How Gold Is Refined: A Step-By-Step Guide

Here’s a comprehensive overview of the gold Streaming process, beginning with gold ore extraction in Africa and culminating in the production of refined gold doré bars in Dubai. The process involves multiple stages, including mining, concentration, smelting, export, and final refining.

Why Does Gold Need to Be Refined?

We use a unit of measurement called a karat to denote how much gold is in an alloy. A karat is one part out of 24. By this measurement, then, pure gold would be 24 karats or 99.99 finesses. An 18-karat gold ring would be 18 parts pure gold and six parts another metal alloy.

To assess and refine the gold, the refiner will need to separate the gold from the other elements and determine how much of each substance there is and what they’re worth.

How Raw Gold is Refined

Artisanal and small-scale mining (ASM) in Africa is characterized by low-tech, labour-intensive mining operations, where individuals or small groups use rudimentary tools to extract minerals like gold, cobalt, and other valuable resources. These operations often serve as a crucial source of income for millions of people in rural areas, acting as an economic safety net when formal employment is scarce. 

With the huge increase in gold prices over the last few years, mines which were previously abandoned as uneconomic have now reopened, pushing thousands of kilos of gold doré onto the market, not in sufficient quantities for the wholesalers to become interested, but an active market.

• Informal and unregulated: A significant portion of ASM activities operate outside of formal frameworks. 
• Rudimentary tools and techniques: Miners primarily rely on basic tools like picks, shovels, and rudimentary machinery, with minimal mechanization. 
• Low capital investment: ASM typically requires little initial capital, making it accessible to individuals and small groups. 
• Labour-intensive: ASM involves extensive manual labour and physical effort to extract and process minerals. 
• Poverty-driven: Many individuals are pushed into ASM due to a lack of alternative employment opportunities and poverty. 
• Significant contributor to rural economies: ASM provides vital income and livelihoods for millions of people in rural areas, contributing to local economies and communities. 
• Environmental and social challenges: ASM can pose environmental risks, as well as health and safety hazards for miners. 
• Formalization efforts: There are ongoing efforts to integrate ASM into formal mining sectors, improve working conditions, and ensure environmental sustainability. 

These mines may only produce one or two ounces of low grade gold every month, not sufficient to attract wholesalers but life changing for rural communities.

Completing On-Site Processing

Even once the gold has been extracted from the earth, it’s still in its raw form. It’s still just raw ore that requires processing before it becomes pure gold.

First, the ore is crushed. It then undergoes a series of processes that will vary depending on the different elements and minerals that are mixed in with the gold ore. The purpose of these procedures is to separate the gold from these surrounding elements.

The complexity of this processing depends in part on the grade of the ore. Low-grade ore is relatively simple to process while high-grade ore is a more extensive and complicated process.

Gold collection Agents

Agents work across Africa buying up these small quantities of low quality gold and once they have sufficient, they have them refined in regional refineries. The resultant gold bars are around 95%-97% pure, however they still have copper, lead and platinum making up the remaining contaminants.

Gold Logistics Agents

The gold bars are now of a much higher quality and are very saleable, the only problem is, wholesale gold buyers off a very low price, looking to make their corporations greater profit, or they have to sell on an open market in Africa, again at greatly discounted prices. This is where Gold Logistics Agents come in, they either directly or through connections, find buyers from outside of Africa who pay a fairer price for their gold in return for the gold being delivered to the airport of the purchaser choice [in our case Dubai].

One condition of this agreement is a financial guarantee being put in place to ensure funds are available to purchase the gold on its safe arrival in Dubai. Cornerstone manage financial instruments to ensure finances are in place one the weight and quality of the Dore is confirmed.

Transport and Insurance

Gold arriving in Dubai, having gone through the legal importation process, fees and taxes paid, requires to be transported to the refinery by secure and armoured vehicle (G4S, Lomis, Ferrari etc.). In addition the gold needs to be insured from arrival in the airport through to its sale just a few days later.

The Refiner Takes a Sample for Assaying

At arrival at the refinery, the gold doré is weighed and assayed to establish its purity, only then can the value be calculated and payment is made to the Gold Logistics Agent.

Assaying Process

If the purpose is only to test the purity of the gold, the following process only requires a small sample of the gold. If the purpose is to refine all of the gold, however, this will be done on a much larger scale.

The refiner takes either the sample or the entire portion of gold and mixes it in a crucible with a flux (soda or borax) and lead or silver. The flux lowers the melting temperature of gold, making the process somewhat easier to complete, and the lead helps to collect the pure gold from the alloy.

The Refiner Heats the Sample and this mixture of gold and other additives is then heated and melted at a temperature between roughly 1000 and 12000 degrees Celsius. When the mixture reaches this temperature, it melts. The metals in the alloy separate from one another upon melting and the gold sinks to the bottom of the crucible. At the bottom, it’s collected by the lead where it forms a hard, compact “lead button” The other metals and impurities are left behind.

The Refiner Separates the Gold and Lead and once everything has cooled down, the refiner removes the lead button and places it in a porous cup known as a cupel. The refiner will then heat this in a cupellation furnace. When the cupel is heated, the lead seeps out through the porous holes in the cupel, leaving behind just the gold in a bead-like shape. This bead of gold is known as the prill. To separate the gold from the silver, the refiner places the gold bead in nitric acid or a combination of hydrochloric and nitric acids.

A Lab Assesses the Gold

For this process, the gold usually has to be sent to a lab. From this point, several different methods can be used to determine the karat number of gold. These analytical methods include Inductively Coupled Plasma-Mass Spectrometry (ICP-MS), Atomic Inductively Coupled Plasma-Atomics Emission Spectrometry (ICP-AES) and Atomic Absorption Spectroscopy (AAS).

Casting of Pure Gold Bars

Of course, this will depend on how the refined gold will be used. In most cases, however, the newly refined gold gets moulded directly into gold bars. These are easy to store, transport and are easily marked based on weight and karat.

Refined gold (99.99% or 999.9 fineness) is cast into London Good Delivery Bars (12.5 kg), kilo bars, or coins. Bars are stamped with weight, purity, and refinery mark.

• Certification and LBMA Compliance
• Refined gold is certified under LBMA (London Bullion Market Association) standards.
• Traceability and anti-money laundering (AML) compliance are ensured.

Distribution and Sale

Refined gold is sold to banks, bullion traders, jewellers, and central banks. Dubai serves as a major re-export and investment hub for the global gold trade.

The End Result

As you can see, gold Streaming is an enormously complicated and highly involved process when you’re dealing with raw gold ore straight out of the earth. You should only trust professionals who have a good reputation for getting the job done correctly with this complex process.