LBMA Suspends Shandong Gold Smelting After US Forced Labor Listing

The London Bullion Market Association (LBMA) has suspended Shandong Gold Smelting Co. Ltd from its accredited Gold and Silver Good Delivery Lists, the organization announced Tuesday. The action follows the Chinese refiner's addition to a U.S. government list of entities linked to forced labor.

Suspension Follows US Designation

The suspension, effective Wednesday, was triggered by Shandong Gold Smelting's inclusion on the U.S. Uyghur Forced Labor Prevention Act (UFLPA) Entity List. In response, the LBMA, which oversees the global wholesale market for gold and silver, has invoked an incident review process.

According to the LBMA, the suspension is an interim measure that will remain in place pending the completion of its review. The process involves consultation with a range of stakeholders to assess the situation under its Good Delivery Rules and Responsible Sourcing Programme.

Market Implications

Inclusion on the LBMA's Good Delivery List is a crucial accreditation for precious metals refiners. It certifies that their bullion meets the stringent quality and ethical standards required for trading on the London market, a primary global hub for precious metals.

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Losing this status, even temporarily, is a significant blow. It effectively prevents a refiner's bars from being accepted in the mainstream London market, potentially disrupting its international operations and damaging its reputation among institutional investors and trading partners who rely on the LBMA's standards for compliance.

Company Response

In a statement included in the LBMA’s press release, Shandong Gold Smelting said it "firmly rejects its inclusion on the UFLPA Entity List."

The company added that it "welcomes a fair, independent and objective review by LBMA." The LBMA has stated it remains focused on a transparent process and will provide further updates in due course.