Tracing the path that gold takes from mine to market is notoriously difficult. The precious metal is mined around the world, but unless it remains separated throughout its journey through the global supply chain – especially at the refining stage, where batches are traditionally mixed – there is no has no way of distinguishing the origins of a gold bar or the gold from ball to ball.
This explains both gold’s millennial history as a form of international currency – and what many say is its most obvious modern weakness.
As gold mining practices come under increasing scrutiny for their potential links to child labor, mercury pollution and other human rights abuses man and the environment, the voices calling for full traceability in the gold supply chain are growing louder.
The calls took on new urgency in light of new concerns that the Russian government could use “gold supply chains as a tool to evade sanctions and further subsidize its military aggression against Ukraine”, as a letter open to the jewelry industry from the Global Gold Transparency Initiative, an advocacy group, said recently.
Charlie and Dan Betts, brothers from Birmingham, England, representing the ninth generation of their family in the gold smelting and refining business – in 1760 Alexander Betts founded what is now Betts Refining in the city’s jewelry district – believe they have a solution to the gold traceability problem. Single Mine Origin, or SMO, Gold is an industry standard they created in 2018 to connect the dots between large-scale gold mining and the jewelry market. (The Fairtrade and Fairmined initiatives address artisanal and small-scale mining, but SMO Gold is offered as the only such effort in medium- and large-scale gold mining.)
“What we’re doing is trying to get jewelers across the spectrum to engage with provenance,” Charlie Betts said in a recent video call. “Ninety percent of the gold in the market, people can’t really tell where that gold came from.”
SMO Gold mandates chain-of-custody protocols, and so far two large-scale mines in Africa have signed up: the Yanfolila mine in southern Mali, owned and operated by Hummingbird Resources, which Dan Betts founded in 2005; and the Ity mine in Côte d’Ivoire, owned and operated by Endeavor Mining, one of Africa’s largest gold producers.
Together the mines produce over 300,000 ounces of gold per year, which could be classified as SMO Gold. And an additional Hummingbird mine in Guinea is under construction and expected to start producing SMO Gold by mid-2023.
(In terms of global stocks, however, mining adds at least 80 million ounces of gold to the surface gold stock each year, according to the World Gold Council, a London-based industry body of leading gold miners of the world.)
The SMO label is not limited to jewelry. The Betts said they have enough gold supply to extend the standard to gold bullion products and are eager to see the SMO standard used by other mining companies, including those supplying the electronics and Of the industry.
“This is an opportunity – it sounds pretty grand – to mark and reorient mining to show that it can be impactful and positive,” Dan Betts said in a follow-up video call earlier this month. this.
Now, when a batch of SMO gold leaves the mine, it goes to a refinery in Switzerland that has been accredited by the London Bullion Market Association, an international trade association that administers the Good Delivery List, a standard qualifying the supply from a company. A third-party inspection and certification company called Bureau Veritas, headquartered in Neuilly-sur-Seine, France, is responsible for verifying that SMO Gold remains separate from other batches of gold at the refining stage.
From there, the gold is either shipped to an international smelter or sent to Betts’ refinery in Buxton, England, where jewelers can purchase it at about the same price as Betts’ non-SMO gold. (The brothers said that by taking advantage of economies of scale, they didn’t have to charge a premium.)
“With Hummingbird, we monitor the entire supply chain, from hole in the ground to ring finger,” said Charlie Betts.
Since its introduction in January 2018, SMO has gained a small but growing following in the UK, where a number of high-end jewelers – including Stephen Webster, Emefa Cole, Shaun Leane and Brazilian designer Fernando Jorge – have embraced it. as a way to provide additional reassurance to socially conscious customers, who can receive a QR code that gives them a direct link to the source of the metal.
“The most prestigious ring I’ve ever designed – the engagement ring I made for Machine Gun Kelly and Megan Fox – is made of single-origin gold,” Mr Webster said during a recent phone call.
The 18k white gold ring, a two-stone design featuring a pear-shaped Muzo Colombian emerald and pear-shaped old-cut diamond in a so-called “you and me” setting, hit the headlines when the American rapper, whose real name is Colson Baker, proposed to Ms. Fox with her in January.
Mr Webster said he didn’t want to pretend gold traceability was “getting a lot of excitement”, but was sharing the information because responsible sourcing was an important aspect of his jewelry business.
SMO Gold’s first jewelery supporter was Boodles, the 224-year-old Liverpool-based jeweler with nine stores across England and one in Dublin. Jody Wainwright, director of Boodles – his father, Nicholas Wainwright, is chairman – said the company started using SMO Gold in 2019, after receiving a letter from Human Rights Watch, an advocacy group which published a report in 2018 evaluating 13 top jewelry brands. , including Boodles, on how they manage human rights risks in their supply chains.
“They disclosed to the trade that they were too negligent to do due diligence on their suppliers,” Mr Wainwright said in a recent phone call.
He knew SMO Gold because the Wainwrights and Betts share a long history. “My grandfather used to buy gold from their grandfather,” Mr Wainwright said. “And I was at school with Dan Betts.”
As of April 2021, all Boodles gold jewelry, including chains and wedding rings, is SMO Gold. “What’s really exciting is that we can name the mine,” Mr Wainwright said. “So you know what’s going on there, you can see pictures, you can visit it.”
But does traceability alone guarantee that the gold was mined responsibly?
The Betts brothers recognize that gold mining is, by definition, unsustainable. “It’s a finite resource and then it disappears,” Dan Betts said. “We are trying to prove that we can develop these resources in a way that is responsible, not only for governments, but also for communities in remote places where the mines are.”
He cited community development programs supported by Hummingbird – in areas such as education, health, water and sanitation – and said the company was actively involved in teaching local people. “skills that are transferable, so after the mine is gone, people are equipped.” to find another job.
As a member of the World Gold Council, Hummingbird is required to implement the Responsible Gold Mining Principles that the council established in 2019 as a framework for what constitutes responsible gold mining.
Terry Heymann, the council’s chief financial officer, said the council had given its members three years to implement the principles, and that “anyone who wants to comply must demonstrate it to an ‘external assurance provider'”, a term that the board preferred “auditor” to avoid confusion with a financial audit.
“It’s a lot about promoting transparency,” Heymann said in a recent phone call.
Responsible mining advocates, however, have criticized the council’s principles as not requiring enough transparency.
Aimee Boulanger, executive director of the Initiative for Responsible Mining Assurance — a nonprofit organization that provides independent third-party verification and certification for all mined materials, with a focus on industrial-scale mining — said said that as a body made up of mining companies, the council is not “a reliable and independent measure of review”.
Ms. Boulanger contrasted the board’s principles with her organization’s standard, which she called the most comprehensive and rigorous available. She said that when the initiative audited a mine, anyone – from community members to Human Rights Watch employees – could speak directly to the auditors.
“You can say, ‘Go look at the creek east of the mine because it’s flowing orange,'” Ms. Boulanger, who is based in the Seattle area, said on a recent call. “The listeners will examine it. They will be on site for a week and will meet with employees outside the company.
“Increasingly, the world expects transparency and greater authenticity from accounting,” she said. “It’s time for companies to come out and be more open, rather than saying, ‘Trust me’.”
Heymann said the main difference between the initiative standard and the council’s principles is that the latter are realistic. “We wouldn’t have had the full support of our members if we hadn’t put in place a standard that stands up to scrutiny, but is also achievable for mining companies,” he said.
So what does all of this mean for SMO Gold? Christina T. Miller, a College Corner, Ohio-based sustainable jewelry consultant and frequent collaborator with the initiative and other responsible mining groups, said SMO was a step in the right direction, especially for high-cut jewelers. average looking for a steady supply of gold.
“Being able to laser target the specific point of origin is really important,” she said, “because if you don’t know where it’s coming from, you can’t commit to improving.
“But don’t stop there,” she added. “Really get to know the real practices.”