Lawsuit threatens operations of world's largest gold market in London
The London Bullion Market Association (LBMA) is facing a legal battle that could affect the operation of the world's largest gold market. The organization is being sued by the families of two men who died at the North Mara gold mine in Tanzania in 2019.
According to Bloomberg, the trial is set to begin in London next week. The plaintiffs are seeking to establish LBMA's liability over compliance with responsible gold sourcing standards, while the association rejects the claims and says it bears no legal responsibility for what happened at the mine.
The risks extend beyond the case itself. A large payout could exceed LBMA's financial resources: at the end of 2025, the organization had reserves of about £1.4 million ($1.9 million), while the plaintiffs' legal costs alone could reach £3 million if LBMA loses, excluding any potential compensation to the families.
Lawsuit could reshape gold supply chain oversight
LBMA manages the Good Delivery List, which determines accredited refiners and plays a key role in London's gold market, where around $1 trillion changes hands each week. In recent years, the organization has also required participants to comply with responsible sourcing standards.
The lawsuit concerns the deaths of two 23-year-old men at North Mara. According to the plaintiffs, one was fatally wounded after police dispersed small-scale miners who had entered the mine site in July 2019, while the other was shot while attempting to flee police in December of the same year.
Some gold from North Mara was processed by MMTC-PAMP India, which is included on the Good Delivery List. Leigh Day, the law firm representing the families, argues that LBMA should have suspended the refiner's accreditation or threatened to do so unless it stopped sourcing gold from the mine.
LBMA maintains that it neither certifies nor oversees mines themselves, has no employees in Tanzania and cannot be held responsible for the actions of police or security personnel. The association considers the lawsuit unfounded and expects to prevail in court.
LBMA defeat could affect the entire industry
An adverse court ruling could pave the way for similar lawsuits and call into question the existing model for overseeing precious metals supply chains. LBMA has already discussed the possibility of creating a successor organization to preserve critical market functions in the event of an unfavorable outcome, although no practical steps have yet been taken.
Meanwhile, London's role in precious metals trading continues to expand. Citigroup became the first new member of London Precious Metals Clearing in a decade, bringing the number of clearing banks to five in a market with daily turnover of around $207 billion.
Citigroup's admission expanded the bank's presence in the gold and silver markets during a period of sharp price fluctuations. Clearing infrastructure remains a key component of the London market and is closely linked to the standards framework maintained by LBMA.
Earlier, we reported that the gold market came under pressure amid a sharp rise in U.S. Treasury yields. Higher U.S. government bond yields increased pressure on the precious metal.
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