Responsible gold sourcing from artisanal and small-scale mining

Public and political discussions increasingly acknowledge the role of responsible supply chains in order to support decent working conditions, protect the environment and apply adequate due diligence. In recent years, companies have demonstrated that through applying supply chain due diligence they may act as partners contributing to improved conditions of production of certain raw materials. Establishing certification schemes and institutionalizing supply chain management in line with the OECD Guidance serves to strengthen cooperation between producers and buyers; compliance with international minimum standards may be demonstrated in a credible way. Gold forms one of the most important products of the global mining sector. About 10% of global gold mine production originates from artisanal and small-scale mining. Artisanal and small-scale mining represents an important livelihood base for the local population: 10-20 million small-scale miners, and their families, directly depend on gold mining. However, this type of mining is frequently associated with difficult working conditions, child labor, and environmental risks. In addition, gold supply chains associated with artisanal and small-scale mining are characterized by higher risks of conflict financing or smuggling. Formalizing the artisanal mining sector and the associated supply chains, therefore, represents an important responsibility in the context of global gold supply chains and value creation. Gold refiners represent a central leverage point in terms of supporting due diligence and responsible practice in gold supply chains. Gold refiners based in Germany are associated with complex upstream supply chains within the EU and, partly, globally. Currently, these refiners are not purchasing significant quantities of gold from artisanal and small-scale mining sources. The present technical report provides a basic overview on the general sourcing options for German gold refiners with regards to artisanal and small-scale mining gold. To this end, the report explores different criteria such as the current gold production through artisanal and small-scale mining, logistical supply chain requirements as well as relevant international due diligence and sustainability standards. Responsible sourcing of gold from artisanal and small-scale mining would appear to be a feasible step for some German refiners. A sourcing scenario in compliance with international and industry standards and certification schemes would seem feasible to develop, provided that adequate risk management is implemented. In order to establish a long-term successful gold sourcing relationship, appropriate partners needed to be selected and adequately incentivized. The report illustrates criteria and challenges for this process. The report further includes an analysis of 12 countries where artisanal and small-scale gold mining is common. The national framework for responsible gold sourcing is evaluated for each country. Overall, according to this analysis, it would seem feasible to establish a re sponsible supply chain in several of the investigated countries. As a next step, the report suggests evaluating the situation on the ground in more detail, with the aim of outlining more concrete gold supply chain sourcing scenarios.