Shedding light on the trade in African industrial gold

“Which mines do you source from?” NGOs concerned with gold traceability and responsible business conduct have long asked this question to refineries. So far without much success. Most refineries just ignored it, claiming that confidentiality, competition or security concerns prevent them from answering. SWISSAID’s new research “Out of the Shadows” breaks some of the secrecy. Drawing on reports from mining companies, governments, customs statistics and paid databases, the 60-page study uncovers 142 business relationships between 116 African industrial gold mines and 16 refineries located throughout the world for the period 2015-2023. The scale of this sector is considerable: in 2020, these relationships involved more than 450 tonnes of gold worth over 23 billion Swiss francs.

After having collected publicly available data, the authors contacted each of the refineries – five of which are located in Switzerland – as well as 32 mining companies, one by one, to confront them with the information. While most refineries refused to disclose the names of their suppliers, the mining companies were far more willing to be transparent. “This report certainly highlights the different transparency practices of refineries, but above all it proves that the culture of secrecy maintained by certain refineries is not justified”, summarises Yvan Schulz, co-author of the study.

This report demonstrates that greater transparency is badly needed. Based on multiple sources, SWISSAID found serious problems in the majority of the 125 African gold mines it has identified, including human rights violations, environmental degradation, violence and corruption. In the regions where gold extraction takes place, local populations hardly benefit from the income generated by their subterranean resources. “This is why transparency is so important. It helps to strengthen the responsibility of the actors and the implementation of corrective measures”, argues Marc Ummel, co-author of the report.

“This report certainly highlights the different transparency practices of refineries, but above all it proves that the culture of secrecy maintained by certain refineries is not justified”, summarises Yvan Schulz, co-author of the study.

In their conclusion, the authors call for a strengthening of existing national legislation and industry standards to include the obligation for refineries to disclose the names of all mines from which they source. In Switzerland, SWISSAID has high hopes for the Precious Metals Control Act, which is due to be debated in parliament in 2023. “This law should be aligned with the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict Zones and High Risk Areas. This means that refineries in Switzerland must be subject to mandatory due diligence in terms of human rights and environmental compliance. It must no longer be possible to import dirty gold into Switzerland with impunity”, concludes Marc Ummel.