The Royal Mint gold exchange-traded commodity (ETC) is set to become the world’s first ETC to be backed by recycled gold.
The Royal Mint Physical Gold Securities ETC (RMAU) will now have part of its gold reserves backed by bars made from gold extracted from electronic waste, the first product to do so, according to white-label ETF issuer HANetf.
It comes after the 1,100-year-old company partnered with Quintet Private Bank, with the latter offering $170m towards the project after it announced it would be using gold extracted from laptops and smartphones.
Unlike many other commodities, gold can be infinitely recycled with no degradation in quality. The initiative is part of The Royal Mint’s increased sustainability drive as it looks to diversify for the future.
According to the firm, the bars will be added to RMAU's reserves over time and will increase based on future demand.
RMAU is 100% backed by London Bullion Market Association (LMBA) good delivery bars which have been sourced on a best endeavour basis from its responsible sourcing programme.
It has also taken the step of switching all 60 of its Russian gold bars in RMAU to non-Russian bars, a process that completed last week.
Andrew Dickey, director of precious metals at The Royal Mint, said: “We already reuse a portion of our gold onsite to form gold bars but this is the first time we have produced a dedicated recycled product for use within RMAU.”
James Purcell, group head of sustainable investment at Quintet, added: “As a firm that places sustainability at the heart of our business and as the driving force behind our clients’ investments, we are very happy to partner with The Royal Mint which has a deep commitment to sustainable practices.”
The announcement comes following a bumper period of flows for gold ETCs as investors brace for economic headwinds, most notably an escalation in Russia’s war in Ukraine.
According to data from ETFLogic, the $16.4bn iShares Physical Gold ETC (IGLN) added a whopping $1.9bn in the week to 14 March while the $16.2bn Invesco Physical Gold ETC (SGLN) saw inflows of $911m.
Similarly, the $4.6bn Amundi Physical Gold ETC (GOLD) and $3.2bn Xtrackers Physical Gold ETC (XGDU) saw $241m and $161m in new money, respectively, over the same period.