Dirty gold can still slip into London market, rights groups say
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In an emailed statement in response to questions, the LBMA said it looked forward to discussing various proposals at an event in London later this week.
The LBMA, which governs access to the world’s largest bullion market, has, in common with other organizations, established initiatives to try to prevent problematic gold from passing through the LBMA’s refiners and into the vaults of banks.
One of these is the LBMA’s Good Delivery List (GDL), which catalogues refiners the body considers responsible sources of gold because of the due diligence systems they have in place.
Once accepted into a vault as Good Delivery, gold can be freely traded between players on the gold market.
The NGOs said that there had been “some slight improvements” in the LBMA’s systems since 2021, but that “many” refiners on list have, in recent years, sourced gold from suppliers linked to money laundering, land and water pollution, or human rights abuses.
This, in turn, allows problematic gold to enter the global market.
The letter cited cases that had been exposed by media or researchers across countries in Latin America, Africa and the Middle East but did not name any of the refiners.
“The LBMA has a key role to play in setting standards for the industry and holding its members accountable,” the groups said in their letter.
Refiners do not engage enough with the communities where the gold they process comes from, the groups said. The voluntary nature of the guidance on what information refiners publish leads to a lack of transparency over the origins of gold.
The letter cited the example of the United Arab Emirates being named in a 2023 report as the country of origin of nearly 150 metric tons of gold sold to GDL refiners in 2021. The UAE does not mine any gold but it has established itself as a hub for gold from all over the world.
“The origin of this gold is not the UAE, it was merely transited through this country,” the letter said, calling for refineries to report the origins of gold publicly.
The LBMA said it would address specific concerns brought up by the groups after a summit on the responsible sourcing of minerals this week.
(By Reade Levinson and David Lewis; Editing by Barbara Lewis)
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