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London bullion market bars Russian gold refineries -Breaking

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© Reuters. Workers process 99.99% pure gold ingots at Krastsvetmet, a large producer of precious metals in Russia, November 22 2018. REUTERS/Ilya Naymushin

Peter Hobson

LONDON (Reuters] – Monday’s announcement by the London Bullion Market Association was that six Russian precious metals refiners had been withdrawn from accreditation. They will therefore no longer be able, according to the LBMA, to trade gold and silver on the London market. It is one of the most important markets in the world.

While the LBMA has not provided a reason for suspension, the association said last week to Reuters that it had made inquiries of the refiners about commercial relationships with sanctioned Russian entities.

Since February 24, when the Kremlin invaded Ukraine with troops, governments including those from the United States of America and the European Union imposed sanctions on many Russian banks, people, businesses, and central banks.

According to Metals Focus, Russia is responsible for approximately 9% of all gold mined globally. It produces around 330 tonnes per year.

The country produces approximately 1,350 tonnes silver per year, which is about 5% of the global total mine supply.

Russian commercial banks purchase the bulk of the metal, and then send it on to refiners in Russia before selling it elsewhere or to Russian central bank. The latter announced that they would be resuming purchases of local gold by February 27, 2017.

Bankers, traders and others have stated that Russian refining companies would not have an impact on the marketplace and that Russian metal would continue to find buyers in China and other parts of the Middle East.

According to LBMA rules that state the gold and silver bars made by refineries during their accreditation are still valid for trade, they “are required to comply with all applicable economic/trade sanctions.”

JSC Krastsvetmet and JSC Novosibirsk Refinery were suspended by the LBMA. JSC Uralelectromed was also affected.

All were accredited to produce gold and silver, except Moscow Special Alloys Processing Plant which was only for gold.

In a market notice, the LBMA announced that “these six refiners won’t longer be accepted by the London Bullion marketplace as Good Delivery”

None of these refineries replied to our requests for comment.

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