Speaker 1: So it's around 6 p.m. in the evening, and we're heading up a pretty massive hill to try and get a firsthand look at one of these mines to see their environmental impact.

Speaker 2: In Africa, tens of billions of dollars in gold is illegally smuggled out of the continent each year.

Speaker 3: What we have found is that more than 435 tons of gold was smuggled out of Africa in 2022. And at the current price of gold today, this corresponds to a value of more than 36 billion U.S.

Speaker 2: dollars. Ghana, one of Africa's top gold producers, has seen the impact of that illegal mining. Among the biggest complaints from communities here in Ghana about illegal mining is that water that was once clear is now polluted. While the vast majority of the world's gold comes from large mining companies like Newmont, Barrick Gold and Agnico Eagle, gold is also a source of income for millions of small artisanal miners, a source of revenue for many African governments and the cause of human rights violations and environmental degradation. And gold prices are surging. In January, spot gold rose more than $2,600 an ounce. U.S. gold futures have seen similar levels. One reason for that growth is that in difficult economic and geopolitical times, investors bet on gold for its ability to store value.

Speaker 4: We've seen this perfect storm of just geopolitical events with the war in Ukraine and what's going on in the Middle East.

Speaker 5: All the fundamentals that have caused gold to have a fabulous year this year are still intact. The sky's the limit, to be honest, in gold prices.

Speaker 2: Retailers like Costco are getting in on the action, too, selling as much as $200 million a month in gold bars. The warehouse club started selling bullion in late 2023 and prices could go even higher, reaching up to $3,000 an ounce by the end of 2025, according to Goldman Sachs. We travel to Ghana to find out what impact illegal mining is having in Africa. While legal mining is subject to environmental regulations, that's not the case for illegal mining, locally known in Ghana as Galam Se. Ghana's gold exports were expected to reach $10 billion in 2024. Small-scale miners make up about 40 percent of Ghana's total gold output. About 70 to 80 percent of small mines are unlicensed.

Speaker 6: Twenty percent of gold produced around the world is from those small-scale sources, whereas the small-scale mining is often very informal. There is a lot of illegal activity.

Speaker 2: Small-scale miners dig shallow holes across acres of land near bodies of water without refilling holes after the gold is extracted. Mercury, often used to extract gold, can leak into the water. More than 60 percent of Ghana's freshwater sources are contaminated by chemicals and toxins from illegal gold mining.

Speaker 7: This is the Butre River. Two years ago, it was very clean and pristine. And this is the effect of Galam Se on our water bodies. It's very devastating.

Speaker 3: When you look at Google Earth and you look at a map of Ghana, you will see that a vast majority of the territory is no more green, but it's more brown. So in terms of pollution, not on the different river, but also for the farming, it has been a disastrous impact.

Speaker 2: In October, hundreds marched in Ghana's capital, Accra, calling on authorities to end the practice of illegal mining. Yaw Mwafo, a small-scale miner operating legally, says he's been in the business for a decade and employs around two dozen people. He says his business and those like it are caught in the crosshairs of this fight.

Speaker 8: I need the same water to do my business at a site. At the same time, I need it to drink it or bath with it. So why should I go and spoil it before using it?

Speaker 2: Ghana temporarily banned small-scale mining in 2017 and has waited a further ban. If the government ultimately cracks down and says small-scale mines cannot operate anymore, what does that mean for someone like you?

Speaker 8: It has brought up foreign income to the country.

Speaker 2: It's become an integral part of the economy.

Speaker 8: Yes.

Speaker 2: Before being sold to buyers, gold is sent to a refinery like the Sahara Royal Gold Refinery, where it is weighed, put in large tumblers with acids and then smelted into bars.

Speaker 9: Refining basically means you taking out impurities.

Speaker 2: While the price of gold is reaching all-time highs, on Africa's so-called Gold Coast, many refineries are laying idle. And because it's a cash-driven industry, it's difficult to regulate. Participants are, in some cases, dependent on criminal organizations and may inadvertently contribute to terror financing, money laundering, sanctions evasion or human rights and labor rights abuses.

Speaker 3: Undeclared gold is very problematic for several reasons. One, of course, is because no tax can be collected on it. So this will result in insignificant revenue losses for African states. And undeclared gold is also gold on which no control were made, which means that there is a high risk that this gold has been produced in violation of human rights or the environment.

Speaker 2: The top gold producers are China, Russia, Australia, Canada, the U.S.

Speaker 4: and Ghana. It takes a significant amount of scale to produce the amount of gold that's produced annually. And most of the gold comes from major gold miners like Barrick and Newmont, Kinross Gold, Agnico Eagle and various smaller miners. And gold is also a byproduct of other mines.

Speaker 2: Africa produces between a quarter and a third of the world's gold, with more than half of the gold extracted on the continent in 2022 coming from artisanal and small-scale miners. China alone mined 378 metric tons of gold in 2023, or about 10 percent of the world's total. Since the early 2000s, more than 50,000 Chinese gold miners have migrated to Ghana to work in small-scale mining.

Speaker 3: If we take the example of Ghana, a large part of the sector is controlled, for example, by Chinese citizens. The Chinese arrived with excavator and started to extract those gold in a very problematic manner. They extract gold illegally. Most of the time it is smuggled directly to Dubai.

Speaker 2: Dubai, sometimes referred to as the City of Gold, also plays a critical role and is home to more than 20 gold refineries and 7,000 traders in precious metals and stones.

Speaker 3: If you want to avoid having gold from the DRC into conflict or, I don't know, in Sudan or for Mali or for Zimbabwe, the majority of this illegal gold is exported to the UAE. And from the UAE, a large part of it is also exported to Switzerland. And then from Switzerland, we know that a huge part of gold is also exported to the U.S. But when it's imported in the U.S., the majority of the importer will just say, oh, a gold from Switzerland, refined in Switzerland. The origin of this gold would just be Switzerland. But this gold, which is sometimes presented as recycled gold, can be gold which was two weeks before in a mine controlled by a jihadist group, by a Wagner group or by other criminals.

Speaker 2: Gold exports from Ghana more than doubled between 2012 and 2022, from 243 metric tons to 609 metric tons. The UAE, Switzerland and India were the top recipients of African gold during that same time period, accounting for 80 percent of the continent's exports. Historically, about 212,000 metric tons have been mined worldwide, including about two thirds extracted since 1950. Taken together, that gold could be placed inside a cube measuring around 22 meters long on each side. Gold is a popular material in jewelry and an essential metal that performs critical functions in spacecraft, jet aircraft engines, computers, communications equipment and other products. It is also held and sought after by central banks around the world.

Speaker 4: It's around 20 to 22 percent of all the gold that's ever been mined is being held in central bank vaults or central banks own that gold. And so central banks continue to try to diversify away from fiat currencies, in particular, the U.S.

Speaker 2: dollar. Gold is expected to extend its bull market run as central banks look to purchase more of the yellow metal in the future.

Speaker 4: One of the reasons why we remain bullish on it going forward is that we see U.S. debt to GDP is unsustainable and just the insatiable need likely in the future for more quantitative easing. And this debasement of the U.S. dollar is the biggest reason why central banks continue to demand gold at a high level, despite really gold prices continuing to go up. Central banks are big buyers.

Speaker 10: I think it's the ultimate insurance policy in an increasingly uncertain world and is the best insurance policy against the reckless fiscal agenda of both Democrats and Republicans.

Speaker 2: But how do investors and consumers know if their gold is properly sourced? The London Bullion Market Association, a U.K.-based trade association, has become the global standard for gold refineries around the world, maintaining a list of 65 gold refineries worldwide that have proven to source gold legally.

Speaker 6: Our standard has become the de facto global standard for gold refiners and silver refiners around the world.

Speaker 2: But experts say despite that seal of approval, consumers, companies and the entire supply chain need to be hyper aware of where their gold is

Speaker 3: sourced. I think we all have a responsibility of consumer, because when you buy an iPhone, when you buy a jewelry, I think you have to know where this gold comes from. And if it's not possible, you have to ask. And if the company where you are buying this is not in a position to give you the answer, then it's a red flag.

Speaker 4: Anybody that's investing in gold or diamonds, for that matter, you know, you should understand that there are places in the world where these commodities are being produced in unethical ways.