Strategies for Tanzania to develop an LBMA-grade gold refinery

DAR ES SALAAM: A RECENT TBC programme celebrating 60 years of the Bank of Tanzania (BoT) covered a range of topics, including gold and its role as a government asset that generates foreign exchange.

The interview with the central bank’s top senior management provided insights into the differences between Tanzania’s gold held abroad in foreign institutions and that stored in the BoT’s vaults.

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It also explained the reasons and methods behind the bank’s gold purchases and sales. The broadcast also pointed out that, at present, South Africa is the only country in Africa with a refinery that can issue serial numbers as per (London Bullion Market Association) LBMA standards for uniquely identifying gold bars, with a caution that reaching such a standard is a lengthy process and incurs substantial costs.

After that experience, I was motivated to investigate further and question why Tanzania is not speeding up the development of its own LBMA-standard facility, particularly given the significant gold mined and traded there.

If the figures are correct, Tanzania might be among the top two gold producers in Africa. I also consider how the costs and procedures stack up against the potential value of Tanzanian gold if we had an LBMA facility operational yesterday.

This conceptual perspective reveals that a gold-producing nation’s true challenge is no longer just mining gold, but rather its ability to refine, authenticate, serialise and trade gold to meet the highest international standards. In Tanzania, the future of the gold industry is not solely about boosting production; it’s about manufacturing gold bars that the international market can trust immediately, which is a significant difference.

For clarity, it’s important to distinguish that a gold bar refined in Tanzania and sold globally is one thing. However, a Tanzanian gold bar produced by a refinery meeting the strict standards of the LBMA Good Delivery List with a unique refinery ID, serial number, weight and fineness identifiable in the international bullion market is an entirely different matter.

It converts gold from a mineral export into an internationally recognised financial asset. The goal is attainable; however, Tanzania must recognise that achieving LBMA Good Delivery status as a refiner involves more than just buying a furnace and stamping serial numbers on gold bars.

As explained during the TBC live programme, establishing such standards demands capital, advanced technology, laboratory facilities, traceability, responsible sourcing, financial robustness, extensive operating history, and a corporate culture committed to traceability and independent verification of each gold bar.

The LBMA set a high threshold intentionally, and it does not automatically certify any refinery that applies. The Good Delivery List serves as the global standard for gold bars accepted in the Loco London market.

These gold bars usually weigh about 400 troy ounces, with standards encompassing fine-ounce weight, purity, physical appearance and bar markings. More importantly, the present application criteria require an aspiring refinery to already show significant capacity and credibility.

An applicant generally must have been operational for at least five years and have refined the relevant metal for no less than three years. Specifically, for gold, they should produce a minimum of 10 tonnes of refined gold annually; hold a tangible net worth of at least £15 million or the equivalent of 53,571,908,907/- or 20,265,810 US dollars (based on the 12/08/2026 exchange rate); comply with ownership and financial due diligence standards; and follow LBMA’s responsible sourcing programme.

This offers an important policy lesson for Tanzania on long-term investment and economic growth, given that Tanzania is endowed with gold deposits. Moving forward, before it is too late, the country should not build another refinery, as stated on the TBC live programme, and then ask how to obtain LBMA status.

It should design the refinery from day one to be LBMA-ready. Serialisation is not simply about stamping a number, yet this is a point where public debate often becomes too simplistic. Sources from the LBMA Good Delivery list signal that to serialise an internationalstandard bar means much more than engraving “Tanzania 000001” onto bullion. To clarify for those unfamiliar or interested, each dependable delivery bar must be easily recognisable and carry consistent markings.

The LBMA’s regulations specify the required markings and, beginning in 2026, prohibit the use of nonRoman characters in serial numbers, dates and fineness markings. A well-managed bar identity system should link the serial number to an unchangeable production record.

This record includes details such as the refining date, batch number, doré source, assay results, gross and fine gold weights, fineness, refinery ID, operator or production info, quality control data and chainof-custody documentation.

The physical gold bar serves as the last link in a broader digital and physical traceability system. Tanzania has the chance to improve transparency by creating a national gold traceability platform that links licensed miners, buying centres, assayers, refineries, customs, tax authorities, banks and the BoT.

This would produce a gold bar whose authenticity is verified not only by its physical look but also by its comprehensive chain of evidence. Referring to the TBC live programme, it was clearly stated that the process is lengthy and costly, which raises an important question about what the refinery would roughly cost.

Reliable sources on cost estimates show that there is no fixed “LBMA refinery cost” since it varies significantly. Investment costs, based on an analysis of seven refineries worldwide, depend on factors like capacity, technology, security, location, environmental measures, laboratory quality and whether the plant processes only doré or also handles complex concentrates and recycled materials.

Therefore, policymakers aiming to make Tanzania have LBMA good delivery should treat the following as planning estimates rather than as supplier quotations. For a modest Tanzanian refinery aiming for around 100–200 kg/ day, an initial capital estimate could be about 20 million US dollars to 50 million US dollars.

A larger 300– 500 kg/day facility, intended for international markets, might need roughly 40 million US dollars to 80 million US dollars or more, depending on the technology, automation, security measures and laboratory requirements. Ghana offers a significant African benchmark.

The Royal Ghana Gold Refinery, with an initial capacity of 400 kilogramme daily, was established to refine doré from artisanal and small-scale miners. Ghana has clearly connected the refinery’s future to achieving LBMA certification and building reserve stock.

For Tanzania, a conceptual project producing 300–500 kg/day could allocate capital as follows: Establishing a modern gold refinery adhering to international standards would require substantial investment across the entire value chain.

A high-quality assay and analytical laboratory might cost 3–7 million US dollars, while the refinery plant, furnaces and refining systems could range from 15–25 million US dollars. Secure vaults and physical security might cost 4–8 million US dollars, and bar casting, moulds, stamping and serialisation systems could amount to 1–3 million US dollars.

The total capital requirement could range from 36 million US dollars to 71 million US dollars. Digital traceability and ERP systems may add 1–3 million US dollars, while waste-treatment and environmental protection systems could require 2–5 million US dollars.

Building costs, utilities and supporting infrastructure are estimated between 5 and 10 million US dollars, with an additional 5 to 10 million US dollars for engineering, commissioning and backup plans.

These figures are preliminary estimates derived from the most reliable cost assessments of comparable refineries adhering to LBMA standards. They require validation via a comprehensive feasibility study, technical assessment and a competitive international procurement process.

The definitive number will depend on a bankable feasibility study and validation by an international engineering procurement contractor. Notably, one cost can far exceed the physical refinery expenses: Working capital.

If a refinery acquires and keeps large amounts of gold before selling, the financing needed can reach hundreds of millions of dollars due to the substantial value of the gold inventory.

A refinery should, therefore, consider toll refining, pre-financing arrangements, bank-backed purchase structures and carefully controlled inventory finance, rather than attempting to own all the gold passing through the plant.

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The laboratory can be more crucial than the furnace itself. An LBMA-grade refinery’s success depends on its ability to accurately identify the composition of each bar. To achieve this, the refinery requires a top-tier assay laboratory that employs suitable methods like fire assay and instrumental analysis.

Tanzania should pursue ISO/ IEC 17025 accreditation for its laboratory. This standard is recognised globally and ensures that testing and calibration laboratories operate with competence, impartiality and consistency.

This certificate is more than just a wall decoration. It signifies that the laboratory has to prove technical skills, use reliable methods, maintain calibrated equipment, employ competent staff, implement quality control and produce valid results.

The laboratory should also engage in external proficiency testing. LBMA’s 2026 gold proficiency scheme costs about £690, which is approximately 2,463,961.91/- or 932.13 US dollars per lab for gold analysis, excluding any applicable VAT.

While this expense is minor compared to the millions needed for establishing the lab, it is crucial for ensuring international confidence, as it relies on accurate analysis. During the TBC live programme looking back 60 years of BoT, it was also mentioned that gold bar serialisation and the attainment of the LBMA process require a number of certificates.

Hence, a question many would like answered is which certificates and accreditations are actually required? Here, Tanzanians and those interested in following up these issues should distinguish between mandatory LBMA requirements, strongly advisable international certifications and local statutory licences.

First, achieving LBMA Good Delivery accreditation is the key goal. The current LBMA gold application fee is £39,800 excluding VAT, which includes £5,000 for the application process, £18,700 for Stage 1 assay testing, and £16,100 for Stage 2 testing of the applicant’s bars, with shipping costs extra. Importantly, this fee is minor relative to the significant investment needed to qualify technically.

Secondly, the LBMA Responsible Sourcing Programme is mandatory for Good Delivery refiners. They must show responsible sourcing practices and undergo annual verification by an independent thirdparty. LBMA mandates that Good Delivery refiners and applicants select an assurance provider from its approved list.

The Responsible Gold Guidance emphasises supplychain risk assessment, management, independent verification and yearly reporting. There is no fixed published LBMA “responsible sourcing certificate subscription price” that can be directly included in the budget. The main ongoing expense is the independent assurance audit, with its cost varying based on the refinery, complexity and assurance provider.

Thirdly, the refinery laboratory should be fundamentally required to obtain ISO/IEC 17025 accreditation. The cost of accreditation varies based on the accrediting organisation, scope and laboratory complexity, rather than a standard ISO subscription. ISO does not directly certify organisations.

Fourthly, ISO 9001 offers a quality-management framework. While it is not the same as an LBMA Good Delivery certificate, obtaining it can enhance the refinery’s quality systems and boost customer confidence. Costs for certification differ depending on the certification body, location and organisation size.

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Fifthly, ISO 14001 and ISO 45001 are highly recommended for an industrial gold refinery. ISO 14001 enhances environmental management, while ISO 45001 improves occupational health and safety. These standards should be integrated into the refinery’s international operational framework, rather than viewed as just compliance requirements.

Ultimately, establishing an LBMA-grade gold refinery requires responsible sourcing and adherence to OECD due diligence standards. Tanzania ought to develop its supply-chain framework in line with the OECD Due Diligence Guidance principles outlined in LBMA’s Responsible Gold Guidance.

This is especially crucial for artisanal and small-scale mining. The refinery must be able to trace the origin of its gold and manage risks related to conflict, human rights abuses, money laundering, corruption and illegal mining. Although it wasn’t mentioned in the TBC live program celebrating 60 years of BoT discussion, is understanding LBMA subscriptions crucial for gold worthiness? This is an area where policymakers need to be precise.

A refinery does not have to buy a universal LBMA subscription just to be recognised as a Good Delivery refiner. LBMA offers different licenses for general subscribers and for inclusion on the Good Delivery List. In 2026, annual fees start at £10,000 for an SME/Services GDL license and go up to £21,500 for global entities.

The total cost, including license and subscription, is £15,000 for SMEs/Services and £26,800 for global organisations. These costs are separate from the Good Delivery application fee. The key financial commitment involves the refinery’s ability to sustain production, quality assurance, responsible sourcing and compliance systems.

The strategic benefit A key question is why Tanzania should invest tens of millions of dollars in this effort. The goal isn’t just to produce more attractive gold bars but to build a financial infrastructure around gold.

A Tanzanian refinery approved by LBMA has the potential to increase domestic gold refinement, improving traceability, reducing dependence on foreign refineries, generating skilled employment, and strengthening Tanzania’s position in global bullion markets. Significantly, it could also support the Bank of Tanzania’s local gold purchase initiative.

Imagine a system in which Tanzania buys local gold in shillings, refines it locally and makes bars that are recognised worldwide. Eligible bullion is added to the nation’s financial reserves and each bar is serialised.

From an investment perspective, this establishes a robust, interconnected chain that begins with Tanzanian mines, moves through a regulated purchasing system, verifies assays and ends with the Tanzanian refinery that produces internationally recognised bars. In the end, this strengthens the reserves of the BoT and helps the global market.

That is a fundamentally different economic model from simply exporting doré. Tanzania ought to implement an LBMA Gold Refinery Development Programme aiming to develop an internationally competitive Good Delivery refinery within five to seven years.

However, the government doesn’t need to own everything outright and I will clarify my reasoning. A more robust model could integrate government strategic involvement with private investment, international refinery expertise, commercial banks, development finance institutions and possibly a key global bullion partner.

The government can provide land, regulatory support, infrastructure and policy backing, while private investors contribute capital and technical expertise. The refinery should function as a commercially independent entity, with clear separation between regulation, purchasing, refining and reserve-management decisions.

The primary aim is not merely for Tanzania to have an LBMAcertified refinery; the target should be much broader. Tanzania ought to position itself as the reliable bullion hub for East Africa. This involves refining, assaying, serialising, securely storing, financing and trading gold, ultimately integrating it into advanced financial markets.

The £39,800 LBMA application fee is minor within the larger picture. The real value is in cultivating trust, trust in the refinery, the assay, serial numbers, gold origin, financial statements, the vault and ultimately, the nation.

If Tanzania can build this trust, it will achieve a much greater success than just opening another refinery. It will create a worldwide financial framework focused on its natural resources.

This signifies the moment when Tanzania’s gold shifts from being just a commodity to a strategic asset that enhances the country’s financial power, supporting national development, particularly in the implementation of DIRA 2050.