Mongol Bank launches ecological gold export project
The central bank has launched a project to support the export of ecological gold in an effort to encourage ethical artisanal mining and to supplement the foreign exchange reserves.
Ecological gold is gold that was responsibly sourced and mined with consideration to humanitarian, ecological and environmental factors. In addition, ecological gold does not use any toxic chemicals in processing the gold. Fairmined is an assurance label that certifies gold from responsible artisanal and small-scale mining organizations who meet world leading standards for responsible practices.
Fairmined Certification was created by the Alliance for Responsible Mining, a non-profit organization. Fairmined Gold acts as an assurance for miners, the industry and consumers. The gold can be traced from mine to market.
The mining organizations producing Fairmined ecological gold are currently the only artisanal mining organizations in the world with a third-party certified chemical-free gold production. The Mongolian NGO association of artisanal miners, XAMODX, was the first Asian Origination to ever obtain Fairmined Certification thanks to the support of Sustainable Artisanal Mining project. They are the only producer of Fairmined ecological gold, a special Fairmined label for gold produced without the use of mercury or cyanide.
Part of Mongolia’s Gold to the Treasury Fund initiative to increase gold sales to Mongol Bank, the ecological gold program seeks to support those practicing ethical and responsible gold mining practices. Ecological gold is certified annually by an independent auditor. Those who are certified as producing ecological gold are eligible to receive a 4,000 to 6,000 USD premium per every kilogram of gold produced.
From 2016 to 2017, XAMODX exported two kilograms of gold on a trial basis and received a 6,000 USD premium for every kilogram.
Head of the Treasury Fund of Mongol Bank P.Erdenetuya answered a few questions regarding the new ecological gold initiative.
Can you tell us what ecologi- cal gold means exactly?
First, I would like to clear up any misconceptions about ecological gold. There is a tendency to understand ecological gold as a gold nugget that has been shaped by nature over the course of time. But ecological gold is not that. Ecological gold is gold that was responsibly sourced and mined with consideration to humanitarian, ecological and environmental factors.
The Alliance for Responsible Mining, headquartered in Columbia, requires in its standards that artisanal miners do not use any chemicals in the processing of gold.
In addition, a miner must not inflict damage to the environment and must conduct rehabilitation after mining.
Another important requirement is that the miners have fair labor practices and do not use child labor.
If a miner fulfills all of these requirements, they receive a 4,000 to 6,000 USD premium from the company it is selling to for every kilogram of gold. The certification requires an annual audit by an independent auditor. It is important to be open and transparent about the origins and the mining process of the gold.
Is there an organization that received this certification?
There is. In 2015, XAMODX, an NGO made up of artisanal miners in Bayankhongor Province, received the Fairmined Certification thanks to the support of Sustainable Artisanal Mining Project implemented by the Swiss Development Agency.
Mongol Bank reported that it would be purchasing ecological gold. Who will be paying the premium for the ecological gold?
Yes, Mongol Bank is launching the ecological gold 2018 initiative to support the responsible mining of artisanal miners as well as to increase the foreign exchange reserves of the country. The premium will not be paid by Mongol Bank. The central bank will supply ecological gold to companies it has signed a contract with. Afterwards, the company provides the premium based on the operational report and audit results of the mining company.
At a time when the economy is going more and more green globally, is it a matter of reputation when prioritizing ecological gold?
In western countries, interest in buying ecological gold has been on the rise. Therefore, Mongolia could prioritize ecological gold moving forward, which will help increase the number of gold exports and artisanal miners.
In addition, our gold will be sold on the global market at value-added prices. As you said, ecological gold is a matter of reputation. This is true. Around 100 large global brands use certified ecological gold in their production. You can name Chopard or Gucci. The Nobel Prize in 2015 and the award at the 2014 Cannes Film Festival were made with ecological gold.
Can you please elaborate about the fair trade gold mining standards?
Fair trade gold mining is essentially a part of responsible mining. The adoption of fair trade practices allows artisanal miners to be more informed about responsible mining. This allows them to be employed and have regular income, helping many escape poverty. Fair trade practices have many upsides, this includes contribution to the local communities and increased income through premiums.