Gold harvesting in Ethiopia is booming with no barriers to reaping its rewards. Technically it is simple to extract and demands very little capital with handy equipment such as pitch axe, spade, bowl and cheap mercury.
 

Gold is now used for jewellery, medicine, electronics etc. and was a medium of exchange starting around 3000 BC until it backed paper notes around 1700 AD. Following the ups and downs during World War II, its power waned as the international monetary system shifted towards floating exchange rates in 1974.
 

However, being a scarce commodity, its price has steadily risen from 365 dollars per ounce in February 2003 to 723 dollars per ounce last week. The list of causes for the price hike includes the devaluation of the dollar, gold-hungry India's growing economy (the purchaser of half the world's gold) as well as the misleading term 'terrorism' causing instability in markets and allegedly taking over supply chains.
 

This is good news for the government who earns valuable foreign exchange, reaching 90 million dollars last fiscal year, while spending in excess of what the country produces thus running a current account deficit.
 

The local gold market is also booming and gold is sold everywhere on an unprecedented scale. For instance, a decade ago there were very few gold jewellery shops confined to limited areas in Addis Abeba. Piazza, for instance, once boasted a large share with around 10 glittering shops; this has more than quadrupled and represents a mere fraction of the city's total.
 

While it may appear that residents of the city are bubbling with thick pockets, gold is not only respected as a luxury but also a saver against currency devaluation in times of inflation and a looming future of uncertainty. Value may be stored in highly fungible gold jewellery. In these times of inflation locking some gold away is a better bet than holding money in the bank with the saving rate at four per cent.

Ethiopia is endowed with vast mineral resources; gold being mined in the country's south: Adola, Shakiso, Hagermarianr, Borena, Asosa, Gambela, etc. In these areas the commodity is widely available in both ore and alluvial deposits.
 

Migration of labour forces to the areas seems inevitable. The accompanying influx will involve sex workers, violence and other social problems if the other African countries both blessed and seemingly haunted by the resource may be taken as an example. This is not to mention the environmental destruction in moving machinery, digging holes up to 30m deep and polluting waterways.
 

The traditional mines are good enough at their work. After discovering gold rich soil, a flow is created to a river to wash out the soil in order to filter the crude gold. The rough product is then refined by treating it with mercury as it selectively sticks to gold; mercury is also highly toxic.
 

Mercury was identified as a toxin when it poisoned several hundred people is Miniamenta Bay, Japan in 1960. Since then a disease that causes damage to the nerve system and birth defects was dubbed Miniamentra disease.
 

The world keeps an eye on mercury based-products. Many nations vehemently ban most of them as several hundred people died eating bread that was baked from wheat seed preserved by mercurial fungicide. 
 

Mercury can easily accumulate in human kidneys and be absorbed by hair. The current danger hyped food is fish that accumulate large quantities of the chemical in the ocean. Some countries have adopted stringent standards to avoid mercury tainted fish from entering the market.
 

The gold mining factories operating in Ethiopia also use mercury in addition to cyanide, a deadly chemical in even minute amounts. Although a study revealed that air within factories is saturated with mercury vapour, no one knows the workers' health status even though mercury could be detected by clinical urine analysis.
 

The presence of this chemical should be considered when the output of gold has risen from a few thousand Birr to over 300 million Br even if the producers are inefficient and waste over 50pc of the gold they are attempting to recover.
 

This is especially true as the gold mining areas are nestled amidst important rivers such as Awota, Mormora and Dawa, which would not escape being polluted by mercury or cyanide. In the rush to exploit this resource, other important endowments must not be sacrificed.  

This is Ethiopia's challenge in the coming years: balancing economic progress with protection of its vast resources. While developed countries are now spending vast sums to correct their mistakes of the past Ethiopia may learn from these examples and more responsibly progress.