Photo credit: Flickr/Laszlo Ilyes

There are 18 million ounces of gold buried in the Chilean mountains. Canadian gold miner Barrick Gold (GOLD -3.98%) has already spent more than $5 billion to build a mine to extract that gold. There's only one problem, in this part of the world water is more valuable than gold. Because of that, there is a real risk that Barrick Gold might just have to let most of that gold stay buried. Overall, water is a growing risk to the gold mining industry as its proving to be more valuable than the gold itself.

Barrick's water problems
The long-standing water issues at the company's Pascua-Lama mine that straddles the borders of Chile and Argentina continue to plague Barrick Gold. The indigenous community living below the mine believes that Barrick Gold is contaminating their water. Because water is so precious, they fear the company is ruining their livelihood. These issues are causing the company to endure a number of delays in building this massive gold mine.

In order to ensure the safety of the water surrounding its mines, Barrick Gold has set up a community water monitoring program. The company maintains 49 surface and groundwater monitoring stations at its Pascua-Lama project alone. In addition to that, the company has similar water monitoring programs in the Dominican Republic and in parts of South Africa. Water monitoring is only part of the solution as the overall scarcity of water in many places around the world presents an even greater problem.

Photo credit: Flickr/Andrew Parnell

A growing problem
Barrick Gold isn't the only miner running into water problems. Newport Mining (NEM -4.00%), for example, has delayed its Conga project until it can build sufficient water reservoirs. Newport Mining started facing environmental protests in 2011 over water issues, which led to the project being suspended. The company hopes to finally restart the project this year once its reservoir projects are complete. Overall, water issues remain a growing risk for gold miners.

Given the water scarcity issues in many places around the world, the mining industry's water issues are starting to cause concern about the long-term growth opportunity of mining companies. Credit rating agency Moody's noted this last year when an analyst said that, "Water scarcity is already changing the mining landscape as environmental legislation becomes more stringent — and operating in some countries increases political risk as mining companies' water supplies can be restricted if the needs of communities increase." We could see more mining projects being delayed or even scrapped altogether, especially if the price of gold doesn't head high enough to justify the cost of fixing these water issues.

Final thoughts
Water scarcity won't just be a mining problem in the future. Other water intensive industries like energy production are already facing similar issues. In the U.S. one of the reasons why hydraulic fracturing has so many opponents is because of the amount of water used in the process. Gold miners are facing similar problems around the world and will need to step up efforts to reduce or reuse precious water resources in an increasingly resource-constrained world.

Gold stocks might not make you rich, but this stock could