World’s Biggest Gold Refinery Joins Dillon to Sell Bars in U.S.
Rand Refinery (Pty) Ltd., the world’s biggest gold processor, said it intends to sell bullion bars in the U.S. market as part of a plan to expand processing metals mined outside South Africa and boost silver operations.
“The refinery has recently formed an alliance with U.S. company Dillon Gage Group Inc. to market and sell gold- and silver-minted bars in the country,” Chief Executive Officer Howard Craig said in an e-mailed response to questions yesterday.
The refinery, which is jointly owned by South African gold producers AngloGold Ashanti Ltd. (ANG), Gold Fields Ltd. (GFI), DRDGOLD Ltd. (DRD) and Harmony Gold Mining Co., plans to reduce its reliance on locally produced gold on concern that there isn’t sufficient supply and will increase its capacity to process silver, Business Day newspaper reported yesterday. The plant is located in Germiston, 15 kilometers (9 miles) east of Johannesburg.
South Africa, which has the continent’s biggest economy, has the world’s largest known reserves of platinum and chrome. The nation used to be the world’s biggest gold producer and is now the fifth-largest. Rand Refinery, started in 1920, is the largest integrated single-site for precious-metals refining and smelting globally, according to its website.
“Diversifying the metals it processes by adding silver is a good move but the metal is less precious than gold and given its limited supply in South Africa, the refinery may have to import it,” Peter Major, a mining analyst at Cadiz Corporate Solutions, said by phone from Cape Town. “If transport costs are high, this may cut into profits.”
Gold dropped for a sixth day, the longest losing streak since February, as filings showed that George Soros and Blackrock Inc. cut holdings of bullion-backed exchange-traded products, adding to signs that investment demand is waning as U.S. equities rally to records.
Gold for immediate delivery fell 1.3 percent to $1,375.52 by 10:17 a.m. in London.
“The logical source for more gold and silver is Africa, countries like Tanzania and Zimbabwe,” Major said. “This is where Rand Refinery should be looking to grow its market.”
The facility currently processes about 75 percent of all so-called dore, or impure gold, in Africa, according to Craig.
“We are continually seeking opportunities and will continue to keep pace with increases in African gold-mining production.”
The company commissioned a sampling and assaying facility in May 2011 to process secondary gold deposits at its office in Singapore, Craig said.
Rand Refinery intends to do the same in the U.S., he told Johannesburg-based Business Day.
To contact the reporter on this story: Amogelang Mbatha in Johannesburg at firstname.lastname@example.org