Published: 27 October 2021

Published: 27 October 2021

Responsible and Traceable Gold Supply Chains: from the Mine to the Market. The Experience of the Swiss Better Gold

The challenges artisanal and small gold miners (ASMs) are up against limit their ability to access global gold markets. They face informality, the influence of armed actors, production in conflict regions, poverty and lack of basic infrastructure, child labor, health and safety, poor working conditions, and non-compliance with environmental management regulations that impede their ability to compete with large scale productions and global gold buyers.

Small-scale mining, which refers to mining activities that use simple methods to extract minerals with rudimentary tools or equipment, is becoming increasingly relevant for governments, market brands, and financial institutions globally, generating income for more than 30 million workers and supporting 100 to 150 million people worldwide (Alliance for Responsible Mining, 2015).

Often the main source of livelihood for the communities involved, artisanal and small-scale gold mining operations are carried out in difficult and dangerous conditions. Beyond the physical risks, communities that depend on mining for a living also face precarious financial challenges, namely, vulnerability to fluctuations in the price of gold and unfavorable sales conditions set by intermediaries.

In this context and out of a desire to improve the situation of subsistence, small and medium-scale mining, the Swiss Responsible Gold Initiative was established in 2013 as a public-private partnership between the Swiss Better Gold Association and the Swiss State Secretariat for Economic Affairs (SECO). The initiative takes advantage of the importance of the Swiss gold market, home to four of the largest gold refineries and 60% of the world’s gold processing capacity.

The Swiss Better Gold Association takes the following approach:

  • Accepts only metal originating from accredited responsible ASMs sources
  • Achieve shorter supply chains and facilitate direct exports for ASMs gold producers
  • Mobilize stakeholders along the supply chain to establish and improve their efficiency
  • Promote environmental and social improvements locally through the Better Gold Fund (BGF)
  • Identify member-funded projects that enable faster ASM improvements

The Initiative is currently working in Bolivia, Colombia, and Peru within the framework of official bilateral agreements between Switzerland and the governments of the three countries. One of its main objectives is to contribute to the improvement of mining conditions and build responsible gold supply chains, actively contributing to the Sustainable Development Goals (SDGs).

The Initiative has established a Sourcing Policy, like an industry scheme, that sets up 15 compliance criteria around the environment, labor, human rights local legal framework compliance. To be part of the initiative and benefit from access to the market and technical support, the miners must comply with the criteria. A Second Party Verification is mandated to assure compliance.

Between 2017 and 2021, in partnership with Projekt Consult, a German consulting firm specialized in mining, ELEVATE was the local implementation partner of Phase II of the Initiative. A new project was recently approved to implement a third phase running through 2025.

Our team also supports the development of effective, sustainable, and responsible supply chains, supporting miners to achieve the standards established by the sourcing policy of the Swiss Better Gold Association. ELEVATE’s on-the-ground team provides support to these small-scale gold miners through engaging in capacity-building projects, and technical assistance to improve operational and organizational practices.

ELEVATE is empowering miners to sell their gold production to international buyers in Switzerland, who value responsibly produced gold, and pay a financial incentive equivalent to US$ 1 for every gram of responsible gold sourced. These resources are accumulated in the Responsible Gold Fund, allowing the miners to invest in technical, social, and environmental development projects in the field. ELEVATE team also gives support for the design, monitoring, and evaluations of the investment projects funded by the Fund.

Gold miners, Sociedad Minera La Subasta S.A.S

Through the ELEVATE team, the Swiss Better Gold supports the implementation of programs and priorities of the national government, which aim to improve conditions in the gold sector through constant engagement and dialogue on key elements such as formalization, environmental impact, financial inclusion, traceability, and commercialization and exportation.

SBGA Initiative: Colombia

Since 2017, the volume of Colombian responsible gold exports has grown exponentially – zero to more than 1 Ton in 2021, guaranteeing about 1,500 direct jobs, through the support of 25 mining organizations in 5 departments of the country. Also, more than 1,200 subsistence, small and medium-scale miners have benefited by gaining access to markets demanding responsible gold, while receiving support and advice on best practices.

More than 900 artisanal miners in the Colombian Pacific region, belonging to Afro-descendant communities, have access to the formal financial sector and are banking for the first time, demonstrating that they are a promising customer segment for financial institutions and Swiss buyers.

In the future, the Swiss Better Gold Initiative is looking towards emphasizing climate change, and the environmental impact of gold mining. The planned approach will include an in-depth analysis of the impact, i.e. the greenhouse gas footprint of gold ASM, the development of a tool for rapid analysis of that footprint, and the inclusion of a new “climate change” criterion within the Swiss Better Gold Association sourcing policy.

These blogs are written by ELEVATE staff members or associates and the views and opinions expressed are not necessarily those of ELEVATE.


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