The principle behind panning for gold is that gold is heavier than almost every other substance. By sloshing it around a in slurry of stone, sand and water the heavier gold will settle to the bottom of the pan while the other materials wash away.

All gold found by miners and prospectors originally came from hard rock. The problem with hard rock is that it has to be broken down and often it is located deep in the earth. That is why gold eroded into river beds’so called alluvial, or placer gold---is the easiest to extract. The gold is already broken down and it is easy to get at. The same principal that separates gold from other materials in a pan is what allows gold to concentrate in these alluvial deposits. Geologist also look for gold in ancient river beds. Veins of gold are often found by tracing the alluvial deposits to their source.╠

Sophisticated operations that use between $1,500 and $5000 worth of equipment use suction dredges that vacuum up gravel, sluices to separate the gravel from the black sand big plastic pans used to actually pan the gold.

"Three in 1,000" is a expression used by gold prospectors to describe the usual average of three successful strikes in 1,000 test bores.

Mercury is sometimes used in gold mining. Gold sticks to mercury, and to retrieve the coveted metal the mercury is vaporized, leaving behind the gold. Gold in the Amazon regions of Brazil, Columbia and Venezuela is sometimes mined with huge dredges that scoop up mud and gravel from the bottom of a river. Each ton of muck contains, if the miners are lucky, three-hundredths of an ounce of gold. To extract the gold mercury is added.╠

There are large deposits of gold and other metals on the ocean floor but are expensive to mine. Some of the richest deposits are me than one kilometer under the sea in massive mineral deposits. Already a project is underway off Papua New Guinea to extract such gold using a 160-ton remote controlled machine developed by oil companies to dig trenches for pipelines. Perhaps the biggest problem is that richest deposits are found around underwater vents that are also rich in unique life forms such as two-meter-long tube worms and blind shrimp.

“Gold production in 2010: 2,689 tonnes

About 1.1 million kilograms of ore, rock, soil and sand needs to be excavated to produce one kilogram of gold. [Source: Japanese Environmental Ministry]

Hydraulic Gold Mining in the 1870s

Edwin Kiester, Jr wrote in Smithsonian magazine, “When the cry of "Gold!" went up in California in 1848, the pioneering prospectors had little to do but pluck flakes and nuggets of gold out of streams. Those easy pickings didn't last long. Miners then moved on to panning, in which gravel and water are gently rocked in a handheld pan until the water gradually carries away the gravel and leaves the heavier gold behind. Placer mining, panning on a grand scale, uses sluices and flumes to separate gravel and gold. Hard-rock mining tunnels into the earth to extract gold ore from buried veins. [Source: Edwin Kiester, Jr, Smithsonian magazine, August 1999] Eventually, miners hit upon the cheapest way of "getting gold out of the secret places." Hydraulic mining applied a simple method familiar to all who've used a garden hose. Direct a forceful stream of water at the earth, and it will carve a ditch and carry away the loosened soil. Harnessing water under powerful pressure thus could blast away the hillsides concealing gold ore. Then the water and earth could be fed through sluices and riffles to catch the gold. In the late 1860s, Julious Poquillon bought up cheap land along the Yuba River...and the North Bloomfield Gravel Mining Company was launched. [Ibid]

“Hydraulic mining was born and raised here in California," California park ranger Ken Huie told Smithsonian magazin. "And no matter what you think of the result, it was a tremendous engineering feat." The key to success was lots and lots of water, year-round, in dry seasons as well as wet. Engineers built a network of reservoirs, lakes, ditches and flumes extending as far as 40 miles to catch every precious drop of rain or Sierra snowmelt. Propelled by gravity along a vertical drop of up to 500 feet, the captured waters converged into a single, powerful stream. Then they were fed into water cannons trained on the gold-bearing hillside. [Ibid]

“A single monitor [water cannon] with an eight-inch nozzle like this could direct 16,000 gallons of water a minute," he says. "It could tear away 4,000 cubic yards of earth from the hillside every day." Into the sluices went the result, out came the gold, and the rest was dumped into the Yuba and sent downstream. And what a load the river carried! Tons and tons of earth, rocks, trees, shrubbery, silt and a mucky mixture of mud, sand and gravel known as "slickens." The once-crystal Yuba turned chocolate brown. So did the Feather River, into which the Yuba emptied, and the Sacramento. The brown waters extended all the way to San Francisco Bay. [Ibid]

“It's an irony, isn't it?" said after showing a mile-and-a-half-long tunnel that drained the mine. "It cost the company about three and a half million dollars to construct all this. And all they got back, according to the best estimates, is three and a half million. For all the effort and the damage, they just about broke even.” [Ibid]

Gold Mining in Australia

In 1887, John Stewert McArthur patented the McArthur-Forest process for using cyanide to extract gold from ore, making it easier to extract gold from lower quality such as what is found in relative abundance in South Africa. [Ibid]

“Describing the gold mining process in Victoria Australia, NicK Fields wrote in Times of London: Machines pound the the gold-flecked earth into a toothpaste-like consistency before using bacteria to liberate the precious metal. It is a laborious process for the mine’s 350 workers, who toll around the clock in the uncomfortably high temperature so deep underground.” The miners make up to $100,000 a year.

It is extraordinarily hot and the stench of ammonia is unbelievable. Yet here, 600 meters below the ground, 350 workers are at work recovering gold from the Victorian bushlands....A fleet of “jumbo” machines dig trenches at 20 meter intervals off the central pathway. They are used to slice the earth into 15-meter-high stopes, a Cornish word for the large chambers created by the miners before the earth is taken from the surface.” [Ibid]

“Each 40 tone dirt-filled lorry leaving the mine yields only two teaspooons of gold, when processed, The rubble is pounded and bars of buillion are produced on site before being shipped to Perth once a week. [Ibid]

Freeport McMoRan Gold Mine

The world's largest known gold deposit and world' third largest copper reserves are located on 13,000 foot-high mountain, the Grasberg Mountain in south central Irian Jaya not far from 16,024-foot Puncak Jaya, highest mountain in Indonesia and Southeast Asia and the only one between the Andes and the Himalayas that has a glaciers. There are also large deposits of silver. [Source: Mark Frankel, Newsweek, December 18, 1995]

The mountain is being mined by the New Orleans-based Freeport McMoRan Copper and Gold Company through its Indonesian subsidiary PT Freeport Indonesia. The company has spent $3 billion to develop the mine and extract its minerals and is the largest single American investor in Indonesia, with a market capitalization of $5 billion, and the country's most profitable business, making more than $1 million a day.

Freeport has access to nine million acres of land, an area one and half times the size of Vermont. About 1.24 million acres is taken up by the mine. The operation is also one of the worlds largest copper mines. The 60,000 people employed at the mine live on a compound carved out of the jungle with American-style shopping centers.

The mine straddles a mineral-rich ridge of mountains pushed up by a collision between the Pacific and Australian tectonic plates. Everyday about $7.2 million worth of gold, copper and silver is extracted from the Grasber mine. The refined metal harvested every year is worth about $2 billion. The total deposit, one of the world's richest, is worth at least $50 billion.

Mining at Freeport McMoRan Gold Mine

The Freeport McMoRan Gold Mine is the world’s largest gold and copper mine. It is is an open-pit mine on the top of a mountain. It will be more than two miles across at the end of its working life, sometime around 2015. To get to it you need to pass through two tunnels and then climb an incredibly steep road that is so dangerous drivers need a special permit to traverse it.

The ore is dug us with huge shovels and loaded onto trucks that coast $2 million a piece and moved to a processing plant that crushes and chemically concentrates the ore into a slurry that is piped 75 miles to the coast, where it is shipped to smelters. The work continues 24 hours a day, seven days a week. More than 200 tons of ore is pried loose form the rock every day.

Describing the mining process, Thomas O'Neil wrote in National Geographic, "Shivering in the cold wind...I watched trucks with tires ten feet high haul out ore that would be processed into a gray concentrate of copper, gold and silver. The mix, piped in a slurry from down the mountain to the private seaport of Amamapare, is dried and shipped to smelters round the world. Everything is jumbo size: the workforce of 17,000; the gold, an estimated 40 million ounces, the single biggest gold reserve in the world; the copper deposits 28 billion pounds."

Underground Gold Mine in South Africa

The shafts in South Africa’s deepest gold mines are over 12,000 feet deep. Without any kind of air conditioning, the temperature is 95̊ at 5,000 feet, a 114̊ at 9,000 feet, and 135̊ at 12,000 feet. With air conditioning the temperature hovers is about 90̊, but humidity is a barely unbearable 90 percent. People unaccustomed to it conditions grow faint and weary just standing up. Mine recruits in training for these conditions step up and down on two foot block in a heated room 12 times a minutes for four hours.

The deepest mine in the world in the 1970s was the Western Deep Gold Mine in South Africa. At 12,720 feet deep, it was nine times deeper than the height of the tallest building. The natural temperature was 131̊F (55̊C). To keep the workers from burning up special refrigerators were installed. The mine was so deep and pressure was so great that rock sometimes exploded. [Source: Peter White, National Geographic January 1974, ╠]

To reach to chambers where the ore was extracted miners were raised and lowered on elevators that held 120 men. These same elevators were used to transport 20 ton loads of rock, which was transported to the shafts with buckets and carts.╠

The mine chambers, or stopes, were slanted at 21 degrees to follow the reefs. There was barely enough room for a miner to sit up let alone move around. Hydraulic jacks and crisscrossed stacks of logs were used to keep the roof from collapsing. To break off the rock, miners used jack hammer-like drills, which they guided with their feet. There were sometimes 30 or more drills going at one time and the noise level ws akin to being locked in a bathroom with an accelerating supersonic jet. If that wasn’t enough sometimes boiling hot streams of water burst out of the rocks and the rock itself exploded because of the pressure.╠

The huge mounds that look like mesas that surround Johannesburg are actually slag heaps from the gold mines. Outside the slag heaps are the townships where miners live.

Processing Gold

About 2½ tons of rock must be processed to yield an ounce of gold. The average cost of producing gold was $280 to $295 an ounce in 2006, up from 19 percent from the previous year.

The amalgamation method of refining gold and silver involves exposing crushed ore to mercury, which is attracted to and attaches itself to gold and silver particles. The resulting mercury-gold and mercury-silver amalgamations are separated from the rest of the ore and then heated until the mercury boils away, leaving pure gold or silver. The mercury from this method can very nasty on the environment.

Cupellation is a primitive method of refining gold and silver ore. The ore is heated on a ceramic plate. Some impurities are absorbed; some are burned away, leaving behind the desired precious metal.

When gold ore is brought in to be processed the ore is first broken into softball-size fragments with a steel crusher. Hand sorters discard pieces without gold. The remaining gold-bearing pieces are pulverized into a powder in a rotating cylinder filled with steel balls.

Cyanide can be used instead of mercury to separate the gold from the rock. It added to the slurry of gold ore to release microscopic bits of gold from the rock. After the rock is filtered out of the gold-cyanide solution, zinc is added to bond with and separate the cyanide. The gold is now an impure powder. The gold is then mixed with borax and poured into a cone. The pure gold collects at the bottom of the cone and the impurities float as slag to the top.

In South Africa much of the gold is molded into 27½ pound bars stamped with the South African springbok emblem. Many of these bars are stored in the South African Reserve Bank in Pretoria. In 1974 a vault in this bank held 348 metric tons of gold. During one four month period that year when the value of gold shot up 100 percent and the value of the gold in the vault increased from $770 million to $1.4 billion.╠

Gold Mining Companies as an Investment

The Economist reported: “Investing in gold miners carries risks unrelated to the price of the metal. Mergers can flop. As readily recoverable reserves dwindle in stable places such as North America and Australia, miners are forced to operate in more troublesome ones, such as Latin America and Africa. Huge investments can yield disappointing returns if promising mines turn out to contain less glitter than predicted. [Source: The Economist, June 2 2011]

“Gold bugs, by definition, bet that the price of gold will go up and up. Miners sometimes do the opposite. Many hedged their wares, selling gold forward to ensure smooth cash flows and to raise money to dig more mines. This may have seemed prudent at the time. But it repelled gold bugs and, as the gold price rose ever higher, it hurt the miners’ profits, too. Barrick Gold, the world’s biggest gold miner, and AngloGold Ashanti, the third-largest, have both spent billions unwinding hedges over the past couple of years. [Ibid]

“Gold bugs are often allergic to other metals. Gold miners are not. Many produce copper, too, since it often sits in the same ore bodies as gold. In April Barrick offered $7.7 billion to trump a Chinese bid for Equinox, an Australian copper miner. The heavy demand in China and short global supply for “red gold” makes Barrick’s move look sensible. But gold bugs hated it. Barrick’s shares fell sharply after the bid was revealed. [Ibid]

“Most damaging of all for the marriage between gold bugs and gold miners has been the arrival of a seductive new financial tool. Exchange-traded funds (ETFs), backed by physical gold, offer investors direct exposure to the gold price without any exposure to gold miners themselves. They have become popular: in less than a decade gold ETFs have gone from nothing to holding some 2,200 tonnes of gold---nearly a whole year’s production. If the world goes to hell, gold bugs will say: “I told you so.” But if investors ever wake up and notice that the yellow metal is little more useful than tulips, the gold bugs will be burned. The miners, less so. [Ibid]

Gold Mining Problems

According to the Economist: “Gold and gold-mining shares used to rise and fall in lockstep. Over the past five years, however, the price of gold has trebled while the value of gold miners has merely doubled. Investors in firms that shift, crush and process rocks are more grounded, it seems, than those who invest in bullion. [Source: The Economist, June 2 2011]

“As mines age, extracting gold gets harder and costlier. Ores give up less of the metal---average grades have fallen by 30 percent since 1999 according to GFMS, a consultancy. And ore must be hauled up from ever greater depths. Fuel is pricier. So, too, are labour and equipment, since the global minerals boom has driven up demand for miners and drills. A decade ago the average cost of extracting an ounce of gold from the ground stood at a little over $200. In 2010 it hit $857, says GFMS---though this figure depends in part on the gold price. When gold was $200 an ounce, nuggets that cost $800 to extract stayed buried. [Ibid]

“Finding new seams to replace depleted ones is becoming harder. Metals Economics Group, a mining consultancy, estimates that in 2002 gold miners spent $500m on exploration. By 2008 they were spending $3 billion but finding much less. All the easy gold has been mined already. [Ibid]

“The big gold-mining firms have turned to acquisitions to boost their reserves. Last year Australia’s Newcrest bought an Aussie rival, Lihir Gold, for $8.7 billion. By value, 31 percent of the mining deals last year involved gold, according to the consulting arm of PwC. Merged firms seek to cut costs, and often end up spending less on exploration than they did separately. That makes it even less likely that they will find much more gold.The world’s miners dug up 2,689 tonnes of gold last year. Granted, that was a record. But, despite the huge surge in investment, it was only a few flakes more than the total output a decade ago. [Ibid]

Rain Forest Gold Mining, the Poor and Child Labor in Ghana

Thomas Neal wrote in The Times: “Beneath a dilapidated shack Frank Ofori leaps casually into the entrance of a crumbling mineshaft that plunges 200ft into the earth. With a torch strapped to his head and three sticks of dynamite in his back pocket he begins a ten-hour shift underground in the Kenyase mine camp, 200 miles (320km) north of Accra, where thousands of prospectors risk their lives in the hope of finding gold. [Source: Thomas Neal, The Times, April 23, 2011]

Mr Ofori skips over the wooden struts holding the makeshift tunnel together and disappears into an abyss. Miners as young as 10 work in the squalid camp, exploited by gangmaster gold dealers who force them to endure back-breaking labour for less than a few pounds a month. Every day they risk suffocation, broken bones and injury from uncontrolled explosions. The camp is reached through a flooded dirt-track carved into the rainforest, a busy thoroughfare crammed with people carrying generators and mining tools in wheelbarrows. [Ibid]

“The sprawling shantytown in a clearing appears to be pockmarked by shelling. Workers tread carefully between the craters, that flood in the rainy season. Only decayed logs and sandbags give away where the mine entrances stand. At Kenyase there are no health-and-safety controls. No one wears a hard hat and at least 40 people died here last year. [Ibid]

“The camp has sprung up in the past few years. When American company Newmont---one of the world’s largest gold companies---moved in to the area, thousands of prospectors followed. Mr Ofori spent two years digging his mineshaft with only shovels and pickaxes. “We usually go down there for ten hours at a time,” he said. “We take food and water with us. There is a network of tunnels underground, going on for miles. There are hundreds of us down there.”Across the site anyone who isn’t digging is sifting through gold ore. A mother with a baby strapped to her back looks through discarded rocks for a thin, yellow streak. [Ibid]

Teenage boys have abandoned their schooling to shovel earth into metal basins that girls carry to a clattering machine where the sludge is filtered. Ayishitu Mohammed, 13, spends every day carrying heavy loads on her head through the opencast pit. “I would like to be a nurse but I haven’t finished at school,” she said. “That will never happen now.” [Ibid]

In April 2011, “Newmont approved a new gold project in Ghana. The Akyem mine is expected to produce 7.2 million ounces, with an annual output of up to 500,000 ounces. Such an immense undertaking will make Ghana Africa’s second biggest producer, after South Africa. Although gold accounts for 90 per cent of exports multinationals pay only 3 per cent royalties. [Ibid]

“The charity Action Aid said that Ghana lost £700 million between 1990 and 2007 by not making companies to pay the maximum 12 per cent tax they could have required. In 2005 this would have been equivalent to paying off half the country’s debt. Kwame Badassi, a dealer, holds up a lump of rock containing a slither of gold. It has taken a miner two months to find and is worth only £4. “It is the big companies who have the biggest gold deposits. We just get the scraps,” he said. [Ibid]

Gold and the Environment

Gold mining is very dirty and environmentally-damaging, It has been estimated that creating enough gold for an 18-karat gold ring generates 20 tons of waste. Strip mining can be particularly damaging, tearing up landscapes and fouling rivers and groundwater.

Mining gold always entails some environmental damage. Gold is always found with heavy metals like mercury, cadmium, lead, copper and zinc, and flushing these metals is destructive. Traditional methods for extract gold include smelting and roasting. They produce poisonous gas emissions and toxic chemicals.

When gold mines are played out gold companies leave behind hectares of scarred earth and deposits of arsenic trioxide in underground chambers. Mountains of rock waste left behind is full of mercury and other toxic materials. The tailings are treated with sodium cyanide and the treated again with other chemicals to reduce the concentrations of cyanide.

Gold and Water

Large scale gold processing requires lots of water---in some cases million of liters a day. The water is needed to dilute the cyanide that soaks the ore. When mines and processing facilities are located in dry areas obtaining enough water is one of the biggest problems that has to be overcome. Then world's longest water pipeline transports water 350 miles from Perth to the Kalgoorlie gold fields.∑

Gold mining sometimes soaks up huge amounts of scarce water in deserts or other dry areas. In some places the water is drawn from aquifers and other underground supplies that could take hundreds, even thousands, of years to replenish.

Companies say they use about 10 percent of the water they pump out. About half of the rest goes into settling ponds, where it is expected to sink back into the aquifers. Some remains in artificial lakes. These sometimes have high levels of arsenic and selenium or other metal. Other times the they contain concentrations of materials that are toxic to fish but not humans or contain water that is relatively clean.

Environmentally-Friendly Gold Mining and Processing

Bioleeching is a method in which mineral-eating bacteria are applied to sulfide solution with gold-bearing sulfide ore. The bacteria oxidizes the sulfide leaving behind a solution from which metal can easily be precipitated out the technique has boosted recovery rates and is environmentally-friendly. In Brazil, Australia and South Africa, gold mines use microbes to treat the raw ore before final processing with cyanide.

“No Dirty Gold” is a campaign, whose participates include Tiffany’s and Zales, that promises that gold being sold has been taken without damaging the environment or violating human rights. and offer synthetic or “clean” Canadian diamonds and recycled gold.

Image Sources: Wikimedia Commons

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, The Guardian, National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, NBC News, Fox News and various books and other publications.

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© 2008 Jeffrey Hays

Last updated August 2012

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