【London, UK】LBMA’s ASM Initiative

The LBMA is supporting the creation of formalised, responsible pathways for Artisanal and Small-scale Mining to enter professional markets.

The LBMA’s ASM Initiative was officially launched in 2022 with a clear mission: to examine the longstanding challenges associated with Artisanal and Small-scale Mining (ASM) while supporting the creation of formalised, responsible pathways for ASM gold to enter the LBMA Good Delivery supply chain. In the past, rigorous responsible sourcing standards and concerns over reputational risk inadvertently marginalised ASM miners from formal markets.

After all, the alternative carries the proven risk of pushing responsible miners into unsafe and exploitative conditions whilst driving production into illicit channels, undermining efforts to promote responsible sourcing.

At the time of launching the ASM Initiative, LBMA Good Delivery List (GDL) Refiners’ ASM throughput was less than 1% of production. The independent feasibility study, commissioned by LBMA in 2022, examined the obstacles to ASM gold being refined by GDLs and proposed a number of recommendations to increase the amount of responsibly sourced ASM material entering GDL production. The LBMA Board responded to these recommendations. The ASM Task Force was born and, following desk-based research—later followed up by on-the-ground initiatives—a few countries were prioritised for engagement.

The Bangko Sentral ng Pilipinas (BSP), the country’s central bank, is the only central bank in the world from a country with vast gold deposits, a well-established ASM tradition, which is also a member of the GDL and responsibly sources domestically produced ASM gold. During late May and early June, the LBMA’s ASM Initiative trained the BSP in using the ASM Toolkit and explored the ways in which this could enable the bank to source more of the country’s ASM gold, while still maintaining strong responsible sourcing standards. The training identified multiple possibilities, which the BSP is currently assessing internally for feasibility.

One of the BSP’s responsible sourcing innovations is to licence as a buyer PJLI, a local company with an extensive network nationwide of 3,500 pawnshops. Previously, the BSP has had to rely solely on the purchasing of its five buying stations. The PJLI is able to offer a degree of financing for ASGM, developing customised finance packages to provide both short-term liquidity and longer-term pre-finance. This is a potential gamechanger—the lack of legal, accessible credit for ASGM is a major obstacle to the formalisation and responsible growth of the sector.

The LBMA ASM Initiative visited Peru in October 2024, engaging with a wide range of stakeholders, and has since then remained actively engaged. Both during the visit and after, there has been close cooperation with the Swiss Better Gold Association (SBGA) in Peru. The SBGA is helping its members to implement LBMA’s ASM Toolkit, and has also worked to extend its programme to processing plants. The LBMA ASM Initiative presented to a conference of processing plants during the visit, and visited several operations, some of which already supply the GDL. Following this, we are developing a standard for processing plants that incorporates the ASM Toolkit, and specific Peruvian risks. We have also conducted detailed research on the presence of ASM miners on LSM permits, identifying which LSM operators are currently sourcing from ASM, and which are not but might do so, with a view to engaging on the potential for responsible sourcing.

Ghana is the sixth largest gold producer in the world, and the largest in Africa, with an estimated output of 151 metric tons in 2024, of which the country’s authorities reckoned 66 tons were mined by ASGM miners. Between 1-2 million people are thought to be active in the country’s ASGM sector. Historically, the Ghanaian government has had an adversarial relationship with the ASGM sector, but in 2018 the administration changed course, launching a new initiative intended to expand legal Small-Scale Mining (SSM) while continuing to combat illegal operators. The government’s pivot created a space for the LBMA ASM Initiative and several GDL Refiners to engage with the country’s ASGM sector, and much work has been expended since identifying and seeking to build relationships with legal, responsible ASM operations. Several such operations have been identified, and there has, encouragingly, been some sourcing of their output by the GDL, including on behalf of the country’s central bank, the Bank of Ghana (BoG), which is building its gold reserves in part with ASM gold.

The legislative environment for ASGM changed significantly this year with the passing of a new Act requiring the country’s newly established Gold Board to purchase all of the country’s ASGM output. We are now exploring with the Gold Board and government the implications and opportunities of this important change for responsible ASM sourcing and LBMA.