It’s no lie that gold sourcing and manufacturing processes are highly elusive. How each gold product transforms from raw resources spanning across continents to the world’s top refineries in Switzerland right to investors’ fingertips typically isn’t clear. Fully traceable gold is a concept that major organizations have been attempting to achieve for quite some time now, but some small-scale jewelers have already implemented it.
According to the World Bank, approximately 20% of the world’s gold production comes from artisanal mines. Small-scale mining efforts currently employ around 40 million people worldwide, including around one million children, based on data from the Human Rights Watch. These artisinal mines often have unsafe working conditions that harm employees and the environment.
Because of the current practices happening in artisanal mines, it makes sense that buyers, jewelers, investors, or really anyone involved in the process want to know where they’re getting their gold from.
“There is a genuine mess in the jewellery industry,” Greg Valerio, a jeweler, and activist, explained to Financial Times. “We’re dealing with a non-renewable extractive. There is no such thing as sustainable jewellery. It does not exist because we all deal in non-renewable extractive industries.”
“We need to start from the proposition that gold must be fully traceable and fully transparent. If you do not have those two components, in the context of an ethical claim, it’s just greenwashing,” Valerio continued.
So, how are independent jewelers prioritizing traceability to offer buyers sustainable purchase options?
Let’s look at Makal, an ethical jewelry brand sourcing its gold from eco-friendly artisanal miners. Makal’s founder, Daniela Colaiacovo, developed the brand with a commitment to creating jewelry with full clarity on material sourcing. Makal uses the company Nuggets by Grant to source its gold, which connects buyers to ethical artisinal mining communities that do not use child labor or other illegal practices.
Colaiacovo vets all of her suppliers to ensure all products are Fairtrade gold-certified. The Fairtrade gold certification is a guarantee that the metal comes from responsible mining tactics, including employee compensation, sustainability concerns, etc.
If mines want to gain a Fairmined certificate, the process can take 10 to 24 months. Assuming the mine meets all qualifications, they can receive a $4 premium per gram of gold as an incentive for following sustainability practices. The premium increases to $6 per gram if the mine also obtains an additional ecological certificate proving that the facility uses no cyanide or other harmful chemicals during the extraction processes.
“To charge a premium on mercury-free is to make it sound like it’s exceptional, rather than it should be what everybody’s doing,” Valerio explained.
Olga Rojas, a spokesperson for Fairmined, warns buyers that low-priced gold often signifies poor mining practices. The majority of gold has minimal traceability and comes from all over the world. Buyers who want to invest in a positive impact need to look for transparent products that support sustainable mining methods.
While increasing traceability in independent jewelry applications may be realistic, applying the same methods on a broad scale simply isn’t working right now. The world’s biggest refinery hub, Switzerland, has enacted numerous initiatives to end the harmful practices happening at artisanal mines, but this still doesn’t help buyers learn where their gold is coming from.
The London Bullion Market Association and the World Gold Council recently launched a joint pilot initiative last year, the Gold Bar Integrity program, to digitally monitor how gold moves from mine to vault. The program used a digital tracking solution to follow two major companies using blockchain technology. Following this anti-counterfeiting technology, users can scan a product with an app to check its authenticity.
Numerous refineries have also developed their own solutions, such as spray-on markers to track gold across critical touch points. While spray-on markers may not last after gold has been melted and re-developed, they do offer a starting point.
Scientific researchers at the University of Lausanne are approaching the problem from a unique perspective, with the idea of tracing gold’s origin by looking at its chemical composition. This scientific approach allows refiners to confirm the source of gold using a geoforensic passport.
The innovative ideas only stem from here. A data management company in Zurich is currently working on an AI-based technology that can locate a metal’s origin based on geographical elements. The machine-learning technology looks for elements from a particular area.
Clearly, several traceability solutions are in the works, yet more is needed for wide-scale implementation. What we do know is that various leading organizations are working daily to enhance traceability and sustainability in the gold industry.
