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The invisible gold rush

Canadian imperialism and the gold mining boom

As I write this the price of gold is $1,776.80 an ounce, the highest it’s ever been, up from $1,023.50 in 2008 and $282.40 in 1999. Global economic instability has fueled this dramatic spike, and along with it a massive increase in gold production, an expansion that some have termed “an invisible gold rush.”

In Canada we – or at least some of us – directly benefit from this expansion. 75 per cent of the world’s mining companies (in both production and exploration) are Canadian registered, and several of the industry’s biggest players such as Barrick, Goldcorp, and Kinross are Canadian. And, with a government increasingly working to reflect the needs and interests of the extractive industry, these companies have emerged as key dictators of our country’s economic and foreign policy.

As a country, we are increasingly tied to gold. It is with this in mind that I chose to look at the long and often brutal history of gold mining, the way in which we have viewed gold over time, and to help piece together our strange relationship with this mineral.

Why gold? What has led us to value it above all other substances? Looking at a sample in the display cases in the Redpath Museum, it is hard to deny its beauty. However, gold’s real power has always been symbolic, for gold is wealth itself. Before there was money, there was gold. Anthropologist Michael Taussig calls gold the ur-capital, the very essence of wealth that gives money its value. And, just as capital has its own magic (reproducing with an apparent life of its own), so too does gold have a certain power. It was dreams of gold that drove the Spanish to conquer Mexico and Peru and help lead the way for the largest theft in history: the plunder of a continent that provided for the primitive accumulation that allowed European capitalism to grow.

As the industry will tell you, no matter what happens, gold will always be there for you, a safe investment. What better advice from an economic system gone mad; people are losing jobs, losing their homes, the whole world is gripped with economic crisis: better buy more gold! Investment in gold stocks and gold mining is often the investment of choice for people and institutions seeking solid and stable returns, our own university included. Of all the gold consumed, about 40 per cent is as securities in bullion, 50 per cent as jewellery, and a mere 10 per cent goes toward tangible industrial functions. Marx talks about capitalism’s predilection to make fetishes out of commodities, to ascribe meaning and power to that which the market has created. Gold is the ultimate fetish.

What then are the human costs of this fetish? What has this latest round of our endless gold rush meant? Taussig speaks of gold as a fundamentally transgressive substance.  In the Chocó region of Colombia, where he worked, gold is seen as the devil’s substance, and it is the devil you must deal with if a mining operation is to be successful.

Today, multi-nationals such as Barrick Gold and Newmont are the primary producers, who through advances in amalgamation and truck tire design (of all things) are able to mine ores previously not considered commercially viable, and on a massive scale. Open pit mining and cyanide leaching are the primary methods. Pits over 250 square kilometres large are carved into the earth. Ore is excavated, crushed, and mixed with cyanide to extract the gold. In their wake is left tens of millions of tonnes of waste rock; 95 per cent to 99.9995 per cent of mined and processed ore ends up as waste product.

What then are the effects of this kind of mining on local environments and communities? Over the past two and a half years I have studied the effects of Canadian mining on (mostly indigenous) communities in Latin America as part of the McGill Research Collective for the Investigation of Canadian Mining in Latin America (MICLA) – a research collective that looks at the social costs of Canadian mining, observing what happens when the exploitative logic of the mining industry collides with a radically different set of values.

In recent years there has been mobilization across Latin America in opposition to large-scale mining projects, and in defense of local ecosystems and sovereignty. In these conflicts it has been gold, the quintessential symbol of decadence and prolifigacy, set against the vital necessity of a healthy community, that seems to have captured the protesters’ imagination. It is also been in the field of gold mining that Canadian companies have been most active.

El agua vale más que el oro,” was the slogan of protesters in the Cajamarca region of northern Peru. Water is worth more than gold. The two have much in common; both are a kind of lifeblood; one of the planet, the other of capitalism. What is more, gold is dependent on water; the average gold mine uses up to 100 million gallons of water a day – about 477 kilolitres for every kilogram of gold mined – used primarily in processing ore. There is also the risk of contamination in the form of acid mine drainage. Residents near the Barrick-Goldcorp Pueblo Viejo mine in the Dominican Republic have reported toxic runoff polluting the local water supply, which they now allege is highly acidic with traces of lead, mercury, and other heavy metals.

Who benefits then? With the gold mining industry helping to fuel the Toronto Stock Exchange, it has risen to a level of importance where it is even coming to shape Canadian foreign policy. In 2009, the Minister of International Development announced a shift in Canada’s foreign aid budget. The Canadian International Development Agency (CIDA) has decided to focus on new initiatives such as “Enhancing the Development Impact of Extractives Industry” in countries where Canadian mining companies operate, and to fund projects in those communities where opposition has been strongest, such as with CIDA’s project in Quiruvilca, Peru, the site of Barrick’s Lagunas Norte mine, which has been accused of contaminating the water supply and expropriating communal lands. Even the Canadian embassy has gotten involved; a 2011 US embassy cable released by WikiLeaks revealed that US and Canadian diplomatic officials had met with mining company and Peruvian government officials to discuss the rotation of teachers and priests opposed to  mining in their communities, as well as the expulsion of anti-mining NGO’s.

Closer to home, our own university invests heavily in Canadian gold mining companies. An Access to Information (ATI) request regarding the breakdown of the investment portfolio of McGill’s $920.8-million endowment fund secured last year revealed that McGill has stocks in Barrick Gold, Goldcorp, Kinross, El Dorado, and other large and junior mining companies, and has partnerships with AngloGold Ashanti, Agnico-Eagle, Barrick, and Newmont Mining through the Department of Mining and Materials Engineering. And before we take the moral high ground, our own student union invests $28,000 in gold reserves and $23,000 in Donner Metals, a junior mining company, as part of our $2.3 million investment fund.

What, then, is to be done? We have to work to oppose destructive mining projects, both here in Canada and abroad, through direct action, legislation, the courts – any means necessary to stand in solidarity with those communities whose sovereignty and livelihood is being threatened. We cannot be complicit, both as a school and as a country. It is time to break the illusory power gold has over our society.

Sean Phipps is a U2 Latin American Studies and Environment student. He can be reached at