The Ugly Side of Gold, Silver and Copper Mining. Is Ethical Investing Possible?

18 July 2026

Gold, silver and copper mining has a documented history that rarely reaches investor marketing: child labour and mercury use in artisanal mining, communities displaced without consent, security forces linked to serious violence, and tens of billions in gold smuggled from producing nations each year. Readers must understand that there's no fully clean way to get exposure to this sector. But there is a difference between ignoring that reality and researching around it. This post lays out what's documented, then gives you a practical checklist for evaluating any GSC company before you invest.

Gold, silver, and copper investing is often discussed in terms of ounces, grades, and multi-year cycles. Rarely discussed: the industry that produces those ounces has a documented history of child labour, forced displacement, community shootings, and tens of billions of dollars smuggled out of some of the world's poorest countries every year.

This is recorded in UN reports, court rulings, parliamentary inquiries, and company disclosures. But it rarely makes it into investor-facing content because it's extremely uncomfortable and doesn't fit neatly into a bull case. The goal of this post is to open your eyes to the reality of the GSC mining industry, looking at what's documented. I will then proceed to offer a practical way to factor ethics into how you research a company.

The artisanal gold economy: runs on mercury and children

Artisanal and small-scale mining, ASM, employs an estimated 40 to 45 million people directly across more than 80 countries, with roughly 150 million more depending on it indirectly, according to World Bank figures. About half of all ASM workers mine gold. It's a small share of global gold supply, around 20%, but accounts for roughly 90% of the entire global gold-mining workforce. Most artisanal gold is extracted using mercury, mixed with crushed ore to bind gold particles, then burned off to leave the metal behind. A 2014 review in Environmental Health Perspectives estimated 15 million people work in mercury-based artisanal gold mining, including around 3 million women and children, and that the practice accounts for roughly 37% of all mercury released into the atmosphere globally. It's the reason the 2013 Minamata Convention exists.

Child labour in artisanal gold mining is well documented. Human Rights Watch's 2011 report "A Poisonous Mix" found children in Mali handling mercury with bare hands. The US Department of Labor counts over 45,000 children working in Malian artisanal gold mining. In Burkina Faso, ILO-cited estimates put children at 30 to 50% of the artisanal gold workforce. Similar patterns are documented in Ghana, Niger, the Philippines, Peru, and the Democratic Republic of Congo.

A meaningful share of this gold makes it into the mainstream market. SwissAid's 2024 investigation "On the Trail of African Gold" estimated 321 to 474 tonnes of undeclared artisanal gold, worth $24 to 35 billion, is smuggled out of Africa annually, with 80 to 85% flowing to the United Arab Emirates. Over the decade to 2022, roughly $115 billion in gold entered the UAE from Africa with no matching export paperwork on the African side. Once refined, that gold's origin effectively disappears.

Some of this gold finances armed conflict directly. UN investigators have tracked Congolese gold smuggled across borders where neighbouring countries export more gold than they produce domestically. Reporting from CNN and others has documented the Wagner network smuggling an estimated 32.7 tonnes of Sudanese gold, worth close to $1.9 billion, out of the country in a single year during the civil war, with the US Treasury sanctioning Wagner-linked gold entities in response.

Community shootings and displacement

The principle of Free, Prior and Informed Consent, FPIC, holds that indigenous communities should be consulted and agree before a project on their land proceeds. It's enshrined in ILO Convention 169 and the UN Declaration on the Rights of Indigenous Peoples. In reality, it's frequently bypassed.

Guatemala's Escobal silver mine, one of the largest in the world and operated by Pan American Silver, has been suspended since 2017 after the country's Constitutional Court found the Xinka people's consultation rights had been violated. The court-ordered consultation process remains unresolved years later.

In Arizona, Resolution Copper's Oak Flat project, majority owned by Rio Tinto, sits on Chi'chil Biłdagoteel, a site sacred to the Western Apache. The mining method proposed would eventually create a crater roughly 1.8 miles wide. The Supreme Court twice declined to hear a challenge from Apache Stronghold, most recently in 2025, with Justice Gorsuch (an Associate Justice nominated by Donald Trump in 2017) calling the decision "a grievous mistake."

Bougainville's Panguna copper-gold mine, run by a Rio Tinto subsidiary from 1972 to 1989, released close to a billion tonnes of waste into local rivers while landowners reportedly received under 1% of royalties. The resulting uprising escalated into a civil war estimated to have killed 15,000 to 20,000 people. A 2024 independent assessment confirmed ongoing life-threatening risks from the abandoned site, and Rio Tinto has since entered a memorandum of understanding to address them.

At Freeport-McMoRan's Grasberg mine in West Papua, one of the largest gold and copper deposits on earth, land rights negotiations with local Amungme and Kamoro communities only began after the mine was already operating. Freeport disposes of over 200,000 tonnes of tailings a day directly into the Ajkwa river system, a practice a 2016 study in Nature found had buried an area of forest more than 40 times the size of the mine itself. Papua remains Indonesia's poorest province.

Security force conduct at mine sites has produced some of the sector's most serious allegations. At Barrick's North Mara mine in Tanzania, organisations including RAID and MiningWatch documented dozens of killings and injuries by police responsible for mine security between 2014 and 2016, with a parliamentary inquiry citing even higher figures. Barrick subsidiaries settled UK legal claims in 2015 and again more recently, without admitting liability. At Barrick's Porgera mine in Papua New Guinea, the company itself acknowledged in 2011 that mine security guards had committed sexual violence, including gang rape, against local women. A subsequent remedial programme was criticised by EarthRights International and others for initially requiring claimants to waive their legal right to sue in exchange for compensation.

The Resource Curse

The "resource curse" describes the pattern where mineral-rich nations often see less development, not more, alongside their extractive wealth. The Democratic Republic of Congo, sitting on some of the world's largest copper, cobalt, and gold reserves, remains one of the poorest countries on earth. It's the textbook case, though economists are clear the pattern isn't inevitable and depends heavily on institutional strength. Transfer pricing is one documented mechanism by which value leaves producing countries. In 2020, Zambia's Supreme Court ruled that Glencore's Mopani Copper Mines had under-priced copper sold to a related Glencore entity, ordering additional tax payments. Oxfam had earlier estimated Zambia was losing up to $102 million a year in unpaid tax through the arrangement. Tanzania's dispute with Barrick's former subsidiary Acacia Mining followed a similar arc, ending in 2020 with Barrick paying $300 million in back taxes and handing the state a 16% stake in three gold mines.

None of this means every mining company is engaged in wrongdoing. It means the incentive structure, extracting a finite, high-value resource from a jurisdiction with weaker institutions and less capacity for oversight, creates conditions where these outcomes recur.

Tailings dams: a persistent problem

Tailings, the leftover slurry of crushed rock, water, and processing chemicals, has to go somewhere after the valuable metal is extracted. When it's stored badly, the consequences are severe and long term. In August 2014, the tailings dam at Imperial Metals' Mount Polley copper-gold mine in British Columbia failed, releasing an estimated 25 million cubic metres of contaminated water and tailings into nearby lakes and waterways. No charges were laid under provincial mining law at the time. In January 2000, a cyanide-processing dam at the Aurul gold operation in Baia Mare, Romania, failed and released roughly 100,000 cubic metres of cyanide-contaminated water into the Tisza and Danube rivers, killing an estimated 1,240 tonnes of fish and affecting drinking water for 2.5 million people. It's often described as Europe's worst environmental disaster since Chernobyl.

These incidents, alongside the catastrophic 2019 Brumadinho iron ore dam collapse in Brazil that killed 270 people, led directly to the creation of the Global Industry Standard on Tailings Management in 2020. It's a meaningful step, but it currently polices only members of the International Council on Mining and Metals, a body representing roughly a third of the global industry. Most of the world's tailings facilities answer to no jurisdiction.

Is ethical investing possible?

In reality, there is no completely clean way to approach GSC investing. Refined gold is fungible once it leaves a refiner, meaning origin is essentially untraceable at that point. Index funds and ETFs hold the same major companies named throughout this piece. Royalty and streaming companies are a step removed from operations but still derive revenue from them.

People and organisations are trying to fix the industry; several standards exist to improve industry standards. The LBMA's Responsible Gold Guidance requires accredited refiners to undergo annual third-party audits, and functions as the main enforcement chokepoint for gold entering formal markets, though it has certified gold from mines with documented controversies. The Initiative for Responsible Mining Assurance, IRMA, is the only major standard governed jointly by industry, downstream buyers, investors, communities, and labour groups, with detailed site-level audits, though coverage remains limited. The Copper Mark now covers roughly 38% of global mined copper. ESG ratings, meanwhile, are a weak substitute for any of this: a widely cited MIT study found major ESG raters agree with each other only about half the time, and Vale carried a mainstream ESG rating before the Brumadinho disaster.

All things considered, a practical approach for an individual investor is less about finding a perfectly ethical company, which is unlikely to exist regardless of the industry, and more about building a habit of checking specific, verifiable things before you commit capital:

Jurisdiction and rule of law in the country of operation. Whether the disclosed tailings facility uses a safer downstream construction practice or riskier upstream methods, and whether it's GISTM-conformant. Whether the company is associated to projects that have an unresolved FPIC or community consultation dispute. Whether mine security has any documented history of violence, and how the company has responded. The company's disclosed fatality record and how transparently it's reported. Water sourcing in arid operating regions. Whether the host country participates in the Extractive Industries Transparency Initiative. The specificity of the company's sustainability reporting, audited figures versus vague commitments. Whether the company discloses grievances and its responses to said grievances. Management's track record at previous companies.

There isn’t a service or automation that can do this work for you perfectly, and it requires checking sources independent of the company itself. The Business and Human Rights Resource Centre's company profiles, the Environmental Justice Atlas, MiningWatch Canada, and local news outlets reporting from the country of operation.

We should take a second to appreciate the critical importance if the global mining industry. Mining underpins the energy transition and supports hundreds of millions of livelihoods worldwide, including in the artisanal sector. That fact is as much of our reality as all of the forementioned. The industry can be both essential and, in well-documented instances, deeply harmful. Holding both of those things in view, rather than picking whichever one is convenient, is what conscientious research actually requires.