Monday, August 20, 2012

The World Gold Council

world gold council logo
The World Gold Council is the market development organisation for the gold industry.

Based in London it aims to promote the use of gold and stimulate the demand for gold in industry and as an investment.

The association has 23 members who represent the world’s gold mining companies and over 60% of current gold production.

The World Gold Council is a Non profit Organisation.

The association is funded by surplus revenue and NPOs are often exempt from taxation or have favourable tax advantages.

Although based in London the WGC has operations in India, the Far East, Europe and the USA

So what does the World Gold Council actually do?

They advise Governments and Central banks on all matters relating to the gold market.

They aim to make gold investment crucial to investment decision making.

They promote the use of gold in technology - the electronics industry, mobile phones for example use gold plated contacts and chips as the material of choice as is the use of gold in dentistry.

The World Gold Council also aims to make gold central to the jewellery industry and create “new ideas which increase the allure and significance of gold when given or worn.”

The World Gold Council also attempts to regulate the gold mining industry.

We all accept without question that gold is valuable. Gold has a mystique and allure that has always fascinated and although it does have value in industry, the main value is in its market value, just for being gold.

Gold is the constant benchmark of value and the base line for national economies. On a simple human level, paper currencies may come and go but you can always cash in your gold jewellery for useful commodities such as food, a place to live and everything else.

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Is gold ethical?

Gold production has had a bloody past and The World Gold Council have just launched a new Conflict Free Gold Standard.

The organisation “believes that the mining of gold should be a source of economic and social development wherever it is found”

They are quoted as saying “We are opposed to activities which, directly or indirectly, finance or benefit armed conflict and violence that contributes to human rights abuses and breaches of international humanitarian law.”

Although this is good news the environmental impact of gold mining is still of major concern.

Almost half of global gold production comes from huge open cast mining operations and new methods of extraction have led to the use of cyanide, used to leach the metal from crushed rock.

This is profitable because it means gold can be extracted from low-grade ore.

The World Gold Council support the International Cyanide Management Code, a voluntary industry programme that “promotes the responsible management of cyanide used in gold mining, enhancing the protection of human health and reducing the potential for environmental impacts.”

Although this is all very well, the fact that this is a voluntary programme probably means that the worst offenders will ignore these guidelines.

In fact the gold mining industry is one of the dirtiest mining operations you can find and it is on the rise with China now becoming one of the major gold mining areas.
It is estimated that one gold ring can generate around 35 tons of contaminated waste rock.

The World Gold Council promote the use of gold and although it is easy to be cynical about the organisation, gold mining is going to continue and as the economic situation worsens so the quest for new gold mines becomes more urgent.

Whether or not the World Gold Council is actually trying to improve the industry they have a major role in, or is merely a glossy PR exercise designed to increase the use of gold regardless of human and environmental cost, remains to be seen.

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The World Gold Council