Tracing the path that gold takes from mine to market is notoriously difficult. The precious metal is mined around the world, but unless it remains segregated on its journey through the global supply chain — most crucially at the refining stage, where batches traditionally are mingled — there is no way to distinguish the origins of one gold bar or the gold in one bauble from another.
That explains both gold’s millennia-old history as an international form of currency — and what many say is its most conspicuous modern-day weakness.
With gold mining practices coming under increasing scrutiny for their potential links to child labor, mercury pollution and other human rights and environmental abuses, the drumbeat of voices demanding full traceability in the gold supply chain has been growing louder.
The calls have taken on new urgency in light of fresh concerns that the Russian government may use “gold supply chains as a tool to evade sanctions and further subsidize their military aggression against Ukraine,” as an open letter to the jewelry industry from the Global Gold Transparency Initiative, an advocacy group, recently put it.
Charlie and Dan Betts, brothers from Birmingham, England, who represent the ninth generation of their family in the gold smelting and refining business — in 1760, Alexander Betts founded what is now called Betts Refining in the city’s Jewelry Quarter — believe they have a solution to gold’s traceability problem. Single Mine Origin, or S.M.O., Gold is an industry standard they created in 2018 to connect the dots between large-scale gold mines and the jewelry market. (The Fairtrade and Fairmined initiatives deal with artisanal and small-scale mines, but S.M.O. Gold is being offered as the only effort of its kind in medium- and large-scale gold mining.)
“What we’re doing is trying to get jewelers across the spectrum to engage with provenance,” Charlie Betts said on a recent video call. “Ninety percent of the gold in the market, people can’t actually point to where that gold came from.”
S.M.O. Gold mandates chain-of-custody protocols and, so far, two large-scale mines in Africa have signed up: the Yanfolila Mine in southern Mali, owned and operated by Hummingbird Resources, which Dan Betts founded in 2005; and the Ity Mine in Ivory Coast, owned and operated by Endeavor Mining, one of Africa’s largest gold producers.
Together, the mines produce more than 300,000 ounces of gold per year, which could be classified as S.M.O. Gold. And an additional Hummingbird mine, in Guinea, is under construction and is expected to start producing S.M.O. Gold by mid-2023.
(In terms of global stores, however, mining adds at least 80 million ounces of gold to the aboveground stock of gold each year, according to the World Gold Council, a London-based industry body of the world’s largest gold miners.)
The S.M.O. label is not limited to jewelry. The Bettses said they have enough gold supply to expand the standard to gold investment products, and are eager to see the S.M.O. standard used by other mining companies, including those that supply the electronics and industrial sectors.
Understand the Supply Chain Crisis
“It’s an opportunity — it sounds quite grand — to brand and repurpose mining to show it can be impactful and positive,” Dan Betts said on a follow-up video call earlier this month.
Now, when a batch of S.M.O. Gold leaves the mine, it heads to a refinery in Switzerland that has been accredited by the London Bullion Market Association, an international trade association that administers the Good Delivery List, a standard qualifying a company’s sourcing. A third-party inspection and certification company called Bureau Veritas, headquartered in Neuilly-sur-Seine, France, is charged with verifying that S.M.O. Gold remains segregated from other batches of gold at the refining stage.
From there, the gold is either shipped to an international casting house or sent to the Betts’s refinery in Buxton, England, where jewelers can purchase it for roughly the same price as Betts’s non-S.M.O. Gold. (The brothers said that, by taking advantage of economies of scale, they don’t have to charge a premium.)
“With Hummingbird, we have oversight of the entire supply chain from the hole in the ground to the ring on a finger,” Charlie Betts said.
Since its introduction in January 2018, S.M.O. has gained a small but growing following in the U.K., where a number of high-end jewelers — including Stephen Webster, Emefa Cole, Shaun Leane and the Brazilian designer Fernando Jorge — have embraced it as a way to provide extra assurance to socially conscious customers, who can receive a QR code that gives them a direct link to the source of the metal.
“The most high-profile ring I’ve ever designed — the engagement ring I did for Machine Gun Kelly and Megan Fox — is made out of Single Mine Origin Gold,” Mr. Webster said in a recent phone call.
The 18-karat white gold ring, a two-stone design featuring a pear-shaped Muzo Colombian emerald and pear-shaped antique-cut diamond in what is known as a “toi et moi” setting, made headlines when the American rapper, whose real name is Colson Baker, proposed to Ms. Fox with it in January.
Mr. Webster said he did not want to pretend that the traceability of the gold “led to much excitement,” but that he shared the information because responsible sourcing was an important aspect of his jewelry business.
S.M.O. Gold’s earliest jewelry supporter was Boodles, the 224-year-old Liverpool-based retail jeweler with nine stores throughout England and one in Dublin. Jody Wainwright, a director of Boodles — his father, Nicholas Wainwright, is chairman — said the company began using S.M.O. Gold in 2019, after receiving a letter from Human Rights Watch, an advocacy group that published a report in 2018 assessing 13 major jewelry brands, including Boodles, on how they were addressing human rights risks in their supply chains.
“They exposed the trade about being too lackadaisical about doing their due diligence on their suppliers,” Mr. Wainwright said in a recent phone call.
He was aware of S.M.O. Gold because the Wainwrights and the Betts share a long history. “My grandfather used to buy gold from their grandfather,” Mr. Wainwright said. “And I was at school with Dan Betts.”
How the Supply Chain Crisis Unfolded
Card 1 of 9
The pandemic sparked the problem. The highly intricate and interconnected global supply chain is in upheaval. Much of the crisis can be traced to the outbreak of Covid-19, which triggered an economic slowdown, mass layoffs and a halt to production. Here’s what happened next:
As of April 2021, all of Boodles’s gold jewelry, including chains and wedding bands, is made of S.M.O. Gold. “The really exciting bit is we can actually name the mine,” Mr. Wainwright said. “Then you know what’s going on there, you can see photos, you can visit it.”
But does traceability alone guarantee that the gold has been mined responsibly?
The Betts brothers acknowledge that gold mining is, by definition, unsustainable. “It’s a finite resource and then it’s gone,” Dan Betts said. “We’re trying to prove we can develop those resources in a way that’s responsible, not just for governments but for communities in remote locations where the mines are.”
He cited the community development programs that Hummingbird supported — in areas such as education, health and water and sanitation — and said the company was actively involved in teaching the local population “skills that are transferable, so after the mine is gone people are equipped” to find alternate employment.
As a member of the World Gold Council, Hummingbird is required to implement the Responsible Gold Mining Principles that the council established in 2019 as a framework for what constitutes responsible gold mining.
Terry Heymann, the council’s chief financial officer, said the council gave its members three years to implement the principles, and that “anybody who wants to conform needs to demonstrate that to an ‘external assurance provider,’” a term the council preferred to “auditor” to avoid confusion with a financial audit.
“It is a lot about promoting transparency,” Mr. Heymann said in a recent phone call.
Responsible mining advocates, however, have criticized the council’s principles as not demanding enough transparency.
Aimee Boulanger, executive director of the Initiative for Responsible Mining Assurance — a nonprofit organization that provides independent third-party verification and certification for all mined materials, with a focus on industrial-scale mines — said that as a body composed of mining companies, the council is not “a metric of trusted, independent review.”
Ms. Boulanger contrasted the council’s principles with her organization’s standard, which she called the most comprehensive and rigorous available. She said that when the initiative audited a mine, anyone — from community members to Human Rights Watch employees — could speak directly to the auditors.
“You can say, ‘Go look at the creek to the east of the mine because it’s running orange,’” Ms. Boulanger, who is based in the Seattle area, said in a recent call. “Auditors will look through it. They’ll be on site for a week and will meet with employees without the company there.”
“Increasingly, the world is expecting transparency and a greater authentic accounting of that,” she said. “It’s time for companies to come out and be more open, rather than saying, ‘Trust me.’”
Mr. Heymann said the central difference between the initiative’s standard and the council’s principles was that the latter are realistic. “We wouldn’t have gotten the full support from our membership if we didn’t put out a standard that stands up to scrutiny but is also feasible for mining companies to achieve,” he said.
So what does all of that mean for S.M.O. Gold? Christina T. Miller, a sustainable jewelry consultant based in College Corner, Ohio, and a frequent collaborator with the initiative and other responsible mining groups, said S.M.O. represented a step in the right direction, especially for medium-size jewelers seeking a steady supply of gold.
“Being able to laser in on the specific point of origin is really important,” she said, “because if you don’t know where it’s coming from, you can’t engage to improve.
“But don’t stop there,” she added. “Really get to know what the real practices are.”