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Swiss NGO unmasks African industrial gold trade

Switzerland’s refineries are top recipients of gold mined at industrial sites in Africa, but most remain deliberately opaque about their sourcing, according to Swissaid. The Swiss non-governmental organisation published on Thursday a report mapping over 100 business relationships between African industrial gold mines and refineries around the world.

“Without transparency, it is impossible to improve the situation of workers and local populations living in the vicinity of mines,” said Swissaid in a statement. The research is part of long-running efforts in Switzerland and abroad to hold corporations accountable for environmental damage and human rights violations linked to mining.

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Gold from over a dozen African nations ends up in Switzerland. The continent’s largest three gold producers are Ghana, South Africa and Sudan. In 2020, Switzerland’s five refineries accredited with the London Bullion Market Association (LBMA) imported over 177 tonnes of gold with a commercial value of CHF9 billion ($9.8 billion) from African industrial mines, according to the NGO.

Swiss refineries have traditionally declined to disclose the identity of their suppliers, or “clients”. They typically cite trade secrecy and present confidentiality and competition arguments. The NGO calls that opacity “puzzling” and “unjustified”. It points out that the data in many cases has been provided by partnering mining companies or can be found in the public domain, as well as specialised databases.

Aversion to responsibility

“We understand that the real reason for not disclosing these relationships for these refineries is they don’t want to be associated with the problems in the mines,” says Marc Ummel, co-author of the report that took two years of research. “When you confirm where you source your gold… it’s a kind of responsibility. Without it, you cannot have a frank discussion about where the problems are and what needs to be done to address them.”

Switzerland imports more than half of the world’s gold each year. In all, two-thirds of the 142 business ties identified by Swissaid concerned the Switzerland-based refineries Metalor and MKS PAMP Group or the Rand Refinery in South Africa, which supplies gold to Swiss banks. The LBMA only publishes the list of countries of gold processed by its refineries in an aggregated fashion.

Metalor has the largest, confirmed footprint in Africa and PX Precinox the smallest. Swissaid identified 26 industrial mines whose gold is being or has been recently refined by Metalor, an international group with headquarters in Neuchatel, 17 subsidiaries, including five refineries. The NGO says the refinery engaged with its requests and shared data. PX Precinox, also based in Neuchatel, was reportedly only willing to share that it sources gold from a single mine in Senegal but not its annual refining capacity.

Swissaid identified 21 African mine sites whose gold is being refined or has been recently refined by MKS Pamp; and another 10 by Argor Heraeus. MKS Pamp neither confirmed nor denied the data, citing contractual confidentiality, competition and security reasons, according to the NGO report. Argor Heraeus cited commercial secrecy but told the NGO African gold supplies account for only one percent of the gold it processes.

Swissaid reported no luck getting its information confirmed by Valcambi. This LBMA refinery based in canton Ticino has an annual refining capacity of 1,200 tonnes of gold. It has filed criminal and civil proceedings against the NGO and one of its researchers following a 2020 report on the gold trade between the United Arab Emirates and Switzerland. Valcambi told SWI swissinfo.ch it does not comment on client relationships unless it has explicit permission from the client to do so due to data privacy legal considerations.

Varying degrees of transparency

“With the Swiss refineries, if you have a Metalor that confirms 26 relationships, why cannot MKS and Argor-Heraeus do the same?” asks Ummel. “If one of them can do this, the others have to do this. At the Swiss level, this shows again that we need a strong due diligence in law, which is not in place.” Switzerland’s customs legislation – including its Precious Metals Control Ordinance – is due to be revised this year.

Swissaid said it had identified human rights violations and environmental problems at the majority of the 125 mine sites analysed. On the environmental front, the list includes air, soil and water pollution – all of which have health impacts for local populations. The report also points to injuries and fatalities at mine sites, land expropriation and forced displacement, wage issues, corruption and tax fraud, sexual violence and murder.

“It is important that the refineries list the mines they source from, the problems that have been identified and the measures taken to address them,” says Ummel. “They need to be proactive, not just wait for something bad to happen.” Sourced; swissinfo.ch

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