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Metalor Technologies’ Commitment to Responsible Sourcing in Precious Metals Industry

By Jonathan J. Jodry, Business Development Director, Metalor Technologies

The enactment of the Dodd-Frank Act in 2010, a United States federal law requiring manufacturers to audit their supply chains to evaluate the risk of using conflict minerals, and the OECD’s Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas of 2011 were pioneering efforts in highlighting the importance of responsible sourcing of precious metals. Over time, this has become a top priority for the industry, with several regulatory initiatives introduced, including the UK and Australia Modern Slavery Acts, California Transparency in Supply Chains Act, Transparency Act in Norway, and more recently, EU and Swiss regulations.

In response, several organizations have introduced certifications to ensure that their members are following responsible sourcing principles, including the LBMA (through its Responsible Gold and Silver Guidance), the LPPM (through its Platinum and Palladium Responsible Sourcing), the Responsible Jewellery Council (RJC), and the Responsible Business Alliance (RBA).

Metalor Technologies, a leading precious metals refiner with five LBMA-accredited refineries worldwide (China, Hong Kong, Singapore, Switzerland, and the United States), has been an early adopter of responsible sourcing initiatives. However, Metalor recognized that existing rules and initiatives could be improved to offer more transparency and security to its customers. To address this, Metalor has developed a unique sourcing, traceability, and security ecosystem (see Figure 1) based on the following principles:

  • No sourcing from mine collectors, and sourcing from ASM (artisanal or small-scale mine) only when they are integrated into a robust, government-backed framework like Swiss Better Gold.
  • Confirmation of the origin of the dorés received through a producer-independent, scientifically validated process.
  • Security features on investment products that are compatible with both banks and individual customers’ needs.

Although many initiatives have been developed to ensure the provenance of mined gold, they all suffer from a fundamental flaw: they rely on doré producers to perform the initial security step, such as registration on a blockchain, placement in a security container, or marking the bars with visible or forensic features. Unfortunately, nothing prevents a dishonest supplier from adding illegal metal to the dorés at the source, undermining the integrity of the entire supply chain.

Despite having the highest level of trust for its LSM (large scale mining) customers, Metalor recognises the importance of mitigating even the slightest risk of illegal manipulation and instilling confidence in its customers. To achieve this, Metalor worked with Dr Barbara Beck from the University of Lausanne in Switzerland to develop a scientific tool called the Geoforensic Passport. This project, which was co-financed by Swiss governmental innovation fund InnoSuisse and Metalor, took more than five years to complete.

Figure 1: Metalor’s sourcing, traceability and security ecosystem

The Geoforensic Passport uses advanced yet inexpensive X-ray fluorescence analyses to create a unique signature for each supplier in up to 15 dimensions (only three dimensions can be represented in Figure 2). This signature is then used to validate the provenance of each ingot in every shipment that arrives at Metalor’s refineries. The process is fully integrated into Metalor’s receiving flows, ensuring that customers can have absolute confidence in the origin of their gold.

The Geoforensic Passport has been validated through a systematic, scientific approach. No part of it has been patented, and any interested party can use it.

Figure 2: Example of a Geoforensic Passport

Metalor Technologies places a strong emphasis on responsible sourcing of recycled gold. We support the highest standard currently available, the Chain-of-Custody (CoC) from the Responsible Jewellery Council (RJC). Many of our customers who request recycled gold rely on this standard, which excludes investment gold (gold bars and coins).

Our refineries are fully integrated with SAP, enabling us to trace the origin of received lots throughout the refining process until the final products are manufactured, including investment products. We offer segregated refining based on various criteria, such as type (exclusively using recycled CoC gold), area of origin (Swiss Better Gold from Peru), or even a specific mine, depending on our customers’ needs.

To ensure full compliance with existing standards, all of our refineries undergo annual audits for multiple certifications, including but not limited to ISO 9001, ISO 14001, ISO 45001, LBMA, LPPM, and RJC.

Metalor casts and mints gold products are renowned for their quality and have excellent reputation in numerous markets. To prevent counterfeiting, we have introduced various security features on our bars, including both visible and hidden features. Our gold kilobars bear the BullionProtect security ink, which is one of the most visible security (Figure 1). It was developed specifically for our market by SICPA, a Swiss company that is a world leader in passport and banknote inks.

The BullionProtect ink enables batch validation using specific, inexpensive filters or lamps, and authentication of hundreds of bars can be performed in less than a minute, making it the best security available for vaults. Credit card-shaped masks with the appropriate filters are also available for immediate validation (see Figure 3). They reveal different colors and designs, similar to what is found in passports. This solution was recognised by the LBMA as one of the few acceptable security features for gold bars, and it is currently tested or used by other LBMA-accredited refineries around the globe.

To allow individual gold kilobar owners to access specific information on their bars, our kilobars have a unique Datamatrix code in the BullionProtect. This code can be scanned using the iOS Metalor Check application (an Android version will be released soon). The application is completely free, and details such as the manufacturing date and location, purity, and origin of the gold (for segregated refining) can be obtained using it (see Figure 4). This tool also allows confirming that the gold bar meets specific purity requirements, like for the Shanghai Gold Exchange (SGE).

 

With more than 500,000 bars bearing the BullionProtect security feature circulating in the market, Metalor has demonstrated not only the robustness of the system but also its added value for vaults and individual customers alike.

JONATHAN J. JODRY is the Business Development Director for Metalor Technologies, based in Tokyo. With over a decade of experience at the company, he has held positions including Head of Laboratories and Head of New Business Development. Jonathan is deeply involved in the precious metals trade, chairing the ISO/TC 174, serving on the IPMI Awards Committee, and sitting on the Board of the IPMI Foundation. He holds a PhD from the University of Geneva and two Executive MBAs from London Business School and Columbia University of New York.

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