LBMA investigates Russian gold refiners
LONDON (Mar 4) The London Bullion Market Association (LBMA) has asked six Russian gold refiners its accredits if they have any commercial links with sanctioned Russian entities and if there are any it could affect their accreditation. The LBMA certifies around 70 refineries around the world to produce gold and around 80 to produce silver.
There are six Russian refineries on the LBMA's good delivery list for gold. These are JSC Krastsvetmet, JSC Novosibirsk Refinery, JSC Uralelectromed, Moscow Special Alloys Processing Plant, Prioksky Plant of Non-Ferrous Metals, and Shyolkovsky Factory of Secondary Precious Metals.
All of these except the Moscow Special Alloys Processing Plant are also accredited by the LBMA to produce silver. The LBMA is a trade association whose membership mostly comprises refiners, banks, and traders. Last week, it revoked the membership of three Russian banks, VTB, Sovkombank, and Otkritie, after they were added to sanctions lists.
The loss of LBMA accreditation would make it difficult for the refiners to sell gold and silver in the London market, the world's largest, as major international banks typically only deal with LBMA-approved refiners.
It has been said although these companies would be taken off the LBMA list it has been said they would still find buyers in places such as China and the Middle East. So it could have a small impact on the gold market in general.
Russia is the world's third-largest gold producer, mining around 330 tonnes each year worth around $20 billion at current prices, according to consultants Metals Focus. The nation also produces around 1,350 tonnes of silver a year worth about $1 billion.
LBMA rules state that refineries it accredits "are to comply with all relevant economic/trade sanctions lists."
LBMA's general counsel, Sakhila Mirza said "The good delivery rules are very clear," she added, "We've asked for compliance with our rules."
In Russia, commercial banks buy gold from miners and send it to refineries before exporting it. The Russian central bank is also at times a big buyer and this week said it would resume purchases of gold in the local market.
KITCO
