Central banks commit to supporting responsible artisanal and small-scale gold mining
Mon June 17 2024
The World Gold Council (WGC) has announced that four central banks have committed to signing ‘The London Principles.’
This is a set of operating principles to help structure and formalise Central Bank Artisanal and Small-Scale Gold Mining Domestic Purchase Programmes (ASGM DPP). The inaugural signatories are Banco de la República (Colombia), Banco Central del Ecuador, Bank of Mongolia, and Bangko Sentral ng Pilipinas. The commitment of these institutions represents progress towards more responsible gold sourcing practices worldwide.
Artisanal and small-scale gold mining (ASGM) is an important source of livelihood in many gold-producing countries. Some estimates suggest that approximately 15 million people make their living from ASGM. However, it is often unfortunately associated with illicit activities, lack of environmental protection, labour abuses, and other harmful practices. ASGM DPPs offer a route to help bring responsible artisanal and small-scale gold miners into the formal supply chain.
Around the world, some central banks have launched these programmes to buy gold produced by domestic artisanal and small-scale gold miners in local currency. The schemes are mutually beneficial as small-scale miners can sell their production to a trustworthy source that offers transparent buying processes and pricing. In addition, central banks can add gold to their official reserves using their local currency, allowing them to grow their reserve assets without having to sacrifice other hard currency reserves.
Shaokai Fan, Head of Asia-Pacific (ex-China) and Global Head of Central Banks, World Gold Council commented:
“Over the last two years we have worked with central banks who operate ASGM DPPs to exchange best practices and learn from experts. We are pleased to see the group evolve into ‘The signatories of The London Principles’, a trusted circle of central banks who adhere to the most stringent requirements for ASGM DPPs. The participants in this initiative believe that well-structured ASGM DPPs have the potential to contribute to sustainable development, support formalisation, and raise ESG standards.”
David Tait, Chief Executive Officer, World Gold Council, added:
“The World Gold Council is committed to improving transparency, trust and integrity across the entire value chain. By using the market power and visibility of central banks, who are often the largest or even sole legal buyer of ASGM production in their countries, we hope to instill responsible gold sourcing practices in countries where ASGM is prevalent.
“This is a critical moment for artisanal and small-scale gold miners, and we envision that this group of pioneering central banks will provide a blueprint for others that are considering how to help formalise domestic ASGM to the benefit of their economies and the people who earn a livelihood from this industry.”
The 12 London Principles include a commitment to:
Source: https://www.globalminingreview.com/