London Bullion Market clamps down on illicit gold trade
Recommendations by the London Bullion Market Association (LBMA) to foster responsible sourcing by international bullion centres can help to reduce the illicit trade in gold mined in the Democratic Republic of Congo (DRC).
The LBMA, the global authority for precious metals, in November published recommendations for bullion centres such as Dubai with three main aims: the responsible sourcing of recycled gold, eliminating cash transactions and support for artisanal and small-scale mining.
The LBMA says it will only permit its Good Delivery List (GDL) refiners to source material from bullion centres which meet OECD standards.
According to The Sentry, an investigative and policy group, 95% of the gold mined in east and central Africa reaches Dubai, where it enters international markets. Armed groups and criminal networks benefit from the trade, The Sentry says. The UN says that conflict gold provides the largest source of revenue to armed groups in the eastern DRC.
The LBMA initiative is welcomed by Joanne Lebert, executive director of the Canadian conflict minerals research group IMPACT, who notes the association’s traditionally conservative stance.
“The centres are the ones that can address the issues most directly,” she says. “Expectations have not been communicated so directly in the past. The world now knows we have a serious problem.”
The LBMA recommendations exclude artisanal and small-scale mining (ASM) from the no cash transactions policy. Lebert argues that there is ultimately a need to go beyond compliance issues and address wider development aims. Otherwise, she says, the process risks becoming no more than “white-washing for companies.”
According to USAID, at least 40 million people globally work directly in ASM, and between 30% and 50% of them are women. They can benefit disproportionately in financial terms.
Researchers led by Doris Buss at Carleton University in Canada have found the women in ASM in Uganda can earn 335% more at a mine site compared with non-mining activities, while men earn 65% more.
But Buss’s research found that licenses in the DRC, Rwanda and Uganda were expensive and out of reach for most women.
