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diamond rings or community welfare?

how the international mineral trade harms communities and environments

ingrid gorre, Irc-ksk/friends of the earth philippines

As with other commodities, the international trade in minerals is driven by demand. Industrialization has increased global demand for minerals a thousand fold, and consumption continues to grow as minerals are involved in most of the goods and services consumed today. However, our voracious consumption of metals comes at an enormous price. Mining has displaced numerous communities, especially indigenous peoples. In the Philippines , for example, over half of all mineral applications are in the ancestral domains of indigenous peoples. Globally, over 50% of all mining areas are in similarly significant places. mining's environmental and social costs The environmental consequences of mining are also serious: nearly 80 tons of mining waste are discarded for every ounce of gold. Mining also requires huge amounts of energy, and the mining sector is responsible for about 10% of global energy consumption. Mining also requires tremendous amounts of water: the amount of water used to extract copper, for example, is 3,200 liters per ton of ore. The global mining industry is structured in a way that disadvantages poor communities and developing countries. While developing countries provide most of the world's mineral requirements in the form of ore, processing usually takes place elsewhere. The country where the mining takes place reaps far fewer benefits than the country selling the end product.

Whilst mineral resources are found in both developed and developing countries, the latter bear the main social and environmental costs. From 1999-2002, 68% of the world's mineral exports came from developing countries. In contrast, developed countries are the major exporters of semi-manufactured and manufactured goods based on these mineral resources. This structure endures in part because of “tariff escalation”: tariffs on mineral ores are low, and high import tariffs on processed products discourage manufacturing elsewhere.

does the world need more mining?

Given the huge social and environmental consequences, should the international trade regime encourage increases in the mineral trade, potentially increasing consumption? The world has not yet maximized its use of existing minerals, as it could do through more efficient recycling. The metals in computers and other electronics, for example, can be extracted and recycled instead of turning to new mineral resources.

Furthermore, some minerals, such as gold and gems, are extracted purely for investment purposes and ornamental use. Seventy-eight percent of the global demand for gold, for example, is for jewelry. WTO negotiations include proposals to reduce tariffs in the gold and gems sectors. This would bring down the price of those commodities, and could encourage further extraction in developing countries.

International trade rules should be about encouraging less mining and more recycling. They should also be about the primacy of food and other essential products, and should discourage trade in less essential minerals that are produced at huge social and environmental costs. After all, the lives and livelihoods of communities are far more important than any 24- carat gold ring.

transnational power in latin America Many of the largest transnational companies now operating in Latin America are dedicated to extracting and selling the region's natural resources. A recent survey by the magazine América Economía of the 500 largest companies active in the region showed that over half of the twenty most profitable companies were dedicated to the export of natural resources, with hydrocarbons being the main focus. Five of the top twenty companies were oil companies – Petrobas, Repsol/YPF, Esso, Texaco and Royal Dutch/Shell – and companies trading in hydrocarbons had sales of more than US$250 billion. Other key natural resource-related sectors include steel, cement, food and forest products. paola visca, third world economics, www.redtercermundo.org.uy