Metalor cuts ties with small mines over sustainable gold

Metalor is one of the world's biggest gold refineries. Keystone / Sandro Campardo

Swiss gold refinery Metalor Technologies has announced it will no longer deal with artisanal mining operations. The company cites the increasing cost of ensuring that gold is being produced by small mines in compliance with human rights and environmental standards.

MetalorExternal link has come under repeated fire for doing business with gold mines in South America that care neither for their workers or surrounding habitat. Some of the gold being refined has also been linked by NGOs to money laundering.

The company has refuted many of the charges being levelled at it by human rights groups. But it had nevertheless already ceased doing business with artisanal mines in Peru last yearExternal link whilst declaring self-regulated measures to combat abuses in the gold trade. Monday’s announcement also signals the end to its artisanal activities in Colombia.

Pressure groups has complained that Metalor’s due diligence was failing to spot back doors through which “dirty gold” was allegedly reaching the refinery.

“The increasing complexity of the supply chain in this sector makes it increasingly difficult for Metalor to continue its commercial relations with artisanal mining operations,” said Metalor CEO, Antoine de Montmollin, in a statement.

“Metalor regrets this well-considered decision, but we will not compromise on defending a more sustainable value chain in the gold sector.”

‘Skirting the issue’

Mark Pieth, a champion for greater accountability in the Swiss commodities sector, slammed the refinery’s decision. He believes that cutting ties with trouble spots in response to criticism is not the answer because it strips entire communities of their livelihood.

“It’s really skirting the issue because in fact the refineries should take responsibility and they should be helping to clean up rather than just cutting and running,” Pieth, who is publishing a book on gold laundering this month, told swissinfo.ch.

Pieth also points that sourcing gold exclusively from large-scale mining is no guarantee of a problem free supply chain. Large-scale mining has been associated with environmental pollution, as well as with the displacement and expropriation of indigenous communities.

 + Opinion: Shunning artisanal mining – a shortsighted decision 

Hosting four of the world’s major refineries, Switzerland has virtually cornered the market in gold processing. In 2017, the country imported 2,404 tonnes of gold (worth a total of CHF69.6 billion or $69.7 billion) while 1,684 tonnes were exported (CHF66.6 billion).

Last year, the government issued a report of the gold sectorExternal link and said it was working with the industry to improve “sustainability standards”.

If Swiss refineries shun artisanal gold, this will likely be snatched up by refineries in the United Arab Emirates or India that care even less about following good practices, noted Pieth.