By Peter Hobson
LONDON (Reuters) – The London Bullion Market Association (LBMA) said on Monday it had suspended its accreditation of six Russian precious metals refiners, meaning they will no longer be able to sell gold and silver in the London market, the world’s largest.
The LBMA did not give a reason for the suspension, but the association last week told Reuters it had asked the refiners if they have commercial links with sanctioned Russian entities.
Governments including those of the United States and the European Union have imposed sanctions on numerous Russian individuals, companies, banks and the Russian central bank since the Kremlin sent troops into Ukraine on Feb. 24.
Russia produces around 330 tonnes of gold a year worth around $20 billion at current prices, around 9% of the total mined worldwide, according to consultants Metals Focus.
It produces around 1,350 tonnes of silver a year worth about $1 billion, around 5% of global mine supply.
Most of that metal is bought by Russian commercial banks which send it to refiners before selling it abroad or to the Russian central bank, which said on Feb. 27 it would resume purchases of gold in the local market.
Bankers and traders have said the removal of Russian refiners would have little impact on the market and Russian metal would still find buyers in places such as China and the Middle East.
Gold and silver bars produced by the refineries while they were accredited remain valid to trade, according to LBMA rules, which state that refineries “are to comply with all relevant economic/trade sanctions lists.”
The six refineries suspended by the LBMA 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 were accredited to produce both gold and silver except Moscow Special Alloys Processing Plant, which was only accredited for gold.
“These six refiners will no longer be accepted as Good Delivery by the London Bullion market until further notice,” the LBMA said in a market notice.
None of the refineries responded to requests for comment.
(Reporting by Peter Hobson; Editing by Jonathan Oatis and Mark Potter)
