Alan Martin, Responsible Sourcing Manager, LBMA
A year ago, in the course of my past work as an investigative researcher, just before the Coronavirus shut the world down, I had a front row seat to a gold deal in Nairobi. On the table was 35kg of gold, consigned to two nervous youngsters who were the diaspora of a village cooperative in Eastern Congo. From start to finish, the trader had the upper hand, negotiating the price lower with each quibble about purity and the risks he would bear getting the gold to market. The sale—what the trader called “routine”—was finally agreed at $1.1 million cash, far below its true value. This trader—like others I have met in Kampala or Kinshasa—will insist that he is simply a middleman, connecting miners to the international gold market. He is unlike the predatory militias or criminal networks that control many mine sites.
In my new role as responsible sourcing manager, I have often thought about those transactions and how it could inform the current revision of the Responsible Gold Guidance, and LBMA’s commitment to refine more responsibly sourced artisanal mined material (ASM).
At one level, there is no reason to doubt him. His business is legally registered with the relevant government agencies. He operates in public view, not the shadows. But challenges of this ‘market’ is not black and white, but rather differing shades of grey. Traders are often the lynchpin between the miners and the refiners, between both illicit and legal gold markets; and they are often absent from the important discussions and debates that occur at the OECD or other fora we inhabit.
How can LBMA and individual refiners better engage with traders to incentivize them to source more responsibly? If there are limits to what audit programs can do, what other tools and mechanisms could help to manage or mitigate high risk indicators? What role can the LBMA play in supporting access to GDL refineries by the ASM sector? How can governments be better supported and encouraged to adopt practical policies that deliver on economic promises and defend the integrity of the bullion market?
With these questions in mind, I recommend a recent report by The Sentry: Conflict Gold to Responsible Gold, A Roadmap for Companies and Governments.
We welcome your thoughts on this, and ways to improve the RGG. I look forward to the conversation. Reach me at alan.martin@lbma.org.uk.
LBMA Updates
This month LBMA has focused on finalising the workplan for revising the Responsible Gold Guidance. LBMA will be convening a RGG version 9 Working Group to provide important feedback and advise on the practical implications of the proposed changes. The draft will then go through a public consultation, and we would welcome feedback from as many stakeholders. The public consultation will take place between Q2-Q3. Please contact Alan Martin for more information.
Our work on International Bullion Centres has also gained positive engagement from all the Centres. The recent article in the quarterly SBMA publication "The Crucible" provides the background to this work and explains the overarching objective.
Finally, if you would like us to feature any interesting news items about initiatives you’re engaged in or notable achievements, please email alan.martin@lbma.org.uk.
LBMA's Ninth Assaying & Refining Digital Conference
Please join us on 15 -17 March as we take our Assaying and Refining Conference online. This event offers sessions from market experts representing refiners, academics and technical analysts. The cutting-edge presentations range from how to manage exposure to harmful contaminants in the refining process to new scientific approaches in geoforensics of mined gold. See the full programme here.
Responsible Sourcing Programme: 2020 Audit Extensions
Given the ongoing challenges caused by COVID-19, we are providing an optional three-month extension to the usual audit submission deadlines. We hope this will allow refiners to organise in-person audits as travel restrictions begin to ease. Please contact Alan Martin for more information.
EU Conflict Minerals Regulation
The Conflict Minerals Regulation came into effect in January. Read through LBMA’s Frequently Ask Questions which aim to help answer any questions on new requirements and reporting obligations for importers under the Regulation.
LBMA’s RGG continues to be assessed by the European Commission (EC) as a recognised industry due diligence scheme. The recognition process, which requires RGG in-person audits to be shadowed by the EC’s representatives, has been delayed due to travel restrictions. LBMA will provide regular updates once the shadow audits have been performed and the EC can continue the recognition assessment.
The current lack of recognition by the EC does not mean there are additional requirements on importers under the Regulation. Importers can continue to rely on the RGG as a part of their wider due diligence systems. Ultimately, the obligation is on the importer to satisfy itself that appropriate due diligence has been carried out and the relevant risks have been mitigated.
ASM News
Kenya: State moves in to promote small scale mining, The Star
Zimbabwe: Women in mining remain vulnerable, News Day
You can access LBMA's disclaimer on third party content here.
ESG News
Worldwide: Why Jewellers Need to Vet their Global Supply Chains, Mail & Guardian
Worldwide: For Valentine’s Day, Traceable, Transparent Jewellery Supply Chains, Human Rights Watch
Worldwide: Most miners lag behind in human rights issues — report, Mining.com
Worldwide: We need raw material diplomacy, not conflict, International Politics and Society
Venezuela: Human Trafficking Accompanies Illegal Mining in Venezuela’s Orinoco, InSight Crime
Zimbabwe: Striking a balance between recovery and human rights in Zimbabwe's mining sector, BHRRC
Zimbabwe: Illegal Mining Activities Threaten Covid-19 Fight, The Herald
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Other Responsible Sourcing News
Worldwide: Responsible gold sourcing: the gold standard in bullion sourcing, Shares Magazine
Worldwide: Silver's Clean Energy Future, Sprott
Australia: Clean energy future for gold, Gold Industry Group
Colombia: Country Loses Billions to Illegal Gold Trade, OCCRP
Colombia: Authorities dismantle illegal mine funding powerful drug cartel, Mining.com
DRC: Battery metal demand to boost DRC mining, Mining Weekly
Northern Ireland: Importing ‘Conflict Minerals’ into Northern Ireland, Gov.uk
South America: Mining the Amazon brings low returns for local communities – study, Mining.com
South America: Brazil's Bolsonaro renews push to allow mining on indigenous lands, BNAmericas
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Webinars & Events
26 February: Social taxonomy - how might it look like, European Commission
4 March: Anti-Money Laundering Seminar, IPMI
15-17 March: Assaying & Refining Digital Conference, LBMA
23-25 March: Global Anti-Corruption & Integrity Forum, OECD
7 April: Human rights due diligence along the value chain: The essentials, Systain
19-21 September: Global Precious Metals Conference, LBMA/LPPM
18-21 October: Responsible Business & Responsible Minerals Conferences, RBA/RMI
You can access LBMA's disclaimer on third party content here.
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