02 Apr Why Swiss refineries ranked top in the world
Most of the gold produced in the world transits physically through Switzerland, and in particular Ticino. Four of the world’s major refineries of gold are located on Swiss soil.
It is difficult to visualise the enormous quantity of gold that arrives in Switzerland every year. In 2011, over 2,600 metric tons of raw gold were imported into the country, to a total value of SFr96 billion ($103 billion). This was a record, the quantity having more than doubled over the last ten years, not including the gold that transits through Swiss free ports.
To get an idea of Switzerland’s profile in the sector of gold refining and trading, consider another figure: the production of gold from all the mines in the world in 2011 amounted to 2,700 metric tons, according to data from the US Geological Survey.
“In an average year, Switzerland refines about 70 per cent of world gold”, according to Frédéric Panizzutti, spokesman of MKS (Switzerland) SA, a Geneva-based company, which specialises in gold trading and which owns the Pamp refinery in Castel San Pietro, Ticino.
“If you look at the refineries on the Good Delivery List, six have 90 per cent of the volume. Four of them are based in Switzerland”, he adds, backing up his statement: The Good Delivery List is a quality certification of the London Bullion Market Association, LBMA, the trade association for the gold market.
How was Switzerland able to carve out such a commanding position? “The answer is very simple”, says Panizzutti. “This country has an exceptional level of security and efficient logistic and financial systems. These are highly important factors in the precious metals sector”.
Like Bordeaux to wine
Switzerland is to gold like Bordeaux is to wine, notes Gilles Labarthe, journalist and author of a book on African gold . “Apart from its long historical tradition, all the infrastructures and required services are in place”.
“As well, it should not be forgotten that the gold market in Zurich is a very important one”, Labarthe said. “And up to a few years ago the main industry lobby, the World Gold Council, was based in Geneva”.
The reputation of the “Swiss made” brand as a synonym for quality is fully justified as regards gold, says Labarthe. “Gold is refined in accordance with the rule of –four nines– or 99.99 per cent, an exceptional grade of purity. To have an ingot refined in Switzerland is a guarantee of quality anywhere you go”, he explains.
“A refinery produces not just gold bars, but semi-finished products, like coins and medals, which require a high degree of precision. Switzerland has always maintained itself at the top as regards quality and there is no reason why that should change now,” notes Panizzutti, who draws a parallel between gold refining and watchmaking in Switzerland.
It is not a coincidence, therefore, that three out of five refineries in the world, to which the LBMA has given the title “Referee” of quality control for gold refined by the industries belonging to the association, are based in Switzerland.
In 2011, over 2,600 metric tons of raw gold were imported into Switzerland, to a value of over SFr96 billion, according to figures from the federal customs administration. This is the highest figure ever recorded.
The year before, imports had reached 2,326 metric tons (SFr70 billion).
Between 1990 and 2007, Switzerland imported between 1,000 and 1,600 metric tons of gold per year, with a value varying between SFr15.7 billion (1994) and SFr32 billion (2007).