veins formed from relatively neutral pH fluids, have distinctly banded veins filled with quartz, chalcedony, and opaline silica, which may be accompanied by adularia, rhodochrosite, and calcite. The extreme acidic hydrothermal systems in the Andes, known as high-sulphidation epithermal deposits, include the giants of Yanacocha, Lagunas Norte, and Pierina of northern Peru, and the El Indio district and Pasca Llama of Chile. Ecuador has the Quimsacocha deposit, yet to be constructed, which contains around 3.3 million ounces of gold. The high-sulphidation deposit class accounts for around 121 million ounces of gold spread across 139 mines. Hallmarks of the high-sulphidation deposit type include thick blankets of vuggy silica, the minerals alunite, pyrophyllite, barite, native sulfur, and engarite. Yanacocha in Peru remains the largest single gold-only deposit in South America with over 57 million ounces of produced gold.
Less abundant and geologically odder gold deposits come from breccia pipes, such as Espirtu Santo de la Cana in Panama, or sediment replacement deposits such as El Hueso and Jeronimo in Chile. The Coastal batholith of Peru and Chile account for intrusion-related quartz-pyrite-chalcopyrite veins that carry minor gold grades, however, these are widely exploited by informal miners. Gold reserves in porphyry intrusions, called porphyry gold deposits, have some 10 million ounces at La Colosa in Colombia, but this is still a long ways from production. The classic porphyry gold deposit, now mined out, is Refugio in Chile.
The media’s involvement with gold mining in the Andes is one of making no difference, and always going back to the same theme of injustice. Prime examples would be the New York Times, Washington Post, or the New Yorker doing articles about the La Rinconada district of southern Peru. This is the go-to mining camp for cheap stories featuring incredulous sensationalism of difficult working conditions, suffering, and pollution. Anti-mining NGO’s likewise profit from donations by using the old argument of rich mining companies leaving the locals in poverty. First, if truly interested in combating poverty, the cause of government and societal corruption should be examined and focused upon, not mining. Second, the clichéd “observation” that the locals are a peon or peasant sitting on a throne of gold warrants far greater analysis. In most countries the mining of limestone and sand, the ingredients of cement, make far more money than mining metals. This is true of California. And the wealth contrast between the one percent controlling sales distribution of all products in the world’s major metropolitan areas is a far greater issue than the income of a few local inhabitants surrounding a remote mining project. The people living in harsh conditions on top of the Andes are a more obvious, or symbolic, image to present to a reader. But the millions and millions of people huddled in concrete and brick hovels that are cities, that all depend on materials extracted by mining for survival, can be convinced that mining is bad by the media. The irony is more sharp and treacherous in that the world’s media could not exist without the products of mining. Their stories come over and over about mining injustice and never help any people on the ground, but they do help sell copies and extract a little paper wealth for themselves.
In other mining-community interactions, or conflicts, the scenario runs the mine reimburses the community for impacts, or relocations, or percent of the mining royalty as required by the government, then the people go about spending the money in frivolous ways, wasting it. They look back upon the mining operation as a cornucopia, demanding additional compensation. This can quickly deteriorate into physical protests, blocking the roads that in turn halt the mine production. Community engagement in these illegal activities marks entitlement, charging that they have a right when instead what is happening is extortion. The problem that mining faces is that to develop a mine and make a profit requires defining the resource in advance to determine if the investment is worthwhile. Building a mine is expensive. Once the value is determined then it is before the public, the amount seen by all, and here begins the squabbling by many parties in attempt to secure part of the wealth. If other businesses, such as supermarkets, coffee shops, and hardware supply stores, etc., had to announce before opening the doors how much money the place would make over the next 30 years then numerous groups would try to take advantage of the perceived value. Mines are not the source problem, it is people’s greed.
Small-scale mining has other complications. Illegal hard rock mining and the placer mines in the jungles are harmful. The illegal gold miners of Colombia and Peru are washing mercury down the streams, cut open areas with no permits, and have no intention of environmental restoration, and nor do they pay taxes on what they mine. They have no controls or supervision for worker safety. Illegal production is primarily not a mining industry problem, although NGO’s mistakenly use it or knowingly miss-direct communities with propaganda showing illegal mines to oppose the opening new modern mines, but instead the illegal mining is the hallmark of weak and corrupt governments. That the media can return time and again to La Rinconada of Peru to show the desperate life of artisanal gold miners is a failure of government to enforce existing regulations. That mining of the Madre de Dios jungle continues to wreak havoc is not an industry responsibility; it is the will and management capabilities of the country’s population and their leaders. The issue of gold mining at a small-scale is complex, and more so in Colombia where drug cartels use false gold mines to launder money. The issue will always return because of the high value of gold and the relative ease of extracting and processing it, plus its desirable nature to the consumer.
Not in my backyard. This sentiment displaces mining from more developed countries to those that have little other recourse for economic enterprises. It tends to place mining out of sight and out of mind. Yet those days are ending, everywhere in the world now has people not wanting the mines near them. Ironic because other places where mines are being developed have crowds moving in to attempt to take part of any compensations! This is a real problem, where remote exploration projects that go on for years can find entire towns springing up around them from the jobs it provides, and speculation on the future revenues. People get in the way of mining, and people depend on mining for a good standard of living. The issue of land use is fundamentally one of government strategic planning, something that essentially nobody does well because politicians work on the voting-cycle time-frame, whereas mining districts may develop over decades to centuries, depending on metal prices and technology. Basically anywhere the Earth has developed those unusual conditions of being metal endowed the governments should set aside and not permit permanent habitation. Intelligent stewardship would use designated mining areas for civilization, making for efficient extraction of what geology has formed. In short, many places with mineral endowment should not be zoned such that people can claim it as their backyard. This again is a government problem or failure that exists in all countries of the world.
Modern mining regulations provide for protection of the environment and fair compensation of impacted communities. This comes at a cost. A fundamental expense mines have to pay for running an open-pit operation is the removal of covering waste rock that is called overburden. The process of taking off the overburden is stripping. One of the major factors in the economics of whether a metal deposit can be mined is the strip ratio, which is the ratio of value in the ground to the cost of removing the overburden. Social and environmental costs add greatly to the effective overburden, making it necessary to find bigger and higher grade deposits to be able to satisfy the geological, social, and environmental overburden. The reality of metal extraction is that it is comprises a finite resource, and most of the easy to find and better deposits have already been exploited. What is left has the higher costs for extraction. All of the above means that metal prices will continue to increase, and for the world to continue along its technological path it will cost more, and this must eventually balance out to cover the geo-social-enviro overburden.
Many major cities and towns were originally founded upon mining in proximity to the mineral deposits. Other cities developed along the supply routes that serviced the mines. Country infrastructure in many cases was dictated in the early history of settlement by the location of mines, particularly the development of road, railroads, and power lines. These towns and cities continued once on the mines shut, and generations of people, the offspring of miners, went about their lives. Then with new technology, or just a new idea on where to look, a particular mine can be reopened. This culminates in some cases having those whose very existence was thanks to mining argue in ignorance that they are against the mine.
If it isn’t grown it must be mined– a classic Nevadan bumper sticker saying. We all depend on mining. What brought forward humankind from the Stone Age was mining, and we call it the Bronze Age. What is ironic is the agriculture endeavor is a form of mining with the cultivated plants biologically stripping out nutrients from the top soil, an Earth material. Long term farming depletes of the ground of nutrients, which in turn depends on other mines around the world to provide substituting fertilizers. Farming is mining. Today our current Information Age and accelerating technology needs mining more than we did in the Bronze Age.
Now back to the Andes. The total gold endowment of the Andes well exceeds 442 million ounces, not counting material produced from the placer occurrences. By country, the following contained gold ounces (millions) are estimated: Colombia = 52.3 (may be as high as 80), Ecuador = 16.5, Peru = 147.9, Bolivia = 0.7 (probably too low), and Chile = 122.5. Of course, many of the small to medium-scale mines do not have reported production figures, and even some of richer larger historic mines have unknown endowment. An estimate on the illegal gold mining generally has 20% of what is formally produced. All in gold endowment, produced, illegally mined, historically mined, and yet to be discovered, may place the Andes as having around one billion ounces of gold. Compare this to the very rough estimates on total gold mined in the history of the world as being 6 billion ounces.
Even though gold is found in abundance in Pre-Columbian artifacts, and the Spaniards removed much of it from South America, the amount of gold extracted by modern mining methods far outweighs the historical scraps archived in museums. Gold is a byproduct of copper mining in Peru and Chile, forming a smelter credit that amounts to >197.7 million ounces to date. I have never seen a total number of ounces for Pre-Columbian gold, but in general hard rock gold mining in many gold-endowed regions will out produce the material found spread through the alluvium.
While above tallies of produced gold make it sound like a large wealth is available to be spread among the people, one must focus on the fact that much of this gold was mined a long time ago and is no longer something available for use. Furthermore, what remains in the ground to be mined, while of high value, will never be enough to solve the social ills of the host countries. Finally, where mining does happen, it offers far higher paying jobs than the traditional sources of income. If people in these regions chose to move their earnings away from these remote areas, as typically is the case, the net result is the mine area remains poor. This is equally true for all areas of the world, not just the highland communities of the Andes or the jungle towns. Just look at the standard of living in rural Nevada around the old mining towns. The money has left for the beaches, the big cities, for someplace better.
Gold in the Andes, while representing sizeable wealth, does not in and of itself account for the wealth of this mountain chain. Far more value is extracted in copper, and much of Peru and Bolivia’s metallic value comes from silver and tin. There are far richer goldfields in the world than those of the Andes, places like Nevada and California, South Africa, China, and many more. Gold is mined from low-sulphidation veins on the coastal plains of southern Argentina, and from the jungles of Brazil and Suriname. The impact and social issues revolving around gold is not an Andean issue, it is something many countries struggle with. And for every abuse that happens with the mining of gold, there are far greater ones committed by banks and governments with paper currencies, essentially stealing money through interest rates, inflation, devaluations, and playing with the numbers. This is why gold remains high intrinsic value, because governments cannot print it. One may argue that gold is a luxury, either for bankers to hoard, or for people to wear as jewelry, and the tech consumption of gold in computers and high-end electronics remains a low market share– but to place this into context, the amount of the United States Federal debt is greater than the value of all the gold mined in history. This is why people want gold, it has value in the face of all that ugly debt. There are two human realities that are certain in the long-term, governments will rise and fall, and gold will be mined from the Earth.
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