How Pawnshops are Helping the Environment and Jewelry Industry

Contributing Author Rafael Amador is Marketing Director for United Precious Metals Refining, Inc. Find them online at www.unitedpmr.com.

In recent years, due largely in part to the push for environmental sustainability, the demand for recycled gold has been increasing among jewelry designers, manufacturers, and retailers. With growing interest in 100% recycled gold, metals companies have changed their practices to now supply customers with gold from recycled sources such as jewelry manufacturing by-products such as sweeps and polishing dust, as well as from jewelry scrap. However, due to the recent gold rush of 2020 among other factors, the supply of recycled material seems to be diminishing as less and less scrap gold is being purchased by local retail shops.


The jewelry industry has never been eager to accept change or adapt to market influences. Driven more by trends and the need for expediency when it comes to manufacturing, the current drive for recycled gold is getting more traction than previous industry changes. So why the push for 100% recycled gold?


Effects On The Environment

One of the greatest downfalls of mining is the environmental impact on the area. When it comes to mining for precious metals, the process often requires drilling or digging deep into the ground as well as the use of explosives and harmful chemicals. The terrain that is affected by mining takes decades to recover and often times are left desolate and barren, with no attempts made to remedy the disrupted landscape.


Some mining companies have made an effort to aesthetically improve the footprint left behind after mining specific areas. Select companies in the Amazon region of South America plant trees that are able to grow in these conditions such as Hevea brasiliensis – the tree from which rubber is extracted. The trees thrive in disturbed areas which is why mining companies in countries like Brazil, Venezuela, Ecuador, Colombia, Peru and Bolivia use them to try and replenish the areas they have mined.


Serious Health Concerns

More often than is acknowledged, the contamination from harmful chemicals used in mining such as mercury and sodium cyanide, seeps deep into the soil reaching underground aquifers that supply water to neighboring communities. The health consequences are detrimental and can lead to severe health issues including, but not limited to, cancer and eventual death.


Sodium Cyanide solution is commonly used to extract gold from ore. There are two methods used: heap leaching and vat leaching. With heap leaching, the cyanide solution is sprayed over huge leaps of crushed ore as it is spread out over giant collection pads dissolving the gold and absorbing it into the solution. The collection pad absorbs the solution that has captured the gold. This process is repeated until the ore has been completely stripped of gold. In vat (or tank) leaching, the ore and cyanide solution are mixed in large tanks. This typically is a more controlled method and spills are less common, however, the waste product is stored behind large dams (tailing impoundments) which can and often fail catastrophically contaminating the surrounding areas.


Criminal Activities & Financial Crimes

One of the biggest concerns when it comes to mines is directly tied to financial crimes. Money laundering has been a major issue with the tracking of gold from mines in certain regions of Latin America as well as East and Central Africa. Illegally obtained gold is mixed in with legally mined gold by melting it together to mask its origin. Criminal networks such as drug cartels, terrorists and armed groups utilize this method of laundering to fund their illegal operations.


The exploitation of human labor in many regions also causes grave concern. In these regions, especially indigenous areas, children are often put to work in mines. The workday at a gold mine isn’t the 9-5 we’re used to here in the United States. Miners, including these enslaved children, often begin working before the sun rises and work full days and into the night to extract as much gold as possible each day. Though they are extracting a valuable mineral, the pay is negligible or at subsistence levels.


Solutions For The Pawn & Jewelry Industry

Metals companies have begun adapting their processes to ensure the gold being sold to the jewelry industry comes from recycled gold. To ensure this is in fact happening, organizations such as the SCS Global have launched programs to ensure that precious metals being supplied originate from recycled materials. Other companies, such as the RBA, audit companies to certify appropriate protocols are being followed to ensure manufacturers are being supplied with responsibly sourced gold for their production.


Many of the jewelry industry giants have turned to metals suppliers that only process and refine jewelry scrap. These metal suppliers source solely from pawnshops, jewelry manufacturers and jewelry repair centers around the world.


Rafael Amador Marketing Director United Precious Metals Refining, Inc.