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Rand Refinery behind massive gold imports

CEO says its nothing out of the ordinary.

PRETORIA – The almost one billion in unwrought gold that was imported into South Africa from the US in March and last year September, was destined for the Rand Refinery. In a statement sent to Moneyweb, the Chief Executive of the Rand Refinery, Howard Craig, stated that the movement of gold in “larger or smaller amounts” to and from other countries is nothing out of the ordinary and that it “comes with the status of an internationally acclaimed refinery.

“The company currently imports in excess of 200 tons of gold per annum, refining over 400 tons of gold per annum. This is not a new part of the business, having imported gold for further refining and processing for at least the past fifteen years. It should also be borne in mind that Rand Refinery does not source any metal deposits from conflict-affected areas, and adheres strictly to the OECD and London Bullion Market Association guidelines in this regard,” he said, adding that it refines precious metals sourced from all over the world, the USE just being one example.

In an analysis of US trade data, originally highlighted in a story by the digital news outlet Quartzit was pointed out that South Africa, by nature a big exporter of commodities, has received two very big shipments of unwrought gold from the US in the last nine months. Unwrought gold is impure gold which needs further processing, mainly refining, before it can be used for manufacture of other articles. The data showed that the trade balance of South Africa with the United States has changed drastically in the last couple of months. This data was verified by Moneyweb.

According to the US Bureau, South Africa had a $110m trade surplus with the US in March 2012 and a $401.5m surplus in January 2013. In March 2013 this changed to a deficit of $688.8m. (The tables below show the surplus/deficit ratio from the US perspective)

2013: US trade in goods with South Africa

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.

Month

Exports

Imports

Balance

January 2013

448.5

850

-401.5

February 2013

666.6

580.3

86.3

March 2013

1,335.9

647.1

688.8

Total 2013

2,451.0

2,077.4

373.6

Source: US Census Bureau

2012: US trade in goods with South Africa

NOTE: All figures are in millions of U.S. dollars on a nominal basis, not seasonally adjusted unless otherwise specified. Details may not equal totals due to rounding.

Month

Exports

Imports

Balance

January 2013

575.9

766.9

-190.9

February 2012

529.4

496.4

33

March 2012

707.4

817.5

-110

April 2012

666

671.2

-5.2

May 2012

593.5

726.8

-133.3

June 2012

587.7

787.5

-199.8

July 2012

586.4

757.7

-171.4

August 2012

519.3

642.3

-123

September 2012

1,112.8

787.9

324.9

October 2012

610.2

721.9

-111.7

November 2012

505.9

735.6

-229.6

December 2012

558.8

745.6

-186.8

TOTAL 2012

7,553.3

8,657.1

-1,103.8

Source: US Census Bureau

Using the US Bureau data available on its website (which reaches back to 1985), it’s clear that South Africa experienced its biggest monthly deficit in this 28-year period, during March 2013. The closest previous deficit was $324m in September 2012 and before that $208.4m in October 2012.

Quartz also quotes data indicating that this shift in the trade balance is due to two large shipments of unwrought gold (allegedly worth $982m) that was shipped from John F. Kennedy Airport in New York for South Africa.

Moneyweb could not verify this detail for shipments specifically from JFK airport from the statistics available, but it did correlate with the Census Bureau data which shows that exports in gold (non-monetary excluding ores and concentrates) was at a sudden high of $778,893m in March 2013 and another large export shipment in September of 2012 of $504,139m. The total cumulative exports in this category for unwrought gold up until the end of March 2013 was indeed equal to the amount quoted by Quartz – $981,936m.

While some international media outlets wondered as to why the gold was imported, local mining analyst at Cadiz Corporate Solutions Peter Major immediately guessed that the gold was destined for the Rand Refinery.

“The Rand Refinery is probably the most modern and efficient refinery in the world and it can handle about a 1 000 tons per year, but with the country’s declining gold production it probably only gets 190 tons per year,” he told Moneyweb.

He said the refinery, which had a very good track record and has been advertising itself to countries all over the world, might be refining gold for other countries. “I would guess that you are seeing a billion dollars of gold coming in, but you will probably see that billion dollars of gold going out again in a month or two,” he said.

 

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