Quo vadis, gold recycling?

An interview with Dr Bernhard Fuchs, CEO of Umicore AG & Co. KG and SVP Precious Metals Management, the gold bar supplier of Xetra-Gold.

The rising gold price is not only making the sale of scrap gold more attractive – gold recycling is also gaining traction. While we saw was strong growth in gold recycling in 2023, it is up a full 12 per cent thus far in 2024, according to the latest figures from the World Gold Council. And experts expect urban mining to become even more attractive in the future, as the more sustainable use of resources is a key task of our time. An interview with Dr Bernhard Fuchs, CEO of Umicore AG & Co. KG and SVP Precious Metals Management, about the opportunities and challenges of gold recycling.

First, I would like to emphasise that the physical properties of gold – whether primarily mined or recycled – are identical. Neither is there a difference in the value of gold in global trade. Gold, once extracted, can be recovered by recycling after any use, e.g. in a cell phone or from jewellery, without loss of any significant proportion. Umicore thus closes the cycle and conserves resources. Recycling old gold and electronic scrap not only reduces waste, but also helps ensure that valuable resources are not lost and can be used more efficiently. However, it is important that discarded old devices such as smartphones find their way back into the cycle – i.e. to specialized recycling companies that achieve high recovery rates – and do not lie unused in a drawer at home or even end up with residual waste. Otherwise, these recyclable materials are lost to the cycle!

Xetra-Gold: What is the proportion of recycled gold in the gold bars for Xetra-Gold, but also the entire gold production and procurement process? And what are the challenges and opportunities you have identified?

There are no official statistics on the ratio of gold from primary extraction (mining) and recycling, but we estimate that around a quarter of the gold produced each year comes from recycling processes. For technical and economic reasons, most of the recycled materials are not physically separated during the various steps of the process. Therefore, the proportion of gold from recycling which is kept physically separate from collection to the production of a new product is significantly lower. The proportion of recycled gold is generally expected to increase over time.

Xetra-Gold: Currently, the amount of recycled gold does not meet demand. How does Umicore meet the social and environmental challenges along the supply chain of the mined gold?

It is true that the amount of recycled gold is and will remain insufficient to meet demand in the foreseeable future. Umicore established strict internal standards many years ago. These have led to the development of a very stable and reliable network of. We have strict standards for our supply chain and only work with suppliers committed to our corporate policy on global sustainable procurement. These standards are stated on our website.
We also rely on recognised certifications and standards such as the LBMA (London Bullion Market Association) Gold Standard.

Xetra-Gold: Together, we are committed to further developing the LBMA Gold Standard. For the work of Umicore, what is the role and significance of this standard and these certifications in the context of gold extraction (in the long term)?

The LBMA Gold Standard has always played an important role for our customers, as it has guaranteed the purity and quality of Umicore gold bars for many years. In the past, the LBMA Gold Standard was purely a quality standard. The LBMA has since developed the Gold Standard into a leading standard regarding ethical and ecological criteria, in line with the 17 UN Sustainable Development Goals. These and other certifications ensure that the gold processed and distributed by Umicore meets the highest ethical and environmental standards. By continuously working on developing and adapting these standards, we are doing our part to increase sustainability across the entire industry.

Where do you foresee developments in the market to foster sustainability?

Investors are increasingly looking to buy gold from sustainable sources. In response to the scarcity of resources and the increasing demand for recycled, responsibly sourced metals with a reduced carbon footprint, Umicore has introduced Nexyclus™, which guarantees 100 per cent high-quality recycled metals, i.e. the precious metals gold and silver, as well as platinum, palladium and rhodium. These recycled metals are entirely sourced from reliable suppliers who adhere to Umicore’s responsible sourcing framework. Customers can choose from three offerings for the share of recycled content and chain of custody certificates. Nexyclus™ certificates are verified by independent third parties.

In our view, this is a good example of how we combine innovation and the circular economy to contribute to a more sustainable world.

Xetra-Gold: Thank you very much for the interview, Dr Fuchs.

Umicore AG & Co. G is part of the globally active circular materials technology group Umicore. Whether for the deposit of newly issued Xetra-Gold bearer bonds or the delivery of physical gold to investors who wish to convert their shares into gold bars: Umicore is the exclusive supplier of all gold bars required to collateralise Xetra-Gold.
Umicore is also the only non-financial company involved in the joint venture Deutsche Börse Commodities, the issuer of Xetra-Gold.