Case Study: Valcambi

  • Public
  • 45
Case Study: Valcambi

Company Background

Valcambi is one of the world’s largest refiners of precious metals, with an annual combined refining capacity for gold, silver, platinum and palladium of approximately 2000 metric tons. Valcambi’s clients include some of the world largest mining companies, artisanal and small-scale mining (ASM) organisations, international, governments and central banks, high end jewellery manufacturers, premium luxury watch manufacturers, and digital and tech manufacturers.

More than just a refinery, Valcambi provides a range of customized services to its clients, satisfying increasingly diversified market requests. These services include transportation, assaying, refining, manufacturing, financing and product storage.

Context to OECD DDG implementation

Valcambi sources mined materials from many countries and recognises the importance of CAHRAs and other high-risk sources in terms of global gold production. As such Valcambi includes CAHRAs, and Artisanal and Small-Scale Mining (ASM) in CAHRAs in its sourcing strategy. 

Valcambi is well-aware of the potential risks associated with sourcing from CAHRAS and ASM though. In order to ensure the integrity of its value chain, the refiner has developed best practice due diligence procedures to ensure responsible engagement and sourcing from mines, with specific focus on ASM. This approach is not only aimed at managing Valcambi’s supply chain risks and protecting its business interests, but also to drive best practices within the ASM sector.

Valcambi is confident that its sourcing model ensures that the risks are well-managed. This is down to a number of factors, including robust internal systems and procedures, a deep understanding of the operating context, and the building of strong relationships with stakeholders on the ground.

Valcambi’s due diligence procedures follow the OECD DDG, and exceed its requirements in many areas, as described below.

Due Diligence Process: Step 1

In order to develop its due diligence processes for mined material sourcing, with focus on ASM, Valcambi took several practical steps starting by developing a suite of risk assessment and management tools and procedures in line with the unique nature of the ASM sector.

Secondly, after extensive consultation with industry stakeholders including clients, NGOs, ASM experts and industry associations, Valcambi piloted the ASM procedures on the ground, addressing deficiencies when indicated. This allowed the refiner to understand the practical realities of the ASM gold sector, as well as giving company representatives the opportunity to witness ‘best-practice’ scenarios and speak to the miners themselves. This process also provided the company with extensive insights into the needs and desires of the various stakeholders in the ASM supply chain for gold, providing a glimpse of the potential positive impacts that could arise from successful responsible sourcing. Finally, the ASM procedures were reviewed by an academic institution to identify any areas for improvement.

Due Diligence Process: Step 2

Valcambi performs varying degrees of due diligence on existing and potential sources based on the potential level of risk associated with the counterparty as well as its operating environment and supply chain routes. Valcambi distinguishes gold that comes from ‘high-risk’ sources, which could include CAHRAs or ASM in lower-risk countries (such as Peru and Colombia). 

Valcambi not only assesses the risk of the wider operating context in which a source is located, for example at the country or regional level, but also - and more importantly - at the mine-site level, particularly for ASM operations, scrutinising every aspect of the mining operation, including human rights, labour, operational health and safety, environmental management, and financial flows, amongst others. 

Alongside due diligence and risk management systems, Valcambi ensures that ASM gold is transported, stored and refined separately. This enables the refiner to keep close track of ASM-originated gold and to meet different customer demands regarding the origin of the gold they are buying.

Finally, as part of Valcambi’s continuous improvement approach, its due diligence procedures are being reviewed on a continuous basis by its compliance officer.

Due Diligence Process: Step 3

In direct dialogue with the miners, Valcambi assesses and discusses non-conformity – often referred to as red flags - and where miners show commitment to improving their practices, supports the miners to address outstanding issues, working with a network of stakeholders on the ground.

In Peru and Colombia, Valcambi’s sourcing model has been implemented in collaboration with the company’s local and international networks, including government institutions and NGOs. Through its strong relationships with local stakeholders, Valcambi can leverage relevant knowledge and experience and maintain a trusted presence, even when company representatives cannot be physically present. Stakeholders on the ground can monitor the situation at mining operations in between Valcambi’s regular site visits, to ensure that risks are continuously and effectively managed.

Due Diligence Process: Step 4

Valcambi’s listing on the LBMA Good Delivery List is dependent on its compliance with the LBMA’s Responsible Gold Guidance (LBMA RGG), which includes an annual requirement to undergo a third party assessment, or audit, confirming compliance to the LBMA standard.

Additionally, Valcambi takes on further voluntary certifications for responsible sourcing. Valcambi has been certified as compliant with the Fairtrade standard for gold and associated precious metals from ASM since 2015 and as such is a Fairtrade licensee. In 2017, Valcambi became a Fairmined Authorized Supplier to transform and trade Fairmined Gold. Valcambi holds a Code of Practice Certification and a Chain of Custody Certification from the Responsible Jewellery Council (RJC) which are awarded following successful audits.

Due Diligence Process: Step 5

Valcambi’s listing on the LBMA Good Delivery List includes an annual requirement to produce a Refiner’s Compliance Report.

In addition, Valcambi produces a sustainability report annually in which the company describes in depth its approach to responsible sourcing, its involvement in supporting responsible ASM and examples of ASM it sources from.  

More case studies