Introduction

This is the third report produced by Metals Focus that reviews LBMA’s gold and silver annual country-of-origin (COO) data, which is collected from the Good Delivery List (GDL) refiners. The COO survey started in 2018, which means there is now five years’ worth of statistics to assess, including the first full year of post-COVID data. LBMA’s latest dataset also includes a more detailed breakdown of its recycling category, an explanation of which is included below:

• Unprocessed Recyclable: Gold/silver in their original form, or as fabrication scrap, such as bullion bars, jewellery pieces, coins, or machine turnings, before being returned for processing and refining.
• Melted Recyclable Precious Metals: Gold/silver that have been melted as the initial recycling process and cast into rudimentary bars or other forms with undefined dimensions and varying purity levels.
• Industrial By-products: Materials generated while processing another primary material, but still holding value, examples of which are furnace flue dust, spent crucibles, and floor sweepings.
• Mixed Materials: Materials that combine multiple sources, such as mined and recycled metals.
• Legacy Stocks: Precious metal investment products (e.g., ingots, bars, coins, and grains in sealed containers) held in vaults of bullion banks, central banks, exchanges, and refineries with a verifiable date before 1st January, 2012. These stocks do not require a determination of origin and include those held by third parties on behalf of the listed entities.

As well as providing greater transparency on GDL refining activities, the increased granularity of recycling allows for a better comparison with Metals Focus’ recycling statistics. In last year’s COO review an Appendix was included which compared Metals Focus’ and LBMA’s recycling definitions. For clarity, this has been repeated. Two examples are worth highlighting where LBMA’s greater disclosure is useful, notably “Industrial By-Products” and “Legacy stocks”, which will contribute to a GDL’s recycling volumes. However, both are excluded from Metals Focus’ scrap definition, as LBMA’s industrial by-products are typically generated and recycled within the industry (closed loop recycling) and are therefore not relevant to Metals Focus’ overall supply/demand balances. Legacy stocks are also excluded from their bar fabrication series, which covers retail investment products, and so GDL bars as a whole will fall outside Metals Focus’ market balances.

Despite the recycling breakdown in the COO data, as the following analysis will highlight discrepancies remain between the Metals Focus and COO data, both for mine supply and recycling, as shown in the table below. Looking first at gold, for 2022 Metals Focus report 3,634t of mine production (source: Gold Focus 2024) against a COO total of 1,915t.

Source: Metals Focus, LBMA;

*COO/Metals Focus excludes Russia;
**COO excludes Russia, included in Metals Focus data

The difference reflects three points. The first concerns the processing of artisanal and small-scale mining (ASM). For 2022, Metals Focus estimate this reached 754t, or 21% of global gold mine supply. By contrast, the COO survey indicated that just 51t of this was reported as having been directly processed by GDL refiners. The second point is that, by definition, the COO excludes gold output that will have been treated by non-GDLs, for example in parts of the Middle East or South Asia, given that each region is home to just two and one GDL refiner, respectively. Finally, the Metals Focus data includes 330t of Russian mine output, where the COO data captures just 1.5t. This reflects the impact of the suspension of Russian GDLs in March 2022 following the invasion of Ukraine.

In terms of gold recycling, the respective Metals Focus and LBMA totals for 2022 are 1,140t and 3,428t. Unsurprisingly, even if we look at just the COO “unprocessed” and “melted” categories, of 2,174t and 1,029t, respectively, the combined total of 3,205t still far exceeds that of Metals Focus. This partly reflects the melt of 400oz GDL bars that were produced after 31st December 2011 (as a reminder, the COO category, “legacy stocks”, covers the melt of pre-1st January 2012 GDL bars). A good example of this is the 208t of unprocessed gold of UK origin, which would overwhelmingly capture the melt of 400oz bars withdrawn from London vaults.

With regards to silver, and looking first at mine supply, Metals Focus estimated a 2022 global total of 26,025t, against 17,870t that was captured in the COO dataset. For recycling, the respectively totals stand at 5,506t and 14,482t. These may appear far apart, but when combined we arrive at 31,558t for Metals Focus and 32,352t for LBMA. One key reason that the gaps have narrowed so much is that processing of base metal concentrates in the COO survey are often classified as recycled material, rather than mine production. To put that into context, for 2022, Metals Focus estimated that 56% of total silver mine supply was derived from base metal mine production, or 14,626t.

Source: LBMA