Promoting eco gold production is an act of social responsibility

We have interviewed the Head of Treasure Fund of the Bank of Mongolia Mrs. Erdenetuya about purchasing eco gold at the Bank of Mongolia.

- Please explain what is eco gold?

I want to make a clarification about a certain misunderstanding by the public . People think that eco gold is a chunk of gold formed by nature on its own. However, it is not. An international standard, called the Fairmined Standard is being implemented throughout the world. It has several different groups of requirements, such as being environmentally responsible and following the law and regulations, respecting human rights, etc. The most important requirement set by the Association of Responsible Mining in Colombia, is to eliminate the usage of any kind of chemicals in the gold processing. Also, it is equally important to be environmentally responsible and do proper rehabilitation after extraction. In addition, there are certain standards related to fair labor wages and the elimination of child labor. Only after fulfilling all the above-mentioned requirements the gold is rated as eco and a premium worth 4000-6000 dollars is paid by the company, which bought the gold. Every year an international, third audit company does audits to ensure conformity with the standard. It is also important to have a mechanism were the traceability and the supply chain of the gold is clear and transparent.

- Is there any organization that has fulfilled the standards?

Yes. There is. The XAMODX NGO was the first one to be granted this certificate not only in Mongolia, but in Asia. This organization received the certificate in 2015 with assistance from the Sustainable Artisanal Mining project of Swiss Agency for Development and Cooperation. In 2016-2017 they sold 2 kg of gold as a trial, where each kg of gold was worth a premium of 6000 US dollars. The premium is paid as an addition to the market price of the actual gold.

- The Bank of Mongolia has made an announcement that they are purchasing eco gold. Does that mean that the Bank of Mongolia will pay the premium?

Yes. We are encouraging the exploration and processing of eco gold by the artisanal miners, also to increase the Mongolian treasury fund, starting from 2018 we are exporting eco gold. However, the premium will not be provided by the Bank of Mongolia. The Bank of Mongolia will supply the eco gold to a purchasing organization in accordance with the cooperation agreement. The purchasing organization will provide the premium, based on the evidence of compliance to the standards and audit reports.

- I have seen some reports that using eco gold is an affair of honour, since the world tendency is to move towards a green and eco economy.

The interest and the tendency to use gold with eco certification in Western countries is increasing. Thus, our country has possibilities to increase artisanal mining organizations that abide by this standard and the amount of gold to be exported, develop responsible mining, and sell non-renewable resource with a value-added price. You mentioned that selling eco gold is a matter of honour. This is indeed true. Over 100 big brands around the world are using the gold certified by Fairmined Standard for their products. For instance, Chopard and Gucci are examples. Also, the Nobel prizes of 2015 and the award for the Cannes Film Festival of 2014 were made with eco gold certified by the Fairmined Standard.

- Could you provide some additional information about the Fairmined Standard, so that our readers could get a clear understanding?

It is simpler to understand it as a way of doing responsible mining. By implementing the Fairmined Standard the artisanal miners are empowered with knowledge to implement responsible mining. By doing this, they are enabled to get out of poverty through a steady job and sustainable income. The miners use the additional premium income from the eco gold to educate themselves, share with their community members and also contribute to the development of their community. This standard enables the artisanal miners to do responsible mining. The standard motivates the miners to develop their social, environmental and labour conditions, to strengthen good governance and rehabilitate the eco system. Also, the premium allows them to earn more income. This certification system is validated by third-party audit control. The standard includes many detailed requirements towards all the above activities.