2. Gold

Source: Metals Focus, LBMA; *LSM plus ASM

• Artisanal & small-scale mining: The CoO survey asks the GDL operations to detail their intake of ASM material. However, the reported volumes have always been trivial and 2023 was no exception; just 44t was reported, a drop of 2% year-on-year.
  To put the CoO ASM total into perspective, Metals Focus’ research of ASM volumes, based on our analysis of trade flows and feedback from our contact network across global supply chains, points to an estimate of 751t in 2023 for global ASM output. This indicates that most ASM is treated by non-GDL refiners (see below for more on this).
• Russian mine supply: Following Russia’s invasion of Ukraine its six gold and silver GDL operations were suspended by LBMA in March 2022. As a result, the CoO data no longer includes Russian activity from that year onwards, which creates another gap between the two organisations’ mine supply series. According to Metals Focus’ estimates, Russian gold mine supply in 2023 totalled 322t. During 2018-23, the timeframe for which global CoO data is available, Russian mine output averaged 323t.
• Non-GDL refining: The CoO data captures activity at 66 gold and 82 silver GDL refiners. It therefore excludes mined (both LSM and ASM) and recycled material that is treated at non-GDL operations. For example, while there are no GDL entities in the UAE, there are around 16 non-GDL refiners active there, with an estimated refining capacity of 2,000t. In India, there is one GDL gold refiner (and four silver), out of roughly 55 registered Indian gold refiners, with a combined capacity of perhaps 1,500-2,000t.

Even so, at the country level, one notable change arising from the new CoO categories (introduced for the 2022 survey), was a sharp drop in LSM feed reported by Chinese-based GDL refiners for the CoO survey. In particular, their 2022 and 2023 volumes were 191t and 157t lower, respectively, compared with the 243t reported for the 2021 CoO survey. The combined “Unprocessed” and “Melted” categories for 2023 totalled 693t for the Chinese GDL entities, against 465t reported in 2021, which does indicate that some of their feedstock has been re-categorised as “Unprocessed” and/or “Melted”. However, it is worth bearing in mind that Metals Focus also reported a sharp jump in Chinese gold recycling in 2023, which makes it difficult to make a direct comparison.

Source: Metals Focus, LBMA

Looking first at Australia, the 253t of LSM reported in the CoO series compares well with Metals Focus’ 296t for 2023. Some of the difference reflects how some Australian base metals concentrates are first treated and how, in turn, the origin of that semi-refined gold is then assessed.

Turning to African gold mine supply, the CoO data reveals 469t treated by GDL refiners in 2023, against a regional total of 997t estimated by Metals Focus. Importantly, the Metals Focus total for LSM production comes to 505t for 2023, which indicates that the vast majority of African LSM is treated by GDL refiners. Interestingly, the CoO ASM total stands at just 2t, which suggests this material is mostly processed by non-GDL operations.

Looking at some of the key African gold producers, Ghana offers a good example of the gap between the two series. The 2023 CoO total reveals 87t of LSM and 0.6t for ASM. This compares with Metals Focus’ total for Ghana of 131t. The LSM CoO total almost matches the 89t captured by Metals Focus across 14 projects operating in 2023, the most noteworthy being Newmont’s Ahafo operation (18t) and the Gold Fields/Government of Ghana Tarkwa joint venture (17t). The balance consists of Metals Focus’ ASM estimate, none of which it seems was processed by GDL refiners.

A similar dynamic occurs in Burkina Faso. The CoO LSM total of 50t actually falls short of Metals Focus’ 66t of LSM output in 2023. For context, this spans 12 operations, most notably the IAMGOLD/Government of Burkina Faso joint venture Essakane mine (13t) and the Endeavour Mining/Government of Burkina Faso joint venture Houndé operation (10t). However, the main difference concerns ASM, none of which is captured in the CoO data suggesting this is entirely processed by non-GDL refineries.

The CoO mining breakdown for South America reads as 228t of LSM and 25t of ASM, against a global total estimated by Metals Focus of 534t (combining ASM and LSM). Metals Focus’ primary gold and silver LSM database generated a total of 278t of gold mine output in 2023. Taken at face value, this suggests that 82% of LSM supply was treated by GDL refineries in 2023, while very little ASM was processed by a GDL operation as Metals Focus’ estimated this at around 250t. There is also some gold concentrate production in the region. As a reminder, this could potentially be treated outside South America. The refinery taking the processed gold
doré may decide that the origin is the plant where the concentrate is first treated, not where the concentrate was mined. This is another reason why the CoO LSM total falls short of Metals Focus’ gold mine production estimate for the region.

Peru is also worth highlighting in this report. With 20t of ASM it accounted for 45% of the total CoO ASM processed in 2023. In terms of LSM, Peru’s outturn of 55t is a little higher than the 45t estimated by Metals Focus. Overall, Metals Focus estimates that total Peruvian gold mine supply in 2023 stood at 129t, well in excess of the COO mining total of 74t.

Finally, the Indonesian LSM data requires a closer look, given that the CoO survey shows a 56% year-on-year decline against a 2% lift reported by Metals Focus in 2023. Neither appears related to changes in concentrate versus doré output, with respective year-on-year changes of -4% (to 74t) and +11% (58t), for a country total of 132t, according to Metals Focus. As such the reported CoO total of 15t suggests that an increasing share of the country’s mining outturn was processed at non-GDL operations. (It is worth noting that the “unprocessed” CoO category, of 26t in 2023, was unchanged year-on-year, a volume that we also believe is mine supply.)