Pollution: Losing Some Luster

At first Mario Mautz didn't think much about the Pascua Lama gold mine, 60 kilometers from his fields in Huasco, an agricultural valley in northern Chile. But then Mautz, who grows avocados and fruits, learned that the mine would displace tons of glacier ice, which waters the valley, and contaminate rivers with cyanide and other toxins. In November he and hundreds of other residents dumped chunks of ice, a symbol of glaciers at risk, at the presidential palace in Santiago. "Unless they can guarantee that their cyanide and toxic-metal pollution will not harm us, our water and the glaciers, the project should be canceled," says Mautz.

Angry locals aren't the only obstacles gold-mining firms face these days. As the price of gold skyrockets--it has more than doubled since 1999 and hovers at about $595 an ounce, a 25-year high--companies have redoubled their efforts to open new mines. But environmental groups are now targeting the industry in the hopes of stalling further expansion.

Each ounce of pure gold requires removing 20 tons of rock on average, leading to rubble heaps the size of 30-story building. The most serious environmental problems come from "cyanide heap leaching," the process almost all large-scale mines use to dissolve microscopic bits of gold out of low-grade ore. The leftover cyanide-laden rock is difficult to dispose of, and is sometimes dumped into rivers or the ocean.

Two U.S.-based citizen groups, Oxfam America and Earthworks, are waging a "No Dirty Gold" campaign; they've persuaded eight leading jewelers--including Zales, Cartier, Helzberg and Tiffany & Co., representing $6.3 billion in U.S. sales--to buy their gold only from mines that have adopted "sustainable" practices. The battle over Pascua Lama is but one of many local conflicts. In February, U.S.-based Newmont Mining paid $30 million to the Indonesian government in an out-of-court settlement after allegedly dumping waste containing high levels of mercury and arsenic in North Sulawesi province. In two South American towns, Esquel in Argentina and Tambogrande in Peru, referendums to turn down proposed gold mines recently passed overwhelmingly.

Mining firms know they have a problem. "Governments need to regulate more," admits International Council on Mining and Minerals secretary-general Paul Mitchell. For now, getting the gold out of the ground is the easy part.