Mekong diary: gold rush

Every few miles on the banks of the Mekong River, men and women squat in ones and twos holding wide, shallow pans. They dip these into the flow scooping up sediment. Then, in a swift, rhythmical motion that is thousands of years old they shake and twirl these, sloshing the water and sand out, leaving the heavier deposit. And, if they’re lucky, tiny nuggets of gold.
Rivers are the great givers of the earth. Egypt is called the Gift of the Nile. The Klondike River in Canada gave its name to the 1890s gold rush. The Mekong is no exception. Formed by great tectonic plates clashing into each other millions of years ago, super-heated fluids formed and hardened to form gold. These are then washed downstream through the mass of moving gravel.
Buddhists and animists alike attribute human qualities to its waters, the “Mother River”. Cut by the great floods of time, the river breathes life and wealth. It’s a metaphor for our existence: resilient, powerful, always moving, always changing. And, like the earth, vulnerable to greed and excess.
South-east Asia’s gold producers are small by comparison to the giants: China, Russia and Australia. They’re minnows, but not penniless. Laos produces around nine tonnes per annum, worth $55 million at today’s prices. Cambodia produces 13, Myanmar around two and Vietnam 700,000 kg. China tops the gold charts with 378 tonnes according to the Gold Council.
Time was when gold was mined largely by artisanal miners, often illegally. Panning is one method. Another requires a narrow, six-foot bamboo cage just wide enough for a man to fit in. A hole is dug to reach the right level where the gold lies in rich alluvial sediment. The prospector then immerses himself in the mud for up to 20 minutes, breathing through a plastic tube clenched in his teeth fed oxygen from a primitive pump.
It’s hard, sometimes dangerous work. But it can pay. By choosing the right spot, prospectors can find up to $1,000 worth of gold a day which in a country where $2,000 per annum is considered a living wage, not to be sneezed at.
But, like everything else in China’s backyard, this is changing. In uncertain times the world takes refuge in gold. The gold price reached record highs in 2024. It is currently trading at a fraction below its peak at $2,789 per troy ounce.
It could breach $3000. Donald Trump threatens to spark trade wars across a broad front by upping trade tariffs on Chinese, Canadian, EU and Mexican imports. Inflation will quite likely spike again, just as central banks have begun to get it under control. This would trigger another global economic downturn. Investors would flee stocks and pile into gold. This has not gone unnoticed on the banks of the Mekong.
More to the point, the gold price is on the radar of Chinese and Thai investors, who are piling into this small but lucrative seam of the world’s gold reserves. As our boat heads further upriver, towards the Chinese and Thai borders, dozens of mechanised strip-mining operations loom out of the morning mist.
There are more giant diggers and 20-ton lorries moving in an endless cacophony of dust and noise than you can shake a bulldozer at. And they’re in a rush — a gold rush. The rush is because many of these areas will, within a few short years, be underwater, as more and more dams come onstream.
It works, as far as I can see, something like this: an operator is granted a concession by the Lao government which, nevertheless, persists in its claim that it wishes to protect the unique ecology of this glorious river system.
Huge Chinese-made diggers – often as many a dozen – create a lagoon by dumping thousands of tons of soil in the river. The water is then pumped out and ferried to a giant washer further up the bank where the sediment is filtered and any gold is collected. Rinse and repeat up and down this long-suffering river.
Most of the plant is Chinese. So are many of the workers. The ethics of these operations is highly dubious. Local Lao communities are affected. The rhythm of the river is disturbed. Fish stocks are depleted.
One gold mine run by a Chinese company in southern Laos, according to a recent report by an NGO, is releasing waste into a river in Sekong province, killing fish and fouling water used by villagers for drinking and bathing.
Further south in Cambodia, the Mekong’s next stop after Laos and Thailand, one Chinese company has been dumping toxic water in the protected Prey Lang Wildlife Sanctuary, fouling it with cyanide which is used in gold extraction.
Laos (ranked 136 out of 180 in Transparency’s Global Corruption Barometer) “liberalised” its restrictions on mining a few years ago to promote growth. It has since, under pressure from the international community on which it depends, rowed back – but only a bit.
Gold is not the end of it. The Mekong basin is a rich, and largely unexploited, source of copper, lead, zinc, phosphate, potash, oil and gas, coal and gemstones, as well as rare earth materials such as nickel, tin and bauxite.
The appetite for rare earth materials will increase exponentially as technologies become more advanced. Global critical mineral demand is expected to increase from 7.1 million tonnes in 2020 to 42.3 million tonnes in 2050. Global commitments to decarbonisation are the main drivers of this growth. But all manner of sophisticated industries, including defence manufacturing, will also compete for these materials.
China dominates rare earth production. But other countries in south-east Asia have significant potential: notably Vietnam, Indonesia and Myanmar.
The Mekong river basin is believed to be around 17 million years old. It took that long to shape it and a few thousand years to populate it. It’s taken just a few decades – a blink of an eye, comparatively speaking — for man to start tearing it apart.
A Message from TheArticle
We are the only publication that’s committed to covering every angle. We have an important contribution to make, one that’s needed now more than ever, and we need your help to continue publishing throughout these hard economic times. So please, make a donation.