CMC's Position on Recycled GoldMay 04, 2023
Guess what? It is safe to say that if you are reading this, no matter your age since you started making jewelry, you’ve been buying recycled precious metals like gold, silver and platinum (unless you intentionally lead with known origin, newly mined metals). In fact we’ve been buying, using, and recycling materials like gold for centuries, gold is not something you throw away.
Has this reality decreased new mining? No. Has precious metals recycling changed the fact that acid mine drainage still emerges from gold mines old and new? No. Has gold recycling reduced tensions between mining companies and indigenous peoples? No. Has precious metals recycling demand decreased the use of mercury among subsistence artisanal miners? No.
So where are the claims of “eco-friendly”, “doesn’t rely on new mining,” and “conflict-free” coming from?
This is what we want to be true.
It makes sense to turn toward recycled precious metals in response to the impact new mining and mineral processing has on people and the environment, especially when you are asking yourself, “What can I do?” in response to mercury, toxic tailings, and indigenous rights.
So, the question we are asking is whether the response to turn away from mining actually leads to improvement, especially when millions of people depend on mining. Does it?
Let’s dig deeper to unpack these questions:
- Does using recycled gold reduce new mining or have other environmental benefits?
- Are all recycled definitions or standards the same?
- Are some refiners that provide “recycled” gold excelling in other areas that are important such as implementing strict due diligence procedures or reducing greenhouse gas emissions?
- If purchasing “recycled” isn’t reducing new mining, what can I do to improve the impact mining has on people and the environment?
Does using recycled gold reduce new mining or have other environmental benefits?
There is no evidence that demand for recycled gold reduces new mining activity. This is because the driver for mining gold - making money - isn’t going away. Over 80% of gold mined annually is from industrial scale mines or large scale mines and the other 20% from artisanal and small-scale mines. It is still very profitable to be an industrial scale gold miner. If gold mining stops being profitable, then we'll see a switch. That’s it.
In 2018, world gold mine output from the almost 100 countries reporting or estimating production was about 3,310 tons, slightly more than that in 2017. This was the 10th year of increased global production. https://pubs.usgs.gov/myb/vol1/2018/myb1-2018-gold.pdf
Right now demand for recycled gold does not mean that there is more recycled gold available in the market. In fact relative to demand, there’s a shortage. Companies are having difficulty meeting their recycled precious metals targets due to this lack of supply.
So, why isn’t more recycled gold available when over 98% of all the gold ever mined still exists, here, on the earth's surface? Because that gold is owned and the majority, approx. 91,600 tons is in the form of jewelry! If the owners; individuals, retailers, banks, governments, etc. don’t sell, then there isn’t gold in the system that qualifies as “recycled.” Much of the qualifying material available currently is manufacturing scrap (which gets recycled anyway), and bullion. Right now more of these entities are holding their gold rather than selling - for several reasons we won’t go into here.
Despite these two realities: 1) mining = profit and 2) more demand than supply, claims of benefit to people and the planet, “eco-friendly”, “good for the planet”, “decreases new mining” and “conflict-free,” are everywhere.
Asking for and using recycled gold is not what is being challenged here. What is being challenged are beneficial claims. We are calling out what’s really at stake by making these claims - they distract from the real issues and make it seem like there is a correlation where there isn’t one. While claims about the benefits of recycling are being made - indigenous and local land rights are not being respected, water and air are polluted with toxic releases, lack of bonding for future reclamation efforts leave tax payers with clean-up burdens, political lobbying takes advantage of legal loopholes, and most mines require perpetual monitoring even after closure, etc.
We are recommending that as an industry we stop making environmental claims about recycled precious metals.
For those that continue to make environmental claims, we ask you to think again. We encourage the sincere consideration of who is benefitting by making gold recycling an “ethical” choice. As an industry, while gold prices are high and new mining continues, are we building solutions that really help the planet and people who continue to be negatively impacted?
Emphasizing “recycled” gold as a solution to uncomfortable issues faced by the industry is wrong as it does not help people negatively affected by mineral extraction. We’ve always recycled gold. If recycling were the solution, we’d have been successful by now.
Are all recycled definitions or standards the same?
Definitions are standards. They are a way of creating shared understanding, ideally the same understanding across as many people as possible. There are many different “recycled” definitions used across the industry, it is important to find out which one your supplier is using and then to dig into what is actually covered.
We recommend reviewing in detail the definition(s) being used to qualify “recycled” precious metals. Also spend time looking for other source claims so that you can better understand where the supplier’s precious metals are coming from.
If a refiner is offering recycled precious metals, and they have their claim independently verified, you will likely be able to determine if the definition of what qualifies as recycled material meets your expectations.
So, what do you expect? Maybe you expect refined gold to come from pawn shop jewelry? Or perhaps broken and tangled chains from grandma’s jewelry box? Maybe it is gold dental fillings, or e-waste? Do you expect it to contain bars of investment gold? It could be new gold that was manufactured into discs and the scrap gets tossed in the melting pot? All of these possibilities are real.
Getting enough qualifying recycled supply is difficult and we are seeing the deliberate expansion of recycled precious metals definitions to include investment bullion and even precious metals that are newly mined, but not the primary metal being mined, and are called "by-products." Bullion is gold in the form of a financial instrument - the weight and purity mean that it can be cashed in or traded for its material value. While bullion can change owners, it does not match expectations most people have when they imagine, “recycled” precious metals.
At this time recycled gold claims, based on existing and numerous definitions, are misleading to the consumer, and we don't recommend using them.
Are some refiners that provide “recycled” gold excelling in other areas that are important such as implementing strict due diligence procedures or reducing greenhouse gas emissions?
We recognize that there are clear markets for "recycled" gold, silver and other metals - well known jewelry and tech companies, and others have helped to create these markets by announcing 100% recycled jewelry and increased recycled sourcing targets in their sustainability reports. While this does help incentivize refineries to know and prove the origin of their precious metals inputs (which is essential), it does not change new mining activity at all and has even led to newly mined gold being transformed into jewelry (sometimes at the mine site) to be sold as recycled. Gold transformed and sold this way can be a process to exploit the demand for recycled content, as a cover for money laundering or sale of illicit material.
Even if choosing recycled isn't reducing new mining, it does make sense to seek out refiners with careful checks and balances in place. You can ask what due diligence steps they take to be certain about the origin of their precious metals. Sometimes there is a correlation between refiners that offer 3rd-party verified recycled precious metals and those that have published, detailed, and certified chain of custody practices in place.
Sometimes these refiners are also actively working to reduce their climate warming greenhouse gas emissions. Due diligence in sourcing and active greenhouse gas reductions are two practices that do have a positive impact.
Photo courtesy of Fairmined ©
Some areas we are particularly concerned about:
- Claims that are tied to GHG emissions reductions.
- This is because the current dataset is very limited and this limited data set is being used over and over again proliferating impact reports that aren't accurate. This could be improved with more data and we are looking for companies and academic institutions to help with this, but as it is right now these claims are misleading.
- Claims that using recycled gold reduces new mining.
- There is no proof of this.
- The Responsible Jewelry Council's proposal to allow by-products from mining to be considered "recycled" - as was proposed in the latest update to the Chain of Custody Standard.
- This would be newly mined material, it is not recycled, not by any definition. (See p. 9)
At this time, we're seeing certain industry actors coming together to work to find alignment on the definition of recycled. One part of this conversation is the idea that there should be a globally used definition that differentiates between post-consumer recycled and pre-consumer recycled - and specifically do not include bullion as "post-consumer" source.
Another idea being discussed, as proposed by the Precious Metals Impact Forum, is using the terms "recycled" and "reprocessed" to differentiate between products that have very little recoverable gold (e.g. e-waste - less than 2% gold in the alloy) and products that contain more than 2% gold (e.g. jewelry, dental scrap, bullion) where the gold was recovered, refined, or just melted and reused (reprocessed).
We recognize that this is difficult, but if the purpose is for the recycling of gold to do something, contribute to something positive, not just do what it has always done, then we have to think about and act on this differently.
Should companies use gold that has been mined before today? Of course! But this doesn't deserve any bonus points.
An impetus for this post is the pending update to the FTC's green guides. These U.S. Federal Trade Commission Green Guides provide marketing guidelines/rules around environmental claims and beneficial claims. The words "recycled," "eco-friendly" and "green" are some examples. Another is "recyclable." Jewelry made from precious metals is very recyclable. Stones can easily be removed and the metal melted and refined. But there isn't a consumer-wide take-back program for privately owned items. Yes, there are pawn shops, jewelry shops, gold buying entities, and some refiners do buy directly from consumers, but the "recyclable" concept is tricky for jewelry for another reason: the purchase price of the jewelry and the buy-back price are vastly different, making for difficult conversations with consumers.
If purchasing “recycled” precious metals isn’t reducing new mining, what can I do to improve the impact mining has on people and the environment?
- Get active and informed
- Support the formalization of artisanal and small-scale miners and the improvement of their practices
- Purchase gold and silver from artisanal miners actively working to improve practices, such as eliminating mercury, improving site safety, creating equal employment opportunities for women, etc. Mining organizations participating in such improvements can be found through Fairmined.org and others. Schedule a call to learn more.
- Honor and respect indigenous land rights by asking your suppliers where their precious metals originate and seek out suppliers involved in advocating for indigenous rights.
- Ensure impacted communities are provided with information, skills and resources to review new mining proposals with consent resting with those indigenous and local to the region. Check out the Initiative for Responsible Mining Assurance to learn more.
- Protect and support people from the lasting impacts of industrial-scale mining by understanding your country's mine closure and abandoned mines clean-up laws.
- Advocate for a drawn down of new industrial-scale mining efforts.
- Closed loop / circular recycling programs have a place, but these have to be tight, based on a brands consumer relationships as sources, etc.
- Use precious metals already in your customer's possession.
- The list goes on...
Every item on this list requires team work, collaboration, education, care, a willingness to lean in, rather than turn away. We have every right to continue asking for accountability and transparency and progress toward a more equitable and safe world.
Keep asking questions!
[As the industry evolves, our understanding and position about it will evolve with it. Blog post content as of 5/4/2023]
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