All that glitters: the demand for gold is soaring. But some of the methods used to mine gold today take a heavy toll on the environment.

For thousands of years, people have been willing to do just about anything to acquire gold, even kill or conquer for it. In the early 1500s, King Ferdinand of Spain laid down the priorities as his conquistadors set out for the New World. "Get gold," he told them. "Humanely if possible, but at all costs, get gold."

Today, the push to "get gold" has little to do with building empires. It is mostly about the soaring demand for jewelry in places like India and China, the largest- and third-largest consumers of gold mined today. (The U.S. is second.) And it is also about gold as an investment during troubled times. At around $600 an ounce, the price of gold is higher than it has been in 25 years.

During the California Gold Rush, which started in 1849, gold was plentiful and relatively easy to mine with simple hand tools. Now, it's a lot harder. Much of the gold left in the Earth today is in the form of microscopic particles: Mining and refining that gold, much of which is located in the poorest corners of the world, often results in enormous damage to the environment.

Consider a ring containing three ounces of gold. For each ounce, miners may dig up and haul away 30 tons of rock and sprinkle it with diluted cyanide, which separates the rock from the gold. Workers at some of the largest mines move 500,000 tons of earth a day, pile it in mounds that can rival the Great Pyramids in size, and drizzle the ore with cyanide solution for years.

TOXIC WASTE

"You can mine gold ore at a lower grade than any other metal," says Mike Wireman, a mine specialist with the U.S. Environmental Protection Agency. "That means big, open pits. But it must also be easy and cheap to be profitable, and that means cyanide."

Many of these "open pit" mines have become the near-equivalent of nuclear-waste dumps. Although a significant amount of gold is still mined in the United States and other developed countries, about 70 percent of the world's gold is now mined in developing countries like Peru, Guatemala, and Ghana. Those are the places where the real battle over gold's future is being waged.

Gold companies say they are bringing good jobs, tighter environmental rules, and time-tested technologies to their new operations. But environmental groups say companies are mining in ways that would never be tolerated in wealthier areas. People who live closest to the mines say they see too few of mining's benefits while bearing too much of its burden. In Guatemala and Peru, people have mounted protests to stop the mining.

In the U.S., some retailers of gold jewelry are confronting uncomfortable questions about the costs of mining gold. In February, eight jewelry companies, including Zales (the second-largest gold retailer in the U.S., after Wal-Mart), signed on to a national campaign called "No Dirty Gold," pledging to work toward a resolution of gold's ethical issues. Tiffany & Company, which also signed the pledge, now buys its gold from a mine in Utah that does not use cyanide. Consumers packing the malls of Shanghai and the bazaars of Bombay sent jewelry sales to a record $38 billion in 2005, according to the World Gold Council. India, a country of a billion people, has traditionally been gold's largest consumer--for jewelry, temples, and dowries.

"Without gold, it's not a wedding--at least not for Indians," said Amrita Raj as she shopped in New Delhi last October for a "wedding set" consisting of a gold necklace, earrings, and bangles.

But the soaring price of gold is not simply a matter of the demand for jewelry; it is also driven by market psychology. Gold prices go up whenever people get anxious about other investments and look for a "safe haven" for their money. Today, for instance, experts attribute part of gold's high price to fears of terrorism, inflation, and the growing U.S. budget deficit.

SACRED MOUNTAINS

Yanacocha, a sprawling mine in Peru, is a massive open-pit operation. Opened in 1992 by Denver-based Newmont Mining, it is one of the world's most productive gold mines. At Yanacocha, mountains have been systematically blasted, carted off by trucks the size of houses, and stacked into towers of chunky ore. Irrigation hoses trickle millions of gallons of cyanide solution over the rock so the gold can be separated, smelted, and poured into bars.

Newmont, which has pulled more than 19 million ounces of gold from Yanacocha--more than $7 billion worth--believes that it can extract several million ounces more. But where Newmont sees reserves of wealth, the area's farmers and cattle grazers see sacred mountains that provide the resources they depend on for survival.

For many of the local peasants, Yanacocha evokes a tale of treachery any Peruvian schoolchild can recite: In 1532, the Spanish conquistador Francisco Pizarro captured the last Inca emperor, Atahualpa. The emperor, a god to his people, was held for months while he scrambled to amass the ransom demanded: enough gold to fill a room as high as his arm could reach. He turned over his gold, expecting to be freed. But Pizarro killed him anyway.

"When Yanacocha began its operations, we would only hear about how everyone was happy," says Father Marco Arana, a priest who runs a local group formed to challenge Newmont. "The mine was going to bring jobs, improve roads." No one thought much, he says, about the inevitable problems.

For Andean peasants, water determines everything. The people depend on it--for their animals, for drinking, for bathing. But the mine needs water too--vast quantities to dilute the cyanide solution. It was not long before the peasants began to complain that streams were drying up and filling with murky sediment. The water smelled foul.

Financially, Yanacocha has been a huge success. But with every ton of earth sifted, it became clearer that the mine had not just ripped up the landscape; it had remade the social architecture, too. There were growing class divisions, between the thousands of locals who had received well-paying jobs at the mine and the tens of thousands more who had not. People migrating to the region for work brought overcrowding and rising crime.

WHO CLEANS UP?

The biggest issue at Yanacocha is the one looming over every modern industrial gold mine: What happens after the mine has closed?

One answer can be found in Montana's Little Rocky Mountains. Zortman-Landusky was the first large open-pit cyanide operation in the U.S. when it opened there in 1979. Zortman built its cyanide heaps atop rocks that turned acidic. Cyanide and acid then seeped from the mounds, contaminating community water supplies. In 1996, when gold prices were plummeting, the mine's owner--Pegasus Gold of Canada--closed Zortman. Pegasus then went bankrupt, leaving most of the cleanup bill to the taxpayers: Montana's Legislature created a fund for water treatment--for the next 120 years--at a cost of $19 million.

By the time Newmont is through with Yanacocha, miners will have dug up a billion tons of earth--much of it laced with acids and heavy metals.

Four years ago, after Newmont acknowledged that 37,000 fish were missing from a river contaminated by the mine, an American geochemist, Ann Maest, was hired to study the streams and canals flowing from the mine.

In the short term, she concluded, the water was safe for human use. But long term, she says, the company's own tests show that the huge piles of rock will eventually leak acids into the surface and groundwater--much like the situation at Zortman. The only preventive, says Maest, would be "perpetual treatment."

LINGERING RESENTMENT

But if Newmont is going to pay for cleanups, it needs to keep profits high. To keep profits high, it needs to keep mining more gold. And to do that, it must make peace with the people who will remain long after the mine closes.

Dante Vera, a former Peruvian Interior Ministry official who once served as a consultant to Newmont, sometimes thinks that the clash between the mine and the peasants is so fundamental as to be beyond even the best intentions.

"Mining negatively affects the Andean cosmic vision of the unity of nature," says Vera. "The conflict cannot be settled with money. Mining generates resentments that are difficult to heal."

Gold Mining Around the World

TOP 5 COUNTRIES

South Africa   12%
Australia      10%
U.S.           10%
China          9%
Peru           8%

Jane Perlez is Jakarta, Indonesia, bureau chief, and Kirk Johnson is Denver bureau chief, for The New York Times; additional reporting by Lowell Bergman and Somini Sengupta of The Times.

All that glitters LESSON PLAN 2: INTERNATIONAL

BACKGROUND

Gold has been used in jewelry for thousands of years. Its first use as money was around 700 B.C. in what is now western Turkey. But ancient gold was easier to mine. Today's mining techniques are controversial because of their impact on the environment and on the people, often poor, who live near the mines.

CRITICAL THINKING

* Discuss the issue of gold as a cultural phenomenon. Have students brainstorm reasons why they think gold is so treasured in cultures around the world How many students own gold jewelry? Is it important for graduating seniors to have a gold or faux gold class ring?

DEBATE/DISCUSSION

* Split the class in two and have students discuss and/or defend the following statements:

* Gold-mining companies are to blame for destroying the environment in poor countries

* Consumers are to blame for the gold-mining problems because of their constant demand for gold jewelry

DISCUSSION QUESTIONS

* Should gold-mining companies be required to clean up their waste or pay a tax toward the cleanup?

* Would you be willing to pay more for gold jewelry to be assured that it had been mined with environmentally friendly methods?

WRITNG PROMPT

* Write an ad for a jewelry store that sells only gold that is mined by environmentally friendly methods.

FAST FACT

[right arrow] Astronauts wear gold coated visors to protect their eyes from the sun when working outside space vehicles

WEB WATCH

www.nma.org/pd/gold/gold_history.pdf A mining industry History of Gold" time line, from 4,000 B.C. to 2002 www.nodirtygold.org Advocacy group information on gold mining Click on "students."

Answers:

1. [c] Aryans.

2. [d] his forcing through legislation that effectively gave him such powers.

3. He promised a return to the powerful, militaristic Germany of the past. (Similar wording is acceptable.]

4. [c] Jewish athletes would not be treated fairly.

5. [b] stripped Jews of citizenship and made it against the law for Jews and non-Jews to marry.