Responsible Sourcing Overview

The LBMA Programme plays a fundamental role in providing trust and confidence in the global precious metals market. All Good Delivery List (GDL) Refiners must comply with the Responsible Sourcing requirements, or risk losing their GDL accreditation.

Our first Responsible Sourcing Report, published in 2020, explains in detail about the GDL, the Responsible Sourcing Programme and the requirements.

However, an important point to note is that LBMA standards continue to evolve, as the Executive strives for better standards, acts on feedback and encourages greater adherence. In 2022, this could not be truer, as we have launched several consultations asking for feedback on our next version of the Good Delivery List Rules, the Global Precious Metals Code, the Disclosure Guidance to support the Responsible Sourcing Programme, and soon the Third Party Audit Guidance.

Refiners source their gold and silver from many different sources. These can largely be broken into:

  • Mined Material Large-Scale Mining (LSM)
  • Artisanal and Small-Scale Mining (ASM)
  • Mining By-product and Recycled Material (unprocessed, melted, industrial by-product, jewellery, electronic scrap, etc.).


Each source poses different risks and challenges, and all Refiners are required to address this as part of their due diligence assessments.

Building leverage across the value chain, and with key actors in the Responsible Sourcing Eco-system, has always been an ongoing focus for LBMA. Although LBMA administers the Good Delivery system, ultimately, the responsibility to ensure gold and silver is ethically sourced is shared across the entire industry and with the authorities in relevant jurisdictions. The LBMA programme is therefore part of a much wider ecosystem which has four key components: National Authorities, Downstream and Upstream Actors, Civil Society and the Industry Programmes.

This year, the signature focus of the Responsible Sourcing Programme (RSP) has been an initiative to consider practical and realistic ways to address the barriers to legal markets for legitimate material from the ASM sector. Doing so is a big step forward in achieving our strategic goal of supporting the ASM sector.

Artisanal and Small-Scale Mining: Engaging Responsibly


The ASM sector experiences many reputational and logistical challenges that serve to stigmatise and marginalise that supply chain. Despite employing an estimated 15 million miners and producing between 15% and 20% of the world’s annual gold production, LBMA's 2020 data showed only 2.4% of ASM gold came through GDL Refiners, compared to Metal's Focus' 2020 data. These figures demonstrate the stark challenges and realities facing the sector: most GDL Refiners have chosen a policy of avoidance over engagement, or even risk mitigation.

There are several reasons why GDL Refiners have traditionally shied away from the ASM sector, the most notable of which is that the associated reputational risks may threaten a Refiner’s GDL status.

The key concerns with this approach are as follows:

  • Market exclusion reinforces the economic and political marginalisation of the sector and the communities involved, disincentivising producer countries to formalise miners or implement a supportive legal and regulatory framework within which miners can more safely work.
  • There are ongoing environmental concerns, given the poor environmental conditions under which ASM material is often produced, especially the widespread use of mercury.
  • It also undermines peace and security in high-risk areas by potentially fuelling corruption or funding conflict, thus requiring heightened due diligence requirements for businesses.
  • Most critically, it poses a legitimate governance issue for the gold industry and end users. ASM material still gets into legitimate global markets via trading centres with lax due diligence requirements. There it gets relabelled as Recycled Material, masking its origins, and bypassing any semblance of due diligence. None of this is in the interests of the gold industry.
  • The loss of tax revenues through smuggling further undermines the economic sovereignty and the ability of producer governments to use those revenues for the public good, thereby, perpetuating underdevelopment and insecurity.


To guide our thinking, LBMA turned to Phuzumoya, a South African based consulting firm, to examine commonly understood and accepted obstacles that GDL Refiners face sourcing ASM material – and to consider practical and actionable methods and approaches by which LBMA could provide better market access and legitimacy to the ASM sector.

Phuzumoya is well placed to provide this advice. Its principal researcher, Gregory Mthembu-Salter, is a former member of the UN Group of Experts to the Democratic Republic of Congo and one of the original architects of the OECD Due Diligence Guidance.

LBMA’s ASM initiative was launched at the Responsible Sourcing and Sustainability Summit, co-hosted by LBMA and the World Gold Council in March 2022. The event brought together some of the leading minds and practitioners in the ASM sector to discuss key obstacles and opportunities in the ASM sector.

One question that is often asked about this initiative is ‘why?’, or more specifically, why should LBMA and GDL Refiners invest time and resources trying to source ASM material directly – with additional due diligence costs and burdens – when it can be easily found in secondary markets?”

The simple answer is that the continued stigmatisation of ASM material has several negative implications for the gold sector writ large.

Through the ASM initiative, LBMA plans to start addressing the challenges and obstacles that prevent artisanal gold being directly sourced by our refiners.


The ASM Report

Phuzumoya identified several promising avenues of opportunity for LBMA and GDL Refiners to pursue in future years. The biggest takeaway from the report is that for the initiative to succeed, it will require outreach by LBMA to willing producer governments and GDL Refiners to agree and establish more ASM-friendly regulatory regimes. This engagement will also require the active participation of donor governments, and UN agencies such as UNEP, to help facilitate the implementation of these regimes.

The report also recommends greater discussion with WGC members – many of whom possess significant economic and political capital in the countries in which they operate and could leverage more desirable regulatory conditions that would encourage and allow for greater co-operation between ASM and industrial miners working on or near each other’s concessions.

The most significant recommendation, however, was that LBMA should consider establishing a Good Delivery List for processors and intermediate refiners, whose members would (as a condition of membership) conduct due diligence on their ASM suppliers. Such a List would provide Refiners with additional due diligence comfort, result in greater volumes of material (running into the tonnes) and would be easier for LBMA to assess as part of the annual third-party audits. The List would build on the model championed by PX Précinox (a Swiss GDL Refiner) and the Responsible Mineral Initiative’s work with aggregators.

Over the last decade, there have been multiple ASM interventions focused on the Democratic Republic of Congo – largely due to the central role the civil war there played in demanding improved business conduct and supply chain due diligence. Going forward, LBMA has been urged to look to countries such as Colombia, Ghana, Nicaragua and Peru as entry points for engagement, as governments and industrial producers there have demonstrated a more constructive approach and willingness to advance ASM reforms.

In addition to Phuzumoya’s report, LBMA also struck an ASM Working Group Plus, comprised of GDL Refiners and NGOs with an established track record of working to create responsible ASM supply chains in Africa and Latin America. These groups include IMPACT, Levin Sources, ARM and the Swiss Better Gold Initiative (SBGI). The terms of reference for this working group will be to foster information sharing and co-operation between Refiners and ASM experts, and to guide LBMA in the implementation of some of the recommendations made by Phuzumoya.

Looking Forward

Looking forward to 2023, LBMA plans to create the parameters of what a GDL for ASM aggregators could look like and how it would function. Much of next year will be focused on developing an implementation plan that also focuses on outreach to ASM-producing countries and private sector actors interested in collaborating with LBMA and subscribing to high sourcing standards.

This outreach will also include extensive public communications – with GDL Refiners, in forums such as the annual Responsible Minerals Summit hosted by the OECD, as well as through media channels – to reimagine how ASM is perceived and portrayed.

If we are to change the status quo, we will have to nurture trust and engagement between refiners and ASM actors.

Alan Martin, Head of Responsible Sourcing, LBMA

Building Leverage to Eliminate Gold Laundering and Support Responsible ASM

The IBC Recommendations – first launched in November 2020 – continue to be our signature effort to ensure the consistent implementation of OECD standards across all the major gold trading centres.

The IBC Recommendations identified three main priorities: addressing the risks that arise in relation to sourcing recycled gold; eliminating cash transactions; and supporting responsible Artisanal Small-scale Mining (ASM).

In 2022, we developed a methodology to review each IBC’s development and implementation of the OECD Guidance. We hired a consultant to provide an independent review of each IBC. This work is ongoing and LBMA expects it will be completed in early 2023. Once completed, these assessments will help LBMA to have a better-informed conversation – individually and collectively – with the IBCs on how we can support them in addressing any identified gaps.

To date, co-operation with the various IBCs has been positive and constructive.

In parallel to this outreach, LBMA was pleased to participate in two intergovernmental meetings hosted by the OECD that focused on promoting and disseminating responsible business conduct in international gold trading centres (IGTCs). These meetings were a response to the increasing attention that is being paid to risks associated with the production and trade of gold in these centres. Rights abuses and financial crime linked to illicit mining and trade impact the ability of trading hubs to attract investment, collect taxes and avoid volatility in domestic gold prices.

LBMA also continued its association with the informal Law Enforcement Network, co-convened by the OECD, the World Customs Organization and the UN Office on Drugs and Crime. The Network has served as a critical forum for information sharing across a range of industry groups, international organisations and enforcement agencies.

Furthermore, see table in section 7 on all the outreach by the LBMA team since October 2021.


LBMA is in the final stages of becoming a recognised audit scheme under a law that governs the importation of conflict-affected minerals (tin, tungsten, tantalum and gold) into the European Union.

As part of the accreditation process, five GDL Refiners are required to have their annual assurance audits shadowed and assessed by Kumi Consulting, a firm hired by the EU. The shadow audits are part of a larger assessment of the Responsible Gold Guidance’s alignment with the OECD Due Diligence Guidance.

Lockdowns and travel restrictions caused by the COVID-19 pandemic significantly delayed the completion of the shadow audits until August 2022. LBMA expects a provisional assessment before the end of 2022.

Suspension of Russian Refiners

A week after Russia’s invasion of Ukraine in February 2022, and in light of sanctions imposed by European and North American governments, LBMA moved to suspend all six Russian refiners in the interests of ensuring an orderly market.

The suspension affects the following refiners:

  • JSC Krastsvetmet (gold and silver)
  • JSC Novosibirsk Refinery (gold and silver)
  • JSC Uralelectromed (gold and silver)
  • Moscow Special Alloys Processing Plant (gold)
  • Prioksky Plant of Non-Ferrous Metals (gold and silver)
  • Shyolkovsky Factory of Secondary Precious Metals, SOE (gold and silver)

These refiners had a combined production equal to approximately 10% of global annual supply. Gold produced by these refiners after 7 March (the date of the suspension) will no longer be accepted as Good Delivery by the London bullion market until further notice.

Since the suspension, LBMA has worked with GDL Refiners, the media and government regulators to explain the implications of this decision and subsequent rounds of sanctions that specifically targeted the broader Russian gold sector.