Ghana is applying the London Bullion Marketing Association (LBMA) standards to the refining of locally sourced gold to ensure adherence to responsible practices in the artisanal and small-scale mining (ASM) space.
The measure is also to support efforts for the country to secure the LBMA certification which would boost the value the country derives from its gold exports.
The Chief Executive Officer (CEO) of the LBMA, Ruth Crowell, has consequently praised the government of Ghana for ensuring the highest standards in the sourcing of gold from the ASM space.
“I think the work by the government of Ghana has been excellent,” she said in an interview with journalists familiar with mining developments in Africa.
“I think it is an excellent case study to demonstrate not just to other African nations but to the wider world how you can source responsibly from one of the most challenging sectors of the gold market, in terms of artisanal, small-scale gold,” Ms Crowell stated.
The LBMA is an independent precious minerals authority which determines quality standards in the precious metals space. Its certification guarantees premium prices for the precious mineral.
The Ghana Gold Board (GoldBod) and Gold Coast Refinery signed an agreement in January this year for the refining of 1,000 kilogrammes – equivalent to one tonne – of locally sourced gold per week.
Following the agreement, Gold Coast Refinery signed a further agreement for supervisory services with Rand Refinery of South Africa, a subsidiary of the Rand Corporation mining outfit, which is Africa’s leading LBMA good delivery accredited refiner.
Rand Refinery thus provides technical, operational and commercial supervision for the refining of state gold by Gold Coast Refinery.
Gold sourcing
Of concern in the gold sourcing and refining space is how the LBMA could bring responsibly sourced ASM gold into the formal market without compromising standards, given that the subsector supports millions of livelihoods, particularly in Africa.
Ms Crowell said it would be a bigger risk to ignore gold production from ASM.
“If we continue to ignore it, it will become a bigger and bigger security concern, not just in centres where criminals are operating, but also on the ground, because people are desperate.
It’s a question of trying to get focused, a bit like what Rand Refinery has done in Ghana, to say this is what we can take, this is what we’re not going to take, and to show a case study that you can make good business because until recently, illicit business has been pretty good business,” she said.
Wide discussion
In the encounter with the media that discussed the Ghana story in the context of responsible mining practices, Ms Crowell spoke
about Rand Refinery’s high standards in ensuring responsible sourcing of gold.
“I think it’s also Rand Refinery taking the view that we’re not going to take everything. We need some due diligence,” she said.
“It’s got to be legal, it’s got to be free of mercury. It is about how we improve progressively and try to change the status quo,” she added.
With new and emerging African refineries seeking deeper integration into global markets, they are required to align with LBMA standards to ensure that such partnerships translate into long-term credibility and international market access.
“I think it’s not just LBMA standards; it’s also global standards like the OECD (Organisation of Economic Cooperation and Development).
That’s something that I think any centre, any refiner, trying to be ambitious and successful should adopt.
“What’s exciting about the Rand Refinery partnership in Ghana is also that Rand Refinery sees this as a Ghana story, and ultimately they agree with the ambition that they would like to see Ghana’s Gold Coast Refinery apply to be an LBMA good delivery refiner,” Ms Crowell said.
Gold has seen perhaps its best trading value recently as prices reached $5,000 per ounce on the international market.
Nonetheless, speculations have remained about the sustainability of the precious metal as a store of value in the long term, given its price volatility.
“At $5 000/oz, gold is incredibly mainstream. Investors all over the world are re-looking at gold; in a way it was discounted as fringe.
It’s incredibly mainstream, and there’s a lot of reasons for that.
The geopolitical landscape, the macroeconomic landscape, but also realising when it comes to central banks and portfolios, gold is money, everything else is credit, especially in a world where you’re trying to go for more of a neutral approach, and you’re not sure about the future,” the LBMA CEO said.
“There is stability and a safe haven aspect that continues to play a role, but I would say the West is really just starting to wake up to gold being a valuable part of the portfolio, as a key diversifier and not just a safe haven,” Ms Crowell added.
Source:
www.graphic.com.gh