Recycling jewellery: Cost benefit analysis
8th March 2019
With the very high price of gold at the moment I am getting more and more enquiries about recycling gold. I will try to explain what is involved in the process and hope you will better understand why it is sometimes not cost effective and almost never something I can give an immediate reply and quote for off the top of my head. As an example we will use the restoration of the above ring.
Benefit - money you save by not paying for gold
Cost - money you pay for extra work involved in using scrap gold
Before we start - the alternative
In cases where it is not cost effective to recycle your gold I suggest you take your scrap jewellery to a bullion dealer and sell it. You can then use the money from that to have your new piece made in all new precious metal alloys.
Please note I am not a second hand nor bullion dealer. The law prohibits me from buying it from you.
The cost to have gold jewellery purified and then turned into a precious metal alloy is not trivial and the bullion dealers know it. This is an expense that works well with large amounts of scrap. I recycle my scrap once a year or sometimes longer because of this. I usually wait until I have well over half a kilo.
Gold traders offer the general public well below what your scrap is worth knowing that the expense of you having a small parcel of gold (relatively speaking) refined will not be cost effective.
If you have enough scrap then contact the Perth Mint and get them to refine it and either pay you out or return pure gold. You will get a far better price than a local gold buyer/secondhand dealer will give you from my experience.
Extra cost 1 - inspection
When you present gold jewellery for me to recycle I have to take the time to inspect it and make sure it is suitable for re use. As we will see later what the customer thought was enough gold in this case was nowhere near. Here are some gereral rules for recycling gold:
recycling white gold has a very high failure rate. I no longer do it
you cannot turn white gold alloys yellow and vice versa without refining back to pure gold
18ct gold can be economically converted to 9ct
9ct gold cannot be economically converted to 18ct
Extra cost 2 - unset and dismantle
Once I determine what can and cannot be recycled I then need to unset any gems and sort the gold. Before doing anything I need to point out any existing damage. In this case (as with most) the customer was not aware of the existing damage to the sapphire.
Extra cost 3 - isolating your gold, this is a big one.
When I work with my own gold I will group pieces of the same precious metal to be done at the same time. This means that at any given time my workbench is working a particular precious metal, say for example 9ct yellow gold. With all the jobs being the same precious metal I do not have to worry about them being mixed.
During certain processes that require me to wait, such as pickling a piece in acid, I can work on other pieces without having to clean down my bench, which takes time.
When I use your gold I cannot mix it with mine for the following reasons:
I need to return to you any unused
I do not know the origin or accuracy of the hallmarks on your gold
your alloy may be a different colour to mine of the same caratage/purity
When I am working with your gold I am only working on your piece. This is less efficient and you have to pay for that.
Extra cost 3 - subtractive manufacturing.
This is a complicated subject that varies with every method that I use to create a piece. In the case of this ring I used two different methods of subtractive manufacturing. One for the anchor area and another for the band.
For the band I carved the ring out of wax and then lost wax cast it. For this process to work properly for a heavy 30 gram ring like this I needed at least 20 grams of extra gold. The area the extra gold would be used/fill is circled in red in the photo below. Without the extra gold as a metal reservoir for the ring to draw on during cooling the ring would not cast properly.
It was not long before I had to inform the customer that I would need them to supply more gold. I cannot mix my gold with the customers because of the previous reasons given in “Extra cost 2”.
This artcile explains more about Lost Wax casting. Skip down to the section titled ”Turning that wax into Gold” :
Article: Mould, mend and make.
The cost here is that you have to have that extra gold on hand. In this case the customer had to find more pieces she was prepared to scrap.
The excess, minus a small economically unrecoverable portion from the manufacturing process is returned to the customer..
Possible extra cost 4 - alloy gold
With this ring some of the gold to be recycled was 18ct gold. I needed to alloy that down to 9ct yellow gold to match the rest. Master alloys have to be purchased and time taken to perform the task.
Extra cost 5 - record keping
During this process I need to measure, sort and record all of your jewellery. This requires notes and photos. When I use my materials I do not have to do any of this, just simply weigh the finished item.
Extra cost 7 - your gold your risk
Recycling gold alloys is not a risk free process. As a general rule we do not use 100% recycled gold in a piece of jewellery. This can lead to metal defects like cracking and porosity especailly with low purity alloys like 9ct. If gold has been recycled previously it increases the risk yet again.
If you ask me to use your gold and you get metal defects then that is the risk you took. I cannot guarantee alloys that I do not know the origin of nor how many times they have been recycled. The cost here is potentially one in quality.
Possible extra cost 8 - fixing minor metal defects
This cost is similar to #7 but a cost in time not quality. Sometimes the gold in general recycles well but there might be a few areas that need extra work. This is work that I do not need to do when I use all new clean precious metal alloys.
The finished ring
When the piece is finished a large part of “Extra cost 4 - record keeping” is done. I need to show you where the gold went and mark off as returned anything that goes back to you unused.