Key takeaways
- The wholesale market runs on a published physical standard. A bar either meets it or it does not.
- Refiner accreditation, not the seller’s assurance, is what makes a bar acceptable to the market.
- Responsible sourcing is a documented five-step process, and buyers are expected to have performed it.
- Licensing and export authorisation are national. They differ by country and are checked with the regulator, not with the seller.
4 minute read
Most people approaching gold for the first time ask about price. The more useful question is what a counterparty would have to show you before price becomes relevant at all.
There is a published standard, and it is specific
The wholesale gold market is organised around a physical specification rather than a general sense of quality. The London Bullion Market Association operates the Good Delivery standard, and the numbers in it are exact.
This matters commercially because it converts a vague question, is this good gold, into a set of checks anyone can perform. A bar either carries the required marks or it does not.
Verified fact[1]
The minimum acceptable fineness for a London Good Delivery gold bar is 995.0 parts per thousand fine gold.
Verified fact[1]
Gold content must fall between 350 and 430 fine troy ounces, roughly 10.9 to 13.4 kilograms.
Verified fact[1]
A bar must carry four marks: a serial number, the assay stamp of the refiner, the fineness to four significant figures, and the year of manufacture.
The refiner is the reference point, not the seller
A seller cannot make a bar acceptable by asserting that it is. Acceptability comes from the refiner that produced it being accredited, and accreditation is not a one-off event.
For a buyer this reframes the first question. Instead of asking a counterparty to prove the gold, you establish which refiner produced it, and whether that refiner is on the list. That is a check you can complete without the seller’s cooperation.
Verified fact[1]
Refiners applying to the Good Delivery List must satisfy criteria including a minimum level of production and tangible net worth, with a technical assessment of casting, refining and assaying ability.
Verified fact[1]
Accredited refiners remain subject to ongoing testing under the LBMA Proactive Monitoring Programme.
Capital Africa analysis
Material offered outside the accredited refiner chain is not automatically illegitimate, but it does place the entire burden of proof on the buyer. In our experience that burden is consistently underestimated.
Responsible sourcing is a documented process, not a declaration
Anyone buying gold that may originate in a conflict-affected or high-risk area is expected to have carried out supply chain due diligence, and the expectation is defined rather than left to judgement.
The practical consequence is that a signed assurance from a seller does not discharge the obligation. The buyer is expected to have their own process, their own records and, further down the chain, independent audit.
Verified fact[3]
The OECD guidance sets out a five-step, risk-based framework: adopt a policy and build internal capacity; establish supply chain controls and identify red flags; design and implement a risk management strategy; carry out independent third-party audit of refiner due diligence; and report publicly.
Verified fact[3]
The guidance applies to all minerals and is global in scope, with a specific supplement covering gold.
Requires further review
How a given jurisdiction enforces these expectations in practice varies, and this review did not establish enforcement practice country by country. Take legal advice on the obligations that attach to your own transaction.
Licensing and export are national questions
Nothing above tells you whether a specific person may lawfully sell or export gold from a specific country. That is set by national law, administered by a national regulator, and it differs across the markets we cover.
The check is the same everywhere even though the answer is not: identify the regulator, establish what licence the activity requires, and confirm the licence with the regulator directly rather than accepting a document from the counterparty.
Verified fact[5]
In Sierra Leone mineral rights and licensing are administered through the National Minerals Agency and its Mining Cadastre Office.
Verified fact[6]
In Ghana the Minerals Commission regulates the minerals sector, including mineral rights and licensing.
Capital Africa analysis
Where a transaction goes wrong in this region it is more often a licensing or authorisation failure than a metallurgical one. The metal is usually what it is said to be. The right to sell it is frequently not.