Switzerland’s gold | DW Documentary

Key Concepts:

• Artisanal and Small-Scale Mining (ASM)
• Gold Refining
• Due Diligence
• Supply Chain Traceability
• Geoforensic Passport
• Conflict Gold
• Mercury Contamination
• Corporate Social Responsibility (CSR)
• Precious Metals Control Act (Switzerland)
• OECD Standard

1. The Problem: Dirty Gold and Switzerland's Role

• Main Point: Switzerland plays a dominant role in global gold refining, processing a significant portion of the world's gold (formerly 70%, now around 50%).
• Key Detail: The four major Swiss refineries are Metalor, Agor Heras, MKS Pomp, and Valkcami.
• Problem: Much of this gold is "dirty," involving child labor, deforestation, mercury emissions, and conflict.
• Quote: Mark P8, a lawyer and anti-corruption expert, states that he expects Switzerland "to strengthen its laws and policy and to have clear standards that would require its refineries not to become complicit and contribute to human rights violations overseas."
• UN Involvement: The United Nations has expressed concerns about insufficiencies in Swiss legislation regarding gold imports.

2. Historical Context: Switzerland's Rise in Gold Refining

• Location: Three of the four major refineries are located in Tino, southern Switzerland, near the Italian border.
• Reasons for Dominance:
  • Political stability (avoidance of war).
  • Strong financial industry and banks.
  • Proximity to Italy, a major jewelry producer.
• Shadier History:
  • The Nazis used neutral Switzerland to melt down gold stolen from national banks and Jewish people during World War II.
  • Switzerland helped apartheid South Africa circumvent UN sanctions, profiting heavily from South Africa's gold production.
  • The four major Swiss banks built their own refineries during this period.

3. Current Issues: Russian Gold and Loopholes in Swiss Law

• Russian Gold: Similar to the apartheid era, Russian gold is entering Switzerland through roundabout ways, with increased imports from Uzbekistan and Kazakhstan since the Ukraine war.
• OECD Standard: Swiss refineries claim to adhere to the OECD standard for due diligence, but the only legal requirement is to indicate the gold's seller.
• Loophole: The Precious Metals Control authority cannot verify the legality of gold if traceability only goes back to one dealer.
• Industry Acknowledgment: Even the Swiss precious metals processors association calls for stricter rules, acknowledging the loophole.
• Legislative Action: In March 2025, the National Council voted in favor of revising the Precious Metals Control Act, which now goes to the Council of States.

4. Refinery Perspectives and Traceability Efforts

• Industry Stance: The Swiss precious metal industry claims to work hard and asserts that precious metal of dubious origin has no place in Switzerland.
• Challenges Acknowledged: Corruption, human rights violations, child labor, and environmental impact are recognized as significant challenges.
• Transparency: Public market pressure has created a need for transparency.
• Refinery Access:
  • Ago Heros and MKS Pomp declined filming requests.
  • Metalor allowed access to its laboratory to showcase the geoforensic passport.
• Geoforensic Passport: Developed with Baba Beck and the University of Lausan, it's a database of rock samples and their metallurgical composition from various mines.
  • It analyzes ingots to compare their signature with the supplier's signature.
  • It is effective for gold from big mines but not for mixed materials.
• Dori: Gold minded in big mines is pre-refined on site. What is then sent to Switzerland for refining is known in the industry as Dori. Dori always contains silver, copper, and all the other metals that can be found in the earth in different quantities.
• Recycled Gold: 85% of the gold that comes into Switzerland has already been melted down. Gold is continuously remelted and refined, making traceability difficult.

5. Valkcami and the Dubai Connection

• Valkcami's Position: Valkcami, the largest refinery in Switzerland, left the Swiss Association of Manufacturers and Traders in Precious Metals.
• Dubai Sourcing: Valkcami is the only major Swiss refinery that still sources gold from Dubai.
• Dubai Concerns: Dubai is known to have both reliable partners and a black market for illegal gold from Africa.
• Valkcami's Justification: Valkcami sources from two approved producers in Dubai with enhanced due diligence, arguing that blocking Dubai entirely wouldn't prevent the flow of gold from there into the market.
• Due Diligence: Valkcami uses a technique similar to the geoforensic passport for gold from big mines and relies on controls for smaller mines, visiting high-risk counterparties at least once per year.
• Recycled Gold Monitoring: Close monitoring of certification bodies, traders, middlemen, and previous refineries is used for recycled gold.

6. Gold Mining in Ghana: Environmental and Social Impacts

• River Pollution: Gold mining is causing significant pollution of rivers in Ghana, impacting communities that rely on them for farming and household activities.
• Industrial Mining (Gold Fields):
  • Operates one of the largest gold mines in Africa.
  • Claims to adhere to high safety standards and renaturalization measures.
  • Invests in infrastructure, education, and health in the region.
  • Faces challenges in meeting community expectations.
• Newmont Mining:
  • Accusations of destroying water bodies and cocoa farms with inadequate compensation.
  • Allegations of using military and police force against communities.
  • Divide-and-rule tactics to weaken community resistance.
  • Lack of transparency in surveying and compensation processes.
• Artisanal and Small-Scale Mining (ASM):
  • Attracts many young men due to limited job opportunities.
  • Uses mercury for gold extraction, causing serious health and environmental consequences.
  • Environmental impacts include water body pollution, abandoned pits, and air pollution from mercury vapor.

7. Solutions and Perspectives

• University of Minds and Technology (Tarqua):
  • Calls for investment in the small-scale mining sector to improve practices.
  • Suggests Swiss involvement to improve standards and learn from each other.
• Commodity Monitor:
  • Offers a mercury-free gold mining machine costing $2-3,000.
  • The machine uses layered sleeves to trap gold particles.
• Gold Trading in Ghana:
  • Sales are often undocumented, making it difficult to trace the gold's origin.
  • Gold is mixed from various sources, further complicating traceability.
• Illegal Gold Flows:
  • A study estimates that over $30 billion worth of gold was smuggled from Africa in 2022.
• Precious Minerals Marketing Company (PMMC):
  • Responsible for registering all gold that legally leaves Ghana.
  • Claims that smuggling is lower than NGO estimates (5-10 tons vs. 20-30 tons).
  • Requires trading licenses and data capture on gold transactions, but enforcement is lacking.
• Corruption:
  • Allegations of corruption among leaders and officials facilitating illegal gold exports and mercury imports.
  • Gold traffickers declare only a portion of the gold being exported, with complicity from officials at the airport.
• Environmental Impact:
  • Mercury levels in water exceed WHO limits, leading to bioaccumulation in the food chain.
  • Turbidity and iron levels are significantly higher than safe limits.

8. The Role of Swiss Legislation and Refineries

• Impact of Swiss Law: Stricter Swiss laws requiring refineries to know the origin of their gold could encourage direct business relations with mines, improving conditions for artisanal miners.
• Potential Refinery Relocation: Refineries might move to countries with less strict laws, but this could benefit mining countries if Swiss refineries maintain higher standards.

9. Synthesis/Conclusion:

The documentary highlights the complex and problematic nature of the global gold supply chain, with Switzerland playing a central role in refining gold from various sources, including those associated with environmental damage, human rights abuses, and illegal activities. While some Swiss refineries are taking steps to improve traceability and due diligence, loopholes in Swiss legislation and the continued sourcing of gold from high-risk areas like Dubai remain significant concerns. The situation in Ghana illustrates the devastating impacts of gold mining on local communities and the environment, emphasizing the need for stricter regulations, responsible mining practices, and greater transparency throughout the gold supply chain. Ultimately, the documentary questions whether changes in Swiss law can effectively address these global challenges and promote a more ethical and sustainable gold industry.