Patrick Schein, member of the Alliance for Responsible Mining´s Board of Directors
The use of recycled materials is one way for industries to assert their commitment to reduce their environmental impact. By incorporating such materials into their supply chains, manufacturers can claim a lower greenhouse gas (GHG) emission impact, a reduction of our planet’s resources’ extraction and, in some cases, a product composition that does not fuel human rights or environmental abuses.
For more than a decade the jewellery industry has been promoting the use of recycled gold when referencing a responsible chain of custody (CoC) and a statement of provenance or traceability. So is this the best practice? If I use exclusively recycled gold for my jewels, am I responsible ? Let’s try to answer these questions.
First of all, let’s have a closer look at the recycling of gold. Gold may be the most consistently recycled of all materials. Since its discovery, only 2% of all the gold mined is unaccounted for, either having been dumped or lost track of. The reason for this extraordinary statistic does not lie in the environmental consciousness of people but rather in the economic value of gold. Gold is sufficiently valuable to have been consistently recycled since its discovery.
The context of recycling gold
Coming to numbers, since its discovery in Thrace (currently in Southeast Europe) 6,000 years ago up to 2017, 190,400 tonnes of gold have been mined. This means that the above-the-ground stocks represent 60 years of current annual mining production. Knowing that the majority of this gold (69%) is very easily recyclable because it is in the hands of individuals and in a high-grade form (privately owned investment gold: 41,300 tonnes, and jewellery: 90,200 tonnes)1 it means that newly annual mined gold represents less than 3% of this easily acquirable or ‘near-market’ recyclable gold stocks.
Compared to 2,213 tonnes of gold that went into jewellery fabrication in 2017, recycling of old fabricated gold amounted to 1,210 tonnes. This means that today, by directing the current recycled gold to jewellery fabrication, 55% of all jewels globally could be made of recycled gold with little effort.
When considering geography, it is interesting to note that jewellery in Europe and North America does not need to use newly mined gold. In 2017 in Europe, 261 tonnes of gold went into jewellery fabrication while 326 tonnes of gold were recycled. In North America 83 tonnes of gold were used for jewellery fabrication and 86 tonnes1 recycled. So on those two continents, the cradle of ethical jewellers, above the ground “mines” cover all their jewellery fabrication needs. This means that using recycled gold is effortless and the best evidence of this is the level of the premium of recycled gold. Today recycled gold in Europe sells for a premium of 50 USD per kilogram for a gold value of almost 50,000 USD. So where is the effort ? Where is the commitment ?
Jewellers´ arguments for using recycled gold
By using recycled gold, jewellers claim that it will help diminish the negative impacts of dirty gold by reducing the demand for the newly mined metal. This is a deception because gold is money ! Gold has always played an important role in the international monetary system and is accepted globally. Gold can be converted in cash almost instantly even when the banking system is inoperative. So gold is not mined for jewellery, additionally we have seen that there is enough stocks to cover fabrication. Gold is mined to generate money, nothing else! Using recycled gold in the jewellery industry will not curb its extraction. Only the price of gold (which depends much more on the world’s insecurity than on jewellery demand) and the mining reserves can vary mining intensity.
Generally, the argument used to incorporate recycled gold is that gold mining is one of the most environmentally destructive types of mining and millions of gold miners earn low wages in dangerous working conditions. In industrial gold mining (85% of the newly mined gold), environmental impacts are massive. One only has to browse the reports from the major gold mines to realise that the extraction of 20 grams of gold generates 40 metric tonnes of mining waste and over 520 kg of GHG and consumes almost 8 kg of cyanide.
On the artisanal and small-scale mining (ASM) side (15% of the newly mined gold), the mercury issue is problematic and massive also. It is estimated that for one kilogram of ASM gold, 3 kilograms of mercury are used. So at first glance, recycled gold is the only solution for ethical jewellers to disassociate from mining’s dirty image. But using just recycled gold, which originally was mined, is quite selfish in fact because it does not help mining to become more responsible.
Recycling is also not perfect as the main standards adopted by the jewellery industry include fabrication scraps as eligible material into recycled gold. As some fabrications, particularly in the luxury segment, can generate more than 50% scrap, this means that freshly mined gold can be introduced as recycled products just a few weeks after its extraction. I strongly believe that labelling jewellery made with recycled gold should be limited to end-of-life consumer products and exclude fabrication scraps.
This dirty image of the mining sector should undoubtedly lead to calls for the banning of gold mining in favour of simply recycling existing stocks, which are already more than sufficient to meet our needs. But gold mining also drives development and offers a unique opportunity to generate income for a large number of people in need.
Buying certified gold from responsible artisanal and small-scale mining
Mining is justified in the case of artisanal gold mining which generates directly a living for around 100 million people worldwide while providing only 15% of gold mining output. One kilogram of ASM gold provides jobs for 50 miners for one year (in industrial mining one worker can produce 7 kilograms in one year or a social intensity ratio of 1:350 between the two sub-sectors!). So if ASM extraction is controlled environmentally, responsible and certified, like the Fairmined label guarantees, jewellers can use this certified ASM gold claiming a high job generation impact, a strong driver for development and a source of origin.
This certified ASM gold is a development tool for millions (just remember California’s Gold rush 150 years ago) and it has to be preferred to recycled as it brings progress to people who need it drastically. Of course this gold is limited in quantity for the moment and is significantly more expensive. This extra cost is due to the fact that it secures a minimum decent price for the miner, a premium for the mining organisation and needs great effort from all the supply chain actors to create a dedicated supply chain and adapt processes and dedicated logistics for the available volumes.
If jewellers do not make the effort to use this gold and simply keep promoting recycled gold as the only ethical solution, then, by not contributing to this ASM sector that needs market incentives to become the norm, I am convinced that the exclusive recycled gold choice will one day come to a dead end for not addressing the situation and just ignoring mining that will not stop.
Using only recycled gold is in fact quite unethical as it does not bring progress and development to a sector that will not disappear and needs the support of the market to be more responsible. Additionally, contrary to certified ASM gold, recycled gold is not traced back to the point of extraction meaning that nothing prevents dirty mined gold ending up as “recycled” gold and quite quickly as seen with the case of fabrication scraps.
The solution for me: use as much responsible ASM gold and top up the missing volumes with recycled gold. Recycled gold is ‘neutral gold’ that makes sense to use as a top-up to responsible ASM gold.
So, yes, I am a responsible jeweller if I use recycled gold to the conditions that A- I exclude from this gold the fabrication scrap and, B- I use it as a neutral impact gold once I have incorporated in my supply chain a maximum of responsible ASM Gold.
 ‘GFMS GOLD SURVEY 2018’ Thomson Reuters, May 2018
 2017 SUSTAINABILITY REPORT – BEYOND THE MINE’ Newmont Mining 2018
Patrick Schein, trader and refiner of gold, and ASM gold supply chain expert.
For more information: patrickschein.com/uk