Towards an LBMA Good Delivery List for Artisanal and Small-Scale Responsibly Mined Gold
5. Going further
Our intention has been to explore ways within existing parameters in which the LBMA and its members can increase the flow of responsibly mined ASM gold into GDL refiners. These parameters include the current state of relations globally between LSM and ASM and the largely compliance-focused approach taken by the LBMA and its members with regards ASM. This brief section seeks to point beyond these parameters, to where the possibilities might be for new approaches and new partnerships.
The whole issue of sourcing from responsibly produced artisanal mines, not just for gold but for other minerals too, largely started in the DRC, following concerns raised by the UN Group of Experts and others over a decade ago about the role of artisanally-mined minerals in financing armed groups there. Much of the subsequent discussion, debate and effort to remedy this has also been focused on the DRC. Today, several donor-funded programmes are at work that seek to boost the output and take up of responsibly mined ASGM in the DRC. However, as those implementing these programmes will attest, the DRC is a particularly challenging environment to do this. Aside from the many logistical challenges, there are multiple, highly complex natural resource governance challenges that must also be confronted there, in a regulatory environment that is difficult, and is hostile to LSM/ASM cooperation. Put simply, the opportunities for boosting responsible ASGM in the DRC to the point that GDL refiners can offtake with confidence may be characterised as “high hanging fruit” – they exist, but they are not easy to grasp.
Other ASGM-producing countries, however, have more ASGM-friendly regulatory environments, where it may be more feasible for the recommendations in this report to be implemented. We have already cited the examples of Nicaragua, Colombia and Peru, where the regulatory environments for ASGM appear already to be sufficiently accommodating to enable refiners, and/or crude refiners and processors, to conduct due diligence on ASGM suppliers, and have noted too the apparent willingness of the Ghanaian government to improve the regulatory and operational environment for ASGM. Also in Africa, Dynacor isshowing an interest in establishing a processing plant in Senegal to supply PX Precinox,
along the lines of what it already does in Peru.
Some refiners have expressed scepticism to us that crude refiners and processors will ever be interested in investing in the systems that would be required for their eligibility for a processors’ GDL, arguing that these processors are already able to supply non-GDL refiners with none of these requirements. We agree that many, if not most crude refiners and processors will see little value in joining a GDL to enable them to supply GDL refiners. But it will not be true of all of them. Intermediate refiners have, after all, already demonstrated their preparedness to undergo RMAP audits. Additionally, we have spoken to crude refiners who have expressed significant interest in a processors’ GDL, on the grounds that their membership would raise their profile and reputation and give them better access to GDL refiners. We therefore recommend that the LBMA and its members actively seek out and encourage such crude refiners and processors, particularly in ASGM-accommodating regulatory environments, with a view to exploring innovative collaborations, mentorships and partnerships. Such partnerships could encourage processors progressively to improve the due diligence they conduct on their ASGM supply chains, to the point that GDL refiners could source from them in good faith.
This process would be encouraged by the LBMA taking a lead in exploring how it and its members could in practice begin to move beyond the current largely compliance-focused approach to ASGM engagement, towards a shared commitment to progressive improvement via mentoring and other partnerships, such as are envisaged in the OECD Responsible Minerals guidance. This shift needs to be reflected in subsequent versions of the RGG.
Again in the spirit of going further, we would encourage the WGC to explore with its members the implications of its excellent recent report on LSM/ASM relationships, with a view to identifying potential pilot projects where new types of relationship could be tested. These pilots could include the model advocated earlier in this report, where LSM miners buy or toll treat ore from artisanals on their concessions. The pilots could be developed in cooperation with the LBMA and its members, in a bid to ensure that resulting ASM gold is refined by GDL refiners.