“While I have interest in precious metals investments, I also have significant concerns about the environmental degradation associated with mining, as well as unfair trade practices (poor conditions and treatment of workers). How, if possible, can I acquire precious metals while tending to these ethical concerns?” —Rob
I share your concerns about the adverse effect of mining on the environment and the treatment of mine workers. But I am afraid there is no easy answer to your question.
I have followed the mining sector closely for the last 11 years. While there are still abuses and incidents in some areas of the world, I can tell you that all the major mining companies have adopted much higher standards in the past 20–30 years.
For the most part, mining operations today are safe for the environment and their workers. Even in third-world countries, workers employed by large multinational mining companies work in relatively safe conditions and receive decent wages.
There are several reasons for these changes:
However, I’m not saying that all mining is 100% environmentally friendly. Nor am I saying that all mining workers are working in safe conditions.
Many small domestic companies conduct illegal mining operations that do not comply with workplace safety and environmental regulations. Some mining sites are real disasters both environmentally and socially—with barefoot children working in chemicals and runoffs full of arsenic.
The good news is that the bulk of the metals we sell come from socially responsible mining companies. And the percentage from these types of companies continue to trend upward.
Unfortunately, there is no chain of custody in place that could guarantee that a gold coin or bar has been produced from an environmentally and socially responsible mine.
One of the challenges is that most precious metals are recycled. Refiners get ore and recycled metals from so many sources, that it’s impossible to trace the origin of each bullion piece.
Also, note that the annual production of gold is only a fraction of the world’s reserves of gold available for investment. Some of the gold you purchase in a coin may have been mined 50, 100, or even 1,000 years ago—nobody really knows.
Hope that answers your question.
Olivier Garret, CEO
Hard Assets Alliance
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