Liquid gold is poured in the form of bars.
Sarah FrattaroliDeputy Head of Economics
Mendrisio TI exudes more industrial chic than Ticino dolce vita. Among the German-speaking Swiss, the place, just a few kilometers from the Italian border, is known for the Fox Town outlet temple, a popular destination on rare rainy days during Ticino holidays.
Just a few steps away, hidden behind high concrete walls, protected by barbed wire fences and surveillance cameras, is one of the largest gold refineries in the world: Argor-Heraeus. The gold smelter used to belong to UBS, today it is owned by the German Heraeus Group – with an annual turnover of 30 billion euros, it is a giant in the precious metals business.
Despite German owners, gold processing still takes place in Ticino. The company processes up to 1,300 tons of gold and 1,100 tons of silver every year in the unpretentious industrial district of Mendrisio.
A maze of corridors
The fact that only a few people know how powerful Switzerland actually is in the gold business is also due to the industry’s notorious secrecy. Blick spent months trying to get a visit to one of the four major Swiss gold refineries. This was after the Swiss gold business had attracted public attention in the wake of the Ukraine conflict.
There was a hail of cancellations. Only Argor-Heraeus let a look in – and then only as part of a well-timed media visit. Behind the high concrete wall, Robin Kolvenbach (37) leads through the well-protected gold refinery on this autumn day. The German is Co-CEO of Argor-Heraeus.
Equipped with safety goggles and overshoes, they head into the production halls. They are like a labyrinth: Different buildings are connected to each other via underground passages so that security checks do not have to be carried out again everywhere.
“Gold is gold” has had its day
500 highly specialized employees work in the refinery. Two of them now greet their CEO with a jovial fist salute and a casual saying – the German speaks Italian without any problems – before they get back to work: the two men are currently processing industrial gold, so-called doré bars.
The bars look more like stone than precious metal. They are carted from mines around the world to Mendrisio for further processing. Every mine, whether in Russia or in China, has a unique rock composition. In the laboratories in Mendrisio, this composition is checked when the material arrives, so that no gold from problematic sources ends up in the delivery. In addition, the doré bars in the mines are sprayed with artificial DNA. In Mendrisio, this DNA is analyzed using a PCR test.
The message is clear: the industry is striving for transparency. The mantra “gold is gold” used to apply. Today, on the other hand, consumers and investors want to know where the gold comes from – whether it was mined by children or whether it is filling Vladimir Putin’s (70) war chest.
In Mendrisio you can’t drive up with your grandmother’s gold jewelry and have it melted down. “We also only purchase scrap gold from a small number of reliable suppliers,” assures Kolvenbach. The fact that his company looks at the sources of gold with eagle eyes has little to do with good people. Rather with bare numbers. “We see the traceability of our gold as a competitive advantage,” admits the company boss frankly.
Sand dust instead of fairy dust
The doré bars are now melted down in the production hall in Mendrisio at 1600 to 2000 degrees Celsius. It’s hot in the hall. Despite this, the employees wear long clothing and thick gloves for safety reasons. They turn the doré bars into pure gold dust – which, however, looks less spectacular than expected: not shiny, not fairy-like, more like sand dust. The halls at Argor-Heraeus also have nothing luxurious about them. With concrete floors, metal pipes and all kinds of technical equipment, they look just like any other factory building.
Only with the subtle difference that at the end of the chemical process, gold granules with a purity value of 99.99 percent emerge – and plonk into conventional plastic tanks as if they were nothing more than gravel. “As a chemist, I don’t even notice that,” comments Kolvenbach with a shrug. “The chemical processes behind it are quite simple.”
No photography allowed
The gold granulate is melted down in another hall. For the first time, gold refining actually looks the way you imagine it: Here, liquid gold is poured into ingots of different sizes. To cool down, the ingots end up in a huge pot full of cooling water. A worker stirs it as if it were nothing more than a soup kettle.
In other halls, gold, silver and copper are melted together in various combinations to form alloys for the jewelry industry. Detailed photos are not allowed here: «Trade secret».
Transparency thanks to blockchain
A few doors down, finished gold bars are packed and scanned. Each bar has a unique surface, a kind of fingerprint. Even if the serial number is filed out or the bar is divided into two, it can still be clearly identified thanks to the surface scan.
The vision: One day every iPhone should be able to scan and assign the gold bars. The surface scan is stored on the blockchain. Just like the PCR test, which had previously clearly assigned the Doré bars to their mine of origin. This makes gold traceable from the mine to the bank vault. That has its price. “In case of doubt, the end consumer has to pay for it,” Kolvenbach clarifies.
The gold lying around everywhere – whether in its raw form, as granules, finished bars or alloys – is easily worth several million francs. Exactly how much depends on the current price of gold and changes daily. Gold is considered a safe haven in uncertain times, and increased in value significantly after the outbreak of the corona pandemic or the Ukraine war.
Kolvenbach leave the exchange rate fluctuations cold. “We don’t own the gold in the factory,” he explains. The gold refinery is only a service provider, processing the gold on behalf of mines, watch manufacturers or banks.
It is all the more important that the gold does not get lost. Before we leave the factory halls in Mendrisio, we go through a metal detector. Security guards search every single visitor. At the end, even the overshoes are removed so that not even the tiniest spangle of gold finds its way outside.