Though Few Ever Strike It Rich, the Legendary Lure of This Lustrous Metal Is Enough to Keep People Panning for Pay Dirt the World Over

GOING FOR GOLD THOUGH FEW EVER STRIKE IT RICH, THE LEGENDARY LURE OF THIS LUSTROUS METAL IS ENOUGH TO KEEP PEOPLE PANNING FOR PAY DIRT THE WORLD OVER

BY ALLEN ABEL © Kerrick James/Corbis © Kerrick

8 BOSS 4 s u mm e r 2014 STRINGER/INDONESIA/REUTERS/Newscom MUHAMMADYAMIN/REUTERS/Newscom

Aerial views show the Grasberg open pit mine, in Indonesia’s Papua province. The mining operation is run by the U.S.-based Freeport McMoRan Corp.

HAVING cut his teeth in Life for those working at Grasberg the gold mining industry in western isn’t easy, as Prentice and his colleagues Australia, Andrew Prentice had been discovered during their multi-day stay. exposed over the years to many large “We experienced all aspects of living operations in isolated locations. But and working in such a remote and nothing prepared him for what he rugged location,” he says. “We witnessed found atop a remote mountaintop in a large earth tremor, somewhere around West Papua, Indonesia. 7 on the Richter scale, several landslides Th e Grasberg mining operation and also felt fi rsthand the near freezing there, run by Freeport McMoRan conditions at the Grasberg open-cut Corp., is so massive that its human- mine at the top of the peak.” hewn mile-wide crater can be seen But for those toiling away in the from space. mines at Grasberg, the lure of the gold “I was in awe,” recalls Prentice, buried there would seem to outweigh managing director for Dixon Asia the risks and hardships. It’s been that Pacifi c, who made the trip to provide way since the fi rst gleaming fl ake of technical and sales support for Dixon gold was discovered. products used in mining. “With nearly ©iStockphoto.com\Goruppa 20,000 employees living and working in such a remote location, the operation “Gold” resembles managing a small city on the top of the highest peak you can imagine—4,300 meters (14,000 feet) in the air, amongst glaciers and thick rain forest.”

www.dixonva lve.co m s u mm e r 2015 4 BOSS 9 akg-images/Newscom

Miners with pneumatic drill working in one of the Crown Gold Mines in Johannesburg, South Africa, c. 1930.

everything from Oscar statuettes to Olympic medals to the delicious Indian dessert called burfi . It’s worth noting, however, that 78 of every 100 ounces that are taken from the ground are used to make jewelry. Picture History/Newscom Picture Gold Diggers Miners pose for a photograph near Nevada City in California during the Gold Rush. Th e process of discovering, extracting and refi ning gold is as old as the To obtain the estimated 171,000 it ever has been, with billions and pharaohs, with some modern twists. metric tonnes (377,000,000 pounds) of billions of people of every nation, tribe Th e atomic weightiness of gold is the gold that have been unearthed over the and social stratum laying claim to at basis for “placer” mining, which, in its past 5,000 years, muckers and mushers least a gold chain, a gold bracelet, basic form, entails nothing more than have frozen to death in the Klondike, a gold necklace or a few shares of swishing sand from a riverbed with panned for pay dirt in muddy streams gold-mining stock. some water in a pan and waiting for the from California to the Congo, ravaged Of course, all that glitters is not particles of gold to settle to the bottom the great civilizations of pre-Columbian gold, Shakespeare sagely said. But all or “pan out.” America and scraped bare the summits that is gold does glitter, forever—it But the world is far too hungry of forbidding mountains from Papua to never rusts, corrodes or fades. Gold for gold to be content with a few Peru … all in search of El Dorado. conducts electricity perfectly, is grains from sloshings. On an industrial A very, very few struck it rich. nonpoisonous and edible, can be scale, gold production involves Many more were crushed in cave-ins, hammered and drawn into sheets and massive operations in city-sized open drowned in torrents or shot down in wires only a few atoms thick, and has pits and vast underground tunnels in cold blood by rival prospectors. been minted as coinage since the days some of the world’s most remote and Yet the Gold Rush never ended. It of King Croesus of Lydia in the sixth inaccessible corners, using machinery never will. Th e lust is as strong today as century B.C. It can be used to gild that can shovel, truck, pipe, crush and

PRODUCT SPOTLIGHT DIXON SUPPORTS THE GOLD MINING INDUSTRY WITH A VARIETY OF PRODUCTS: Mining: Boss fi ttings, cam and groove, valves, shank and water fi ttings, pipe and i welding, clamps and hydraulic fi ttings.

10 BOSS 4 s u mm e r 2015 convey hundreds of thousands of tons of raw ore every day. At Grasberg, the largest gold The key to liberating gold from production operation in the world, there are more than 500 km (310 miles) its less lustrous companion minerals of underground tunnels to support production and operations, notes is the infamous and deadly chemical Prentice. For workers traveling from the mid-mountain town of Tembagapura cyanide, an 18th-century discovery that up to the open-cut mine, the daily trip to work is arduous, requiring first was put to practical use in South a long drive up the mountain, through underground tunnels and along African mines in the 1890s. treacherous dirt roads. “Some folks even take a cable car from the processing plant to the mine site to begin work each day,” he says. 2,900 degrees Fahrenheit. Impurities are A Steep Price The key to liberating gold from its poured off, and the process is repeated less lustrous companion minerals is the until only molten gold of 99.99 percent No nation is more manic for gold than infamous and deadly chemical cyanide, perfection remains. India, although it has its rivals. In an 18th-century discovery that first was Depending on the market price of Calcutta, generations of impoverished put to practical use in South African gold, a concentration of as little as one dust-sweepers called Newaras, some as mines in the 1890s. Most commonly, gram of pure gold per ton of rock can young as 12, whisk the pavements of the a solution of sodium, potassium or make the entire operation profitable. jewelry district at dawn, gathering calcium cyanide is used to dissolve gold But while bars of glowing bullion are enough specks to sell for a dollar or two out of crushed rock, producing a muddy being stacked in vaults and sculpted to sustain themselves for another day. pulp that then is treated at high heat into ornaments, the leftovers of the In South Africa, the world’s with carbon or zinc and hot water to extraction—millions of tons annually sixth-largest producer of gold in 2013 leach or precipitate the precious metal. of sand, stone, cyanide, mercury and (trailing China, the United States, Further refining takes place at a myriad of other friendly and/or Russia, Australia and Peru, but ahead of a smelter where a witches’ brew of hazardous chemicals—need to be Canada, Mexico, Uzbekistan and chemicals is added to the gold neutralized and bulldozed into Ghana), desperately poor “zama-zama” precipitate and heated to more than man-made Himalayas of dross. miners risk their lives to sift through the

A worker watches a lift that he is controlling while a giant dry grinding ball mill spins behind him in Mill 6 at Newmont Mining’s Carlin gold mine operation near Elko, Nevada, on May 22, 2014. Right: Molten gold is being poured into ingots. RICK WILKING/REUTERS/NewscomRICK ©iStockphoto.com\slovegrove

www.dixonva lve.co m s u mm e r 2015 4 BOSS 11 MUHAMMADYAMIN/REUTERS/Newscom

Aerial views of the Grasberg Mine

men, none can match the snow-crusted equatorial peak named Mount Carstensz in Indonesia. It was there, in 1936, that a party of Dutch climbers found themselves 14,000 feet above sea level on a tropical alp abundantly rich in copper ore and its geological fellow traveler, pure gold. Today, the operation known as the Grasberg Minerals District—which Andrew Prentice visited—is mined by Freeport-McMoRan, headquartered in Phoenix, Arizona. From this largest gold reserve in the world, PT Freeport Indonesia extracted more than 1 million ounces of gold in 2013.

MUHAMMADYAMIN/REUTERS/Newscom In some ways, the crushing, sorting, shipping and smelting of ore that Freeport does today is easy, compared dust of abandoned, crumbling pits To a few lucky souls, the mother to the early engineering challenges and shafts. But it gets worse: Around lode comes much more easily. In 2013, posed by Grasberg. Johannesburg, thousands of illegally an amateur Australian prospector Grasberg is 63 miles from the trafficked “gold boys” toil deep waved a metal detector at a patch of dirt Arafura Sea, yet in such altitudinal underground in brutally enforced in the state of Victoria and discovered isolation that there was not even a slavery, digging, hauling, crawling a 12-pound nugget worth more than rough track hacked to the mountaintop and dying for the ore that feeds the $200,000. before the Dutch arrived. It took world’s insatiable appetite for the But of all the “Them thar’ hills” that 17 days for Freeport engineers to precious metal. have made a Midas out of ordinary safari to the site in 1960 in a region so

12 BOSS 4 s u mm e r 2015 STATES OF GOLD Today...

Data by state shows that most U.S. gold production takes place in Nevada and Alaska. Utah and Colorado are close followers, and South Dakota and California are also signiﬁ cant sources of the yellow metal. Au

...and Yesterday

North Carolina: 1799 Georgia: 1828 California: 1848 Colorado: Late 1850s South Dakota: Conrad Reed fi nds The nation’s second Gold is fi rst The Pike’s Peak Gold Late 1870s a 17-pound “glittering gold rush starts in discovered by James Rush in Colorado Gold discoveries in stone” in Little present-day Lumpkin Marshall, setting off signals the fi rst the Native American Meadow Creek, County and soon the California Gold major push into the territory in the Black Cabarrus County, on spreads through the Rush that would draw Rocky Mountains. Hills of South Dakota his father’s farm. North Georgia gold-seeking “49ers” start a new gold rush By 1804, the Mountains. from across the in the late 1870s. Carolina Gold Rush U.S. and around is underway. the world.

www.dixonva lve.co m s u mm e r 2015 4 BOSS 13 to carry 240,000 tons of concentrated ore a day back down the mountain to The quest to find the next Grasberg is a new port on the coast. Today, the Grasberg Minerals one of our planet’s most lucrative, District encompasses three operating mines: the Grasberg open pit (where frustrating and blood-stirring pursuits. operations are expected to continue through 2017), the DOZ underground “There’s no one to ask the way to go—you mine and the Big Gossan underground mine, a tabular, near vertical ore body. can only ask the rock,” says IAMGOLD’s Prentice’s work at the massive operation—which took him on site Craig MacDougall. surveys throughout Grasberg’s mining, production, processing and power generation departments—was aimed far removed from the industrialized and ice of the peak; “the toughest at identifying opportunities to improve world that, according to corporate road-building project attempted productivity and operator safety lore, one engineer was able to trade anywhere in the world,” in the words through the correct selection and use a metal hammer to a local chieftain of George A. Mealey, former president of Dixon products (See box, p. 10). for the right to build a helicopter of Freeport. “Through our local distributor in landing pad. Then came the largest aerial Indonesia,” he explains, “Dixon supplies The first challenge was to build tramway in the world, an entirely new a wide range of products to the site— a nearly vertical freeway to Grasberg city to house thousands of workers, from hose couplings, clamps and valves —75 miles of hell from the quicksand containment ponds, heavy-machinery used in underground production to of the mangrove swamps to the snows yards, training facilities and a pipeline petroleum handling equipment used to

Mill at Yanacocha, Peru, run by the Newmont Mining Corp. Courtesy of Newmont Mining Corporation

14 BOSS 4 s u mm e r 2015 fuel trucks, along with fi re protection products used at the mine and also the township.” Of course, Grasberg isn’t the only gold mining operation with notable production. Th e second-largest gold mine in the world—Yanacocha, Peru— is run by the Newmont Mining Corporation of Colorado, which has extracted more than 20 million ounces of gold since the 1980s. In third place is the Goldstrike complex of open-pit and underground mines in northeastern Nevada. Th e Barrick Corporation of Toronto reported in 2013 that at least 12 million ounces of gold remain to be extracted from Goldstrike. Th is will hardly be enough to satiate the universal hunger for gold. Th e quest to fi nd the next Grasberg is one of our planet’s most lucrative, frustrating and blood-stirring pursuits. “It’s a game where you’re the ultimate detective,” says Craig MacDougall, senior vice president of exploration at Toronto-based IAMGOLD. “Th ere’s no one to ask the way to go—you can only ask the rock.” IAMGOLD, which operates mines STAFF/REUTERS/Newscom/Adam Tanner STAFF/REUTERS/Newscom/Adam in Surinam, Burkina Faso, Mali and the Canadian province of Quebec, took its A miner operates an $18 million mining shovel to remove rock and dirt from an open-pit mine at name from the self-description of King the Goldstrike Mine in northeastern Nevada, the most productive gold mine in U.S. history. Musa I of Mali, the real-life Midas of the 14th century. Accompanied by tens of still rely on local knowledge—in West one fl ake of gold. It’s been going on like thousands of gold-liveried slaves, Musa Africa, we go where the local people are this for centuries, which is strange for decamped for Cairo and Mecca with actively mining, or we ask them to show a metal where we still have every ounce a fl otilla of camels burdened down with us the old areas where their people used that has ever been minted. It doesn’t gold. He gilded the villagers he met to fi nd gold. rust, it doesn’t wear out, but we still with 24-karat dust. “Th ese people have so little want to fi nd more and more. “We still do a lot of boot and available to them that they will do “In the eyes of a layman, you just hammer work,” MacDougall says. “We everything from raising crops to pick up a rock and look to see if it’s still send guys into the fi eld to look at panning every fl ake of gold out of the things and take samples. Th at’s been a Sahara just to survive. Th ey will do mainstay since the Klondike days. We some very dangerous things for literally

INSECT ALLIES Gold prospectors of the 21st century have unsuspected their exoskeletons, and to excrete allies. In 2012, an Australian entomologist named Aaron Stewart the useless and no-good gold and silver published research showing that termite nests located close to that mess up their body chemistry. known underground concentrations of gold ore displayed higher “Drilling is expensive,” Stewart says. concentrations of gold than nests farther away. “If termites can help narrow down the area that needs to be It turns out that some species of termites and ants are able drilled, then exploration companies could save a lot of money.” to accumulate the zinc and magnesium that they need to solidify “Termite” ©iStockphoto.com\defun

www.dixonva lve.co m s u mm e r 2015 4 BOSS 15 BY THE NUMBERS $ $ Super Pit, Australia’s largest $ open-cut gold mine. TOP 10 GOLD RESERVES IN THE WORLD

#1 GRASBERG 106,231,000 oz gold Papua, Indonesia

#2 SOUTH DEEP 81,413,000 oz gold Near Johannesburg, South Africa

#3 LIHIR 64,100,000 oz gold Niolam (aka Lihir) Island, Papua New Guinea

#4 MURUNTAU 50,000,000 oz gold Kyzyl Kum Desert, Uzbekistan

#5 OLYMPIADA 47,500,000 oz gold Central Siberia, Russia

TOP GOLD-PRODUCING COUNTRIES IN 2013 #7 PUEBLO VIEJO 40,085,000 oz gold China/mine production: 420 MT (metric tons) 1. Dominican Republic Australia: 255 MT 2. MPONENG United States: 227 MT #8 3. 39,557,000 oz gold Russia: 220 MT 4. Near Johannesburg, South Africa Peru: 150 MT 5. #9 CADIA EAST South Africa: 145 MT 6. 37,600,000 oz gold Canada: 120 MT 7. New South Wales, Australia Mexico: 100 MT 8. #10 OBUASI Uzbekistan: 93 MT 9. 29,830,000 oz gold Ghana: 85 MT 10. Ghana, Western Africa

SOURCE: http://goldinvestingnews.com/43146/ Source: https://www.goldrushexpeditions.com/mining- 2013-top-gold-producing-countries.html com-reveals-the-worlds-top-10-biggest-gold-reserves/

16 BOSS 4 s u mm e r 2015 Excavator parked in an open-cast pit at change of shift

unfi lled for three months or longer, due to a shortage of highly trained personnel. “Th is industry has a lot of diff erent players,” says MacDougall. “Some are professionals; some are dreamers. Th ere will always be a certain amount of cowboy and swashbuckling, and at the other end of the spectrum, ©iStockphoto.com\Falcor people understand that if you run your business on good, solid fundamentals, shiny,” MacDougall says. “But when you The Search Goes On you can build a successful company use the analytical techniques of science, Aft er 5,000 years of digging, sift ing, for the long term.” you can discern very subtle diff erences. panning and praying, golden-eyed “All the gold which is under or We take all kinds of measurements and dreamers in 2015 fi nd a market as wide upon the earth is not enough to give do geochemical sampling beyond just open today as it was in the days of in exchange for virtue,” wrote Plato, but assaying for gold content. We look at Solomon, Midas and Tut. Th e Centre few have heeded his words. From the alteration assemblages, do microscopic for Economics and Business Research Andean foothills to the mountaintops work—look at diff erent characteristics reported in December 2014 that more of Indonesia, the immemorial search of the trace element geochemistry.” than one-third of mining jobs stay goes on.

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