Delving into the complex challenges surrounding gold is no easy task. It requires following, as far as possible, the entire value chain. After examining Switzerland’s system for quality and origin control, and the expertise of one of the world’s leading refiners, Swiss company Argor-Heraeus, Luxury Tribune continues its investigation on the ground. This is a crucial step in comparing the mechanisms in place in Switzerland with the realities of gold extraction.

Today, Mongolia’s geopolitical strategies focus on strengthening its autonomy in the face of its two powerful neighbours, Russia and China (DR)
It is a work in progress. Peru and Colombia, countries where we have been operating for some time, show that the system works

To understand these realities, Luxury Tribune travelled to Mongolia, a long-standing gold-producing country (16 tonnes of gold in 2025), politically independent and stable, whose mining operations range from the smallest to the largest industrial producers, alongside a vast number of artisanal mines that largely escape state oversight.
The choice of Mongolia took shape through a project initiated by Swiss Better Gold (SBG), a Swiss association founded in 2013 to support the social and environmental practices of ASM (artisanal and small-scale mining), small and medium-sized mines, and to connect gold producers, traders, refiners and end buyers. Several industry stakeholders gathered in the country in late September to monitor and advance the pilot project launched in 2025 between SBG, the Bank of Mongolia and Swiss refiner Argor-Heraeus.

For the three partners, who had already signed a Memorandum of Understanding (MoU), the primary objective was to understand the structure of the supply chain, identify the number of legal and illegal operators, and strengthen traceability and the social and environmental practices of mining operations, enabling their gold to enter the supply chain of refiners accredited by the London Bullion Market Association (LBMA).
For Luxury Tribune, the aim was to observe and analyse the value chain on the ground, which is often far more heterogeneous than the schematic picture presented by organisations based thousands of miles away from miners who toil six days a week in tunnels or pits, digging relentlessly in search of gold dust.
This trip reaffirmed a fundamental principle: the traceability of a supply chain is demonstrated by linking information to the reality on the ground

Meetings were therefore arranged with Diana Culillas, CEO of the Swiss Better Gold Association; Angelo Rizzella, Head of Sustainability at Argor-Heraeus, the exclusive refiner of Mongolian gold for the past ten years; and Telmen Tumenjargal of the Bank of Mongolia, the country’s sole gold buyer.
The LBMA, a major player in the gold market that brings together the world’s leading refiners and sets standards, was represented by Gregory Phuzumoya, a consultant and specialist based in South Africa. At SBG’s invitation, his objective was to meet with and inform traders, representatives of artisanal mines and commercial banks about international responsible gold sourcing requirements. Also in attendance was SBG member Melchior de Muralt, a partner at Swiss investment firm de Pury Pictet Turrettini & Cie SA, who was assessing whether traceable and responsibly sourced Mongolian gold could be included in the firm’s dedicated investment fund, with approximately USD 360 million under management.
The programme, organised by Diana Culillas over the course of a week, included visits to eight mines across three distinct regions of Mongolia. It was a dense succession of encounters with diverse, often harsh realities in remote, sparsely populated mining areas. Most consisted of rudimentary accommodation huts on the outskirts of mining sites operating around the clock, some on so-called “abandoned” land, which the state grants to ASM operators.
Swiss Better Gold Association’s Agreements in Mongolia
This gradual discovery proved enlightening for everyone, offering an immersion into Mongolia’s still poorly mapped mining network and the sometimes inscrutable workings of government ministries in the capital.
Yet at every meeting, whether informal or official, there was a clear willingness to make progress on tracing the precious metal. The commitment varied in intensity but was firmly embedded in people’s minds, ready to seize the opportunity of compliance as one might follow a newly discovered vein of gold.
This tangible thread is the one Swiss Better Gold Association seeks to establish in Mongolia, as it has already done in Colombia and Peru. Its ambition is to bring small and medium-sized mines already certified as “Step 1” into the “Step 2” accreditation process, allowing them to benefit from a premium rewarding improvements made across several criteria, including traceability. The price of gold is set above the market rate, with a premium of USD 1.35 per gram. Of this amount, USD 0.70 is paid to the mine that has met all requirements, USD 0.50 is invested in technological or logistical support for mines undergoing improvement, and the remaining USD 0.15 covers the cost of external verification audits.
The system is therefore not philanthropic in nature. Its purpose is to create a virtuous cycle of progress in responsible gold production, driven by the economic incentives available to miners.
The system introduced by SBG in 2013, shortly after the release of Blood Diamond, a film that helped raise awareness among the public and industries, particularly the luxury sector, is straightforward: artisanal, small and medium-sized gold mines (ASM) are assessed against 27 criteria covering environmental, social, human rights, transparency and governance standards.
To date, five Mongolian mines have achieved SBG Step 1; of these, two Mongolian mining companies – MGGEC LLC and Bayangol Eco Zaamar LLC – have been awarded ‘Swiss Better Gold’ Step 2 accreditation, valid for two years from 19 October last year, whilst three are currently undergoing assessment to join the programme. These are precisely the mines we evaluated on the ground.

The first encounter was striking. Three hours by road from Ulaanbaatar airport, near the Russian border, and after crossing breathtaking landscapes where Przewalski’s horses roam freely, the first mine, Sonor, came into view behind ochre-coloured hills.
A water-filled pit opened before us. Next to it stood a second excavation, where excavators worked deep into the earth, their jaws methodically swallowing cubic metres of soil before depositing them onto trucks.
The soil was then poured onto a giant rotating sieve. Water was added, allowing gold dust to settle onto a carpet. In a small hut about a hundred metres away, a woman perched on a folding stool, wearing pink rubber gloves, directed a stream of water over the darker concentrate previously extracted from the carpet.

The resulting sand was then sifted more finely to isolate the gold particles with greater precision. In a basin, tiny flakes of gold began to appear. They would subsequently be processed in a nearby laboratory to produce doré, an unrefined gold bar.
The material is then sold to a commercial bank, provided the mine holds an operating licence, or through an intermediary in the case of artisanal operations. The latter then sells the doré to the Bank of Mongolia.
Is that the end of the journey? Not at all. The doré is then flown to Switzerland, to Argor-Heraeus in Mendrisio, where refining begins. The certified 99.99% pure gold is subsequently sent back to Mongolia’s central bank, where it can be used to build gold reserves, exchanged for foreign currencies, or sold in the form of bars or commemorative gold coins.
Although this supply chain appears straightforward, it is anything but. Like every country rich in this precious mineral, Mongolia has a very large number of illegal artisanal mines operated by what are known locally as “Ninjas”, a reference to the green boots worn by miners and often hanging from their backs.
These illegal ASM operations, frequently clustered around official mines, attempt to extract gold from land that has already been mined (secondary mining) and trade it. Much smaller than the mine described above, they often consist of just a handful of miners digging together with rudimentary tools before sifting the soil by hand.
These illegal operations fall outside the scope of environmental and social standards and are absent from Mongolia’s mining maps. Human rights compliance cannot be monitored.
The country is attempting to tackle illegal mining through various measures, which we sought to understand by speaking with mining associations, traders and the Ministries of Mining and Environment.
The main problem is that excessively high taxes (approximately 10%) and cumbersome inspections weigh heavily on artisanal mine operators who are accredited.
According to ministry figures, only 205 official ASM concessions currently exist (one concession may encompass several mines). How many illegal artisanal mines are there? No one we spoke to could provide a clear answer. According to figures cited by unofficial sources, there could be as many as 30,000 illegal miners.

Gregory Mthembu-Salter, of Phuzumoya Consulting and a consultant to the LBMA, explains: “The number of so-called ‘ninja’ miners in Mongolia surged in the early 2000s as economic conditions deteriorated and weather patterns became increasingly extreme. These factors drove many people away from traditional rural activities such as livestock farming, while rising gold prices made gold mining increasingly attractive. The government is combating these clandestine miners by deploying an ‘environmental police force’ to curb illegal activities and issuing licences to a limited number of artisanal miners. However, these permits apply only to land that has already been mined and are subject to a complex, costly, multi-stage registration process.
Despite these powerful incentives and constraints, illegal mining persists. Some of the gold extracted by ‘ninjas’ is reportedly smuggled into China. Moreover, since commercial banks sourcing gold from traders do not require them to disclose the metal’s origin, some of this production inevitably enters the legal supply chain.”
For its part, the LBMA advocates, rather than encouraging the government to intensify repression further, potentially driving even more miners into illegality, broadening the integration of artisanal miners into the legal sector, while fully respecting the need to protect Mongolia’s environment.
“Indeed, only legal activities allow government authorities to enforce environmental standards, whereas ‘ninjas’ operate as they please. Finally, if the supply of legally mined artisanal gold increases, traders will be better positioned to disclose their sources. This will strengthen traceability and enable the Bank of Mongolia, and consequently Argor-Heraeus, to meet their responsible sourcing obligations as defined by the LBMA.”
SBG’s Ambition to Make Mongolia a Model
The Swiss Better Gold Association’s work is therefore crucial in encouraging mines to enter the legal, traceable and responsible supply chain. Still, Mongolia also extracts gold from much larger-scale mines (large-scale mining), which are capable of extracting several tonnes of gold, compared with just a few dozen kilograms at most from artisanal mines. The mines visited during our stay, primarily small and medium-sized operations certified as SBG Step 1 (producing a total of 56 kilograms of gold in 2025), as well as three artisanal cooperatives potentially eligible for certification, were interesting on several levels.
Although the purpose of our visit was not to conduct an inspection, we were able to observe compliance with environmental standards, including the absence of cyanide use (mercury is banned in Mongolia), site rehabilitation after mining operations (pits are filled in, the original topsoil is restored and fertilised to accommodate fruit trees or edible plants that local communities can sell), the construction of infrastructure designed to improve miners’ quality of life, and appropriate safety measures in line with the LBMA standards.
According to Diana Culillas: “This is a process of continuous improvement. Peru and Colombia, where we have been operating for longer, demonstrate that the system works. Some cooperatives have grown from producing just a few kilograms to one tonne per year, thanks to investments funded by the premiums we provide to those reaching Step 2. In essence, we are helping miners, who account for 15% to 20% of rural employment in Mongolia, professionalise their operations. Helping these SMEs adopt better mining practices is our added value. Traceability is essential and demanded by our clients, many of whom work in the Swiss watchmaking industry. Today, SBG works with only a handful of mines in Mongolia, but our ambition is to quickly begin working with ASM cooperatives, known locally as partnerships, comprising between six and fifteen miners. The signing of the agreement between SBG, Argor-Heraeus and the Bank of Mongolia is a catalyst in this regard.”
Indeed, SBG has the ambition to make Mongolia its flagship programme.
The fact that a motion on responsible mining was discussed in Mongolia’s parliament following the signing of the tripartite agreement between the central bank, SBG and Argor-Heraeus on 28 September demonstrates the country’s determination to become one of the first in the world to adopt a responsible monetary policy. This is also a strategic issue for the Swiss refinery, which has held an exclusive agreement with the country for ten years (refining 16 tonnes of gold in 2025).
Gold traceability must extend all the way back to the mine to ensure the integrity of the entire value chain. The Mendrisio refinery also aims to set an example by promoting responsible practices throughout the precious metals sector.
Angelo Rizzella, Head of Sustainability, concludes: “This trip reaffirmed a fundamental principle: supply chain traceability can only be demonstrated by connecting information to realities on the ground, verifying its consistency and communicating transparently about the limitations that remain. In Mongolia, we were welcomed with great openness. Dialogue with local stakeholders enabled us to better understand the context and helped strengthen mutual trust. For us, progress is only credible when it is documented and verifiable.”

By Cristina D’Agostino

Published Date:2026-11-05