How China and the BRICS are starving the West of gold

This is a transcript, for the video found here:

Bullets:

Central banks across the world are now buying gold bullion directly from domestic miners in-country, which will depress the supply available on Western exchanges.

At the same time, Chinese mining companies are buying large gold-producing properties in foreign markets, using giant pools of capital from Hong Kong banks.

The BRICS countries are building a new financial system, collateralized by gold holdings. They are major buyers and movers of gold from exchanges in Europe, to vaults in Hong Kong, Singapore, the UAE, Brazil, and Africa.

Chinese firms are employing the same strategy that has served them so well in taking over the supply chains of food, energy, and raw materials: buy directly from local suppliers, paying premium prices in doing so.

Report:

Good morning.

All the central banks in the world are accumulators of gold, and none of them are sellers. And we shared recently how the BRICS countries are building a global trade and financial system that is gold-denominated, while using their national currencies for bilateral trading. Large volumes of gold are being bought on European exchanges and moved to Switzerland, and to vaults here in Asia, to collateralize their new system.

GoldFix is a Substack publication, and they explain in this report that there is another strategy involved as well. Central banks are striking deals with gold producers—gold mines—and buying that gold directly, so that the gold never goes to Europe in the first place. You guys should be ashamed of yourselves, for what you charge for subscriptions. Just by the way. It is a strong report though. The LBMA is the London Bullion Market Association. As central banks buy gold directly from suppliers, Western banks’ access to the physical goes away, and the BRICS countries are keeping it all for themselves. What the BRICS are doing in gold, they’re doing in everything.

This is the strategy that China has executed, time and time again, to lock up all the important supply chains for everything. In food, in energy, in raw materials, and now here in gold, Chinese companies go directly to the source, wherever it is in the world. They negotiate directly with local suppliers, and pay a premium price to win the contract. The local producer makes more money selling to China, and Chinese companies pay less money because they get access to those materials at a still much lower price than were they to go through intermediaries in Western countries, and process the payments through Western banks, and buy and settle contracts on Western commodities exchanges.

We’re watching it now across the entire ag sector. Chinese companies are dealing directly with grain producers in South America and Russia, and we don’t see any of this activity on our own exchanges anymore. Chinese firms have done the same in Africa in chocolate markets—African cocoa producers in Ivory Coast and Ghana are making more money selling directly to China, and Chinese companies are paying less for the chocolate, because there are no intermediaries in London skimming off both sides. This led to shortages of chocolate in Western markets—and big spikes in price--while the BRICS markets were well supplied and didn’t notice.

That’s a preview of what’s coming soon for physical gold markets. Gold is coming directly out of the ground, and instead of being registered for futures trading on Western commodities exchanges, it’s going directly to central bank buyers. There is a hiccup here—LGD is London Good Delivery, which is a protocol for inspection and testing to make sure the gold – in this case -- is real and truly represents what the buyers and sellers of a gold contract think they’re dealing with. But central bank buyers of the physical are even more motivated than anyone in London to make sure they’re really getting what they’re paying for. So the Good Delivery problem goes away, along with the need to use London or New York for anything.

So the central banks are building up their gold reserves, and going directly to the local producers. That helps local mines and miners, and it doesn’t hit their FX reserves—they can pay in local currencies for the gold produced in their domestic markets. South American and African central banks are realizing this is the easiest way to build out their reserves. Ghana and Tanzania are examples; their template here is an agreement to buy 20% of the production of their local mines.

That’s the first big piece—central banks from around the world sourcing their gold from local miners, in local currencies. The other part of the story is that Chinese mining companies are buying up mines across the world, and locking up gold production and supply that can be sent directly to BRICS vaults. Last month, Zijing bought one of the biggest mines in Kazakhstan, for $1.2 billion.

Another Chinese company is soon to take over the mines from a Canadian company, Lumina Group.. This deal is for $581 million, and it needs to be approved by the Canadian government. Canada has stopped deals in critical minerals, like in lithium and copper, but gold is not considered a critical mineral. So copper is, but gold is not, so make of that what you will, but analysts strongly believe the sale will be go through.

Last year, another Canadian gold exploration company, Osino Resources, was sold to Yintai gold, and involved large properties in Namibia. This part’s important: Yintai’s bid was superior to the one that the company had previously accepted, from Dundee Precious Metals. Dundee is a Canadian company, who was trying to buy another Canadian company, for gold mining claims in Namibia. Yintai offered a 32% premium over Dundee, and included a new operating loan to get the mine going, and paid the termination fee. And that deal was approved, quickly, by government regulators in Canada and China.

Chifeng gold is another major operator in China, looking to acquire properties across the world. They’ve got five mines here in China, and scooped up others in Laos and Ghana, and now Chifeng produces over 15 tones of gold per year. China is the world’s largest producer of gold already, and their miners are looking to grow even further by buying productive mines across the world. Hong Kong is key, again, to making that work—Chinese gold miners make money every time they pull dirt out of the ground, but even they use Hong Kong banks to raise capital and do business with the world outside Mainland China.

Here's yet another mining company acquisition, buying yet another mine in Ghana, and yet again going through Hong Kong to make it go. Zijin paid $1 billion in cash from Newmont—a US company—for an open-pit mine in Ghana. Zijin is also going through Hong Kong. Production is estimated to be 5.8 tons a year, for 15 years after it opens in 2028.

It's a weird coincidence that Ghana is a major producer of cocoa--#2 in the world, and a major producer of gold—where they are #8. And we are watching the same thing happen, in both the cocoa and bullion markets, and for the same reasons: Chinese companies are buying production directly from suppliers, cutting out Western banks and brokers. Gold is being drained from our vaults and sent to BRICS countries, and central banks and Chinese mining companies and Hong Kong investment banks are making sure that there isn’t any new gold on the way.

This is Century Park, in Shanghai. Be Good.

Resources and links:

Global cocoa production leaders: top 10 countries & market evolution (1990-2024)

https://intelpoint.co/blogs/top-cocoa-producing-countries-trends/

Top Gold Producing Countries (2024)

https://www.voronoiapp.com/wealth/-Top-Gold-Producing-Countries-2024-4501

Inside China Business, The BRICS trading system is already wiping out US farmers, as global price discovery is destroyed

Inside China Business, Now it's chocolate: prices hit records as Ghana, Ivory Coast and China cut out Western firms

Gold Fix, BRICS Central Banks Cut LBMA Out

BRICS Central Banks Cut LBMA Out

Yintai Gold signs $272m deal to acquire Osino Resources

https://www.mining-technology.com/news/yintai-osino-resources/

Chinese takeover of Vancouver gold miner unlikely to be blocked by government, analyst says

https://financialpost.com/commodities/mining/chinese-takeover-of-vancouver-gold-miner-unlikely-to-be-blocked

Mining.com, Chinese gold miner scours globe for takeover targets

https://www.mining.com/web/chinese-gold-miner-scours-globe-for-takeover-targets/

Bloomberg, China’s Zijin Buys Ghana Gold Mine From Newmont for $1 Billion

https://www.bloomberg.com/news/articles/2024-10-09/china-s-zijin-buys-ghana-gold-mine-from-newmont-for-1-billion

CNBC, Central banks are increasingly buying gold from local mines as prices surge

https://www.cnbc.com/2025/07/16/central-banks-are-buying-gold-from-local-mines-amid-record-prices.html

Reuters, China's Zijin Mining to acquire Kazakh gold mine in $1.2 billion deal

https://www.reuters.com/markets/commodities/chinas-zijin-mining-forks-out-12-billion-gold-mine-kazakhstan-2025-06-30/

Canadian, Chinese authorities approve Osino Resources-Yintai acquisition deal

https://theextractormagazine.com/2024/05/16/canadian-chinese-authorities-approve-osino-resources-yintai-acquisition-deal/

Bloomberg, Central Bankers Are Still Buying Gold After Record Bull Run

https://www.bloomberg.com/news/articles/2025-06-03/gold-market-s-record-breaking-rally-powered-by-central-bank-buying