A rare look behind the scenes of a Swiss gold refinery in Ticino

Mendrisio TI exudes more industrial chic than Ticino dolce vita. Among German-speaking Swiss, just a few kilometers from the Italian border, the place is known for its Fox Town outlet temple, a popular destination on the rare rainy days during the Ticino holidays.

Just a few steps away is Argor-Heraeus, one of the world’s largest gold refineries, hidden behind high concrete walls and protected by barbed wire and security cameras. Formerly owned by UBS, the gold smelter is now owned by the German Heraeus Group – with an annual turnover of 30 billion Euros and a giant in the precious metals business.

Despite the German owners, gold processing is still done in Ticino. The company processes 1,300 tons of gold and 1,100 tons of silver every year in the unpretentious Mendrisio industrial zone.

A maze of corridors

It is also due to the industry’s notorious secrecy that few people know how strong Switzerland really is in the gold business. Blick spent months visiting one of Switzerland’s four major gold refineries. This was after the Swiss gold trade gained public attention in the wake of the Ukraine conflict.

There was a shower of cancellations. Only Argor-Heraeus let him take a peek—just as part of a well-timed media visit. Behind the high concrete wall, Robin Kolvenbach (37) drives through the well-guarded gold refinery this autumn day. German is the Co-CEO of Argor-Heraeus.

They enter the production halls equipped with safety glasses and shoe covers. They are like a maze: different buildings are connected by underground passages so that there is no need to re-check security everywhere.

“Gold is gold” day is over

500 highly specialized employees work at the refinery. Now the two greet their CEO with a cheerful fist salute and a casual word – the German speaks smooth Italian – before returning to work – the two men are now processing industrial gold called doré nuggets.

The rods look more like stone than precious metal. They are transported from mines around the world to Mendrisio for further processing. Every mine, whether in Russia or China, has a unique rock composition. In the labs in Mendrisio, this composition is checked as material arrives so that no gold comes out of problem sources in delivery. In addition, doré sticks in the mines are sprayed with artificial DNA. At Mendrisio, this DNA is analyzed using a PCR test.

The message is clear: the industry strives for transparency. The mantra “Gold is gold” was practiced. Today, consumers and investors want to know where the gold came from, whether it was mined by children or whether Vladimir Putin (70) filled the war chest.

You can’t come in with your grandmother’s gold jewelry and melt them down at Mendrisio. “We also only buy scrap gold from a small number of reliable suppliers,” Kolvenbach reassures. The eagle’s eye for his company’s gold resources has little to do with good people. Rather with bare numbers. “We see the traceability of our gold as a competitive advantage,” the company boss admits honestly.

Sand dust instead of fairy dust

Doré sticks are now melted at 1600 to 2000 degrees Celsius in the production hall in Mendrisio. It’s hot in the living room. However, employees wear long clothes and thick gloves for safety reasons. They turn Doré sticks into pure gold dust – but it looks less gorgeous than expected: not shiny, not fairy-like, more like sand dust. The halls of Argor-Heraeus are not luxurious either. It looks like any factory building with its concrete floors, metal pipes and all kinds of technical equipment.

With just a subtle difference, gold granules with a purity of 99.99 percent emerge at the end of the chemical process and are poured into conventional plastic tanks as if they were nothing more than gravel. “As a chemist, I don’t even notice it,” Kolvenbach says with a shrug. “The chemical processes behind it are pretty simple.”

No photography allowed

The gold granule is melted in another hall. For the first time, gold refining actually looks like you’d imagine: Here, liquid gold is poured into nuggets of different sizes. The ingots are placed in a large pan filled with cooling water to cool. A worker stirs it as if it were nothing more than a soup pot.

In other halls, gold, silver, and copper are melted 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 screened. Each stick has a unique surface, a kind of fingerprint. Even if the serial number is filed or the bar is split in half, it can be clearly identified by surface scanning.

Vision: Someday every iPhone should be able to scan and assign gold bars. The surface scan is stored on the blockchain. Just like the PCR test earlier, which explicitly assigned Doré rods to their mine of origin. This ensures that the gold is traceable from the mine to the bank vault. It has a price. “In case of doubt, the end consumer has to pay for it,” explains Kolvenbach.

The ubiquitous gold – in the raw form, in granules, finished bars or alloys – is easily worth several million francs. Exactly how much gold depends on the current price and changes daily. Gold is seen as a safe haven in uncertain times, and its value has risen significantly after the corona epidemic or the outbreak of the Ukrainian war.

Kolvenbach keeps exchange rate fluctuations cold. “We do not own the gold in the factory,” he explains. A gold refinery is a service provider that processes gold solely on behalf of mines, watchmakers or banks.

It is even more important that the gold is not lost. We pass through a metal detector before leaving the factory halls in Mendrisio. Security guards call each visitor one by one. In the end, even the shoe covers are removed so that not even the slightest bit of gold sticks out.