Gold is recovered from the ore after a process of crushing and screening. Photo: IC

The China Gold Association strongly opposes US restrictions on Chinese gold companies and the London Bullion Market Association’s (LBMA) suspension of their Good Delivery status, saying the moves lack factual basis, violate market principles and disrupt the global gold industrial chain. The association said it fully supports the Chinese government’s position and the countermeasures it has taken.

The US Department of Homeland Security recently added some Chinese gold companies to the so-called Uyghur Forced Labor Prevention Act (UFLPA) Entity List, barring goods produced by the companies from entering the US, while the LBMA subsequently suspended the Good Delivery status of relevant companies.

In a statement issued on Wednesday, the association said the measures lack factual basis and run counter to market principles, which disrupts the stability of the global gold industrial chain, adding that it firmly opposes the moves.

The allegation of so-called "forced labor" in Northwest China's Xinjiang Uygur Autonomous Region is entirely false, the association said. China's gold industry strictly abides by laws and regulations, protects the legitimate rights and interests of employees in accordance with the law, and maintains compliant and transparent practices throughout the entire mining development process, it said.

“There is no basis for the relevant allegations,” the association said, adding that the US restrictions, based on a presumption of guilt, are essentially an attempt to politicize human rights issues and pursue trade protectionism,

The LBMA's Good Delivery system serves as an important foundation for the circulation of gold in the global market, the association said. By accepting false information and suspending companies' qualifications without conducting sufficient fact-checking, the LBMA has not only harmed the legitimate rights and interests of Chinese gold companies, but also undermined the stable operation of the global gold market, according to the statement.

The association stressed that China's gold industrial chain is complete and has sufficient resilience to withstand external risks. It said it will bring together industry resources, coordinate efforts to safeguard the rights and interests of affected companies, and promptly report relevant developments to competent authorities.

It will also continue to strengthen industry compliance and self-discipline, improve traceability systems and advance green mine development, while proactively engaging in professional dialogue with international counterparts in an effort to promote objective and fair assessments of China's gold industry, the statement said.

“The China Gold Association and enterprises across the industry fully agree with and support the Chinese government's relevant position and all necessary countermeasures, and will firmly safeguard national interests as well as the legitimate rights and interests of Chinese enterprises, according to the statement.

The association urged the US to stop imposing sanctions and suppression on the basis of false information. It also called on the LBMA to uphold a neutral and professional position, respect objective facts and correct its inappropriate decision.

The global gold industry should uphold the principle of mutual benefit and win-win cooperation and work together to maintain a fair and orderly international gold market, the association said.

The statement follows the US Department of Homeland Security's announcement on July 31 that it had added 43 Chinese entities to the UFLPA Entity List, with the updated list taking effect on August 3. Among the newly listed entities were three companies directly involved in China's gold industry – Shandong Gold Mining Co, Shandong Gold Smelting Co and Xinjiang Jinchuan Mining Industry Co, according to a Federal Register notice published on August 3. 

On August 4, the LBMA announced that Shandong Gold Smelting Co had been suspended from both its Gold and Silver Good Delivery Lists effective August 5, after the company was added to the US list. The LBMA said the suspension was an interim measure pending completion of its Incident Review Process.

China's Ministry of Commerce had already strongly opposed the US move. In an August 1 response, a ministry spokesperson said the US action has no factual basis and is of typical economic coercion, as Washington has used so-called "human rights" and "forced labor" as a pretext to arbitrarily impose unilateral sanctions on Chinese companies under its domestic law. China would take necessary measures to firmly safeguard the legitimate rights and interests of Chinese enterprises, the ministry said.

On August 5, MOFCOM announced countermeasures against six US entities that it said had assisted and supported illegal US sanctions related to Xinjiang. The ministry urged Washington to immediately withdraw the restrictions and return to resolving differences through dialogue and cooperation.

Global Times