JOHANNESBURG (miningweekly.com) – With the gold price soaring sky-high, insight into the global gold assaying and refining standards that need to be upheld was intensively communicated this week at the assaying and refining conference of the London Bullion Market Association (LBMA), which proactively ensures gold market integrity, transparency and trust.

In providing this crucial insight, it was most interesting to hear the name of South Africa’s Rand Refinery acclaimed because of its 22 years of service as an LBMA gold market referee.

“Referees are an integral part of the work of the LBMA on the technical side of things,” LBMA CTO Neil Harby, himself a former long-serving Rand Refinery technical assurance executive, pointed out.

In addition, Metalor Technologies of Switzerland’s laboratory, trace analysis and metallurgy manager Daniela Manara, and LBMA’s physical and technical services officer Hannah Coakley, outlined how good delivery, quality and integrity issues have, up to now, been proactively dealt with by Rand Refinery and four other refiners. However, because of the considerable workload, two additional referees were added to the referee list during the event.

“The LBMA plays a critical role in the precious metals market, ensuring quality, transparency and trust, but the referees are at the heart of this. They are acting as the gatekeepers who uphold the highest standards in bullion production and certification,” Coakley said at the London event covered by Mining Weekly.

“The referees are key advisers to the LBMA, and throughout my five years in this role, a personal focus for me has been to continue the work of ensuring that the relationship between LBMA and the referees group continues to strengthen and develop.

“I believe that the referees group is unique in that competitors work together for the good of the industry and the market.

“Without this collaboration, the global gold and silver market would lack the credibility and reliability that makes it one of the most trusted investment spaces today,” Coakley added.

As reported by Mining Weekly last year, Rand Refinery, as the owner of one of the world's largest integrated single-site precious metals refining and smelting complexes, is mitigating environmental impact by introducing renewable energy, with the South African gold refiner intent on reducing carbon emissions by 9 000 t to 11 000 t through growing its solar PV plant to a capacity of at least 5.4 MW. Importantly, the certified gold and silver chain-of-custody of the Rand Refinery, which was established in Germiston in 1920, is independently audited.

Regarding proactive gold-bar adjudicating, Coakley had this to say: “It's important to know that the referee and the applicant don't have any direct contact, and that the referees are never aware of the applicant name at any stage of the process, ensuring complete anonymity.”

POROSITY RAISING CONCERNS

Worryingly, a hot topic which has recently raised concerns is the porosity and micro porosity of gold bars and interestingly, once again it is the Rand Refinery that is part of the group that has been meeting to discuss how to deal with what has seemingly been brought about as a result of gold bars being produced in continuous induction furnaces rather than being conventionally cast.

While conventionally cast gold bars almost never contain porosity, bars produced in continuous induction furnaces often contained porosity, or micro porosity, the degree of which depends on the exact operating perimeters of a particular system.

With the increase in the use of induction furnace technology in the last decade, the presence of micro porosity in large bars is becoming more of a concern.

“The rejection of bars containing micro porosity in recent years, either by the LBMA as part of good delivery list applications, or by the London vault, has made this a very hot topic.

“Under these circumstances, the issue of porosity emerged, and the referees group themselves decided to meet to discuss this matter,” Coakley remarked at the event covered by Mining Weekly.

HOW REFEREES WERE FOUNDED

By the 1980s, the development of the precious metals market was such that the Bank of England recognised that the custody maintenance and regulation of the good delivery list required an independent body, which resulted in LBMA being founded in 1987, to ensure quality, integrity and transparency within the market.

During its first 13 years, LBMA depended on two refiners for the technical aspects of maintaining the good delivery list. But this all began to change owing to the executive wanting to have more knowledge and control of the technical accreditation process.

The result was that in 2001, LBMA invited all good delivery gold and silver refiners who were also LBMA associates, to submit applications to become part of this expanded referees panel.

After two years of testing the technical abilities of the referee applicants and the reference samples which they were required to manufacture as part of their application, Rand Refinery was selected as one of the five referees in 2003.

GOLD BAR TESTING

The most important task of gold bar gatekeeping is now the examination and testing of sample bar provided by the refiner seeking good delivery accreditation.

After satisfying the LBMA about initial accuracy, an applicant must submit a marked larger bar, which must comply within the LBMA good delivery physical and chemical criteria, Manara outlined.

Following physical examination in London vaults, the bars are divided into two batches, which are sent to referees for more detailed examination and chemical analysis.

“It's important to know that the referee and the applicant don't have any direct contact, and that the referee is never aware of the applicant’s name at any stage of the process, ensuring completely anonymity,” she added.

The referee’s examination, testing and reporting of the sample gold bar follow a long-established procedure involving visual expression of the sample, as well as melting and full elemental analysis.

Monitoring is another regular referee activity, which involves the cross-check assaying of the sample submitted by the refinery every three years, with the assaying and analytical report provided by the referee on the sample allowing the LBMA to decide whether the refiner has passed.

This information also permits LBMA to provide feedback to the refiner to assist with the fine-tuning to pass the proficiency test.

Every year, the referee working group decide the composition for the proficiency testing scheme.

This is discussed in great depth by the group, with the collaboration with LBMA, to ensure a new, challenging, yet exciting composition is available for the market to test each year.

The manufacturing and analysis of the proficiency test sample is prepared by the referee panel.

“We can observe that the number of laboratories achieving scores of less than minus two is increasing, and general improvement can be seen in accuracy and precision,” Manara reported.

A focus for the LBMA and the referee in the 2025 this year is the production of the new gold customer relations management.