india international gold convention 2005 gold refining ...€¦ · 2 who we are . . . • original...
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INDIA INTERNATIONAL GOLD INDIA INTERNATIONAL GOLD
CONVENTION 2005 CONVENTION 2005
GOLD REFINING: GOLD REFINING:
CHALLENGES & OPPORTUNITIESCHALLENGES & OPPORTUNITIES
Chris Kenny
Director: Global Markets
Rand Refinery Limited (RRL)
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Who we are . . .Who we are . . .
• Original refinery established in 1920
• Smelter commissioned 1966
• Current refinery commissioned in 1989
• Sales and marketing function (from SARB) in 1998
• 40 000 tonnes of gold processed since inception
- 32% of all gold ever mined worldwide
World’s largest single-location gold refinery, smelter complex
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Who we are . . .ownershipWho we are . . .ownership
53%
33%
10%
2%
2%
AngloGold AshantiGold FieldsDRDGOLDAvgoldWestern Areas
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Who we are . . . credentialsWho we are . . . credentials
OOHHSSAASS 1188000011::11999999CCEERR..:: OOHHSS8822774400
IISSOO 99000011::22000000CCEERR..:: FFSS7733990099
IISSOO 1144000011::11999966CCEERR..:: EEMMSS7755883333
• 1 of 56 London Bullion Market Association (LBMA) accredited refiners
• 1 of only 5 LBMA referees
• ISO9001 accredited – Quality
• ISO14001 accredited – Environment
• OHSAS18001 accredited – Health & safety
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What do we do . . .What do we do . . .
• RefineryProven technology (chlorine and electrolytic)
Throughput of 400t pa
Feedstock mainly doré bars (approximately 85% gold) and some jewellery scrap
• SmelterArc furnace technology
Throughput of 4 000t pa
Low grade precious metal-bearing scrap
- Mine by-products
- Sweeps
- Electronic scrap
- Catalyst scrap
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What do we do . . .What do we do . . .
• Value added products (VAP)
Gold and silver products
• Metal sales
• Treasury services
• Logistics
• Vault services
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Our VAP range . . .Our VAP range . . .
• Cast bars
• Minted / stamped bars
• Semi-fabricated jewellery products
• Gold in solution
• Coin blanks
• Krugerrands
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What do our customers demand . . .What do our customers demand . . .
• Quality
• Integrity
• Security
• Competitive terms
• Tailor-made solutions
• Logistical solutions
• Same-day refining
Recent customer survey gave customer satisfaction rating of 8/10
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Challenges. . .Challenges. . .
• Over-supply of refining capacity
(small-scale businesses large-scale LBMA –approved operations)
Approximately 2 500t pa of newly mined gold
Approximately 6 600t pa to 7 500t pa of available refining capacity
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Global refineries
0%
5%
10%
15%
20%
25%
30%
35%
W. E
uro
pe
Asi
a
N.A
mer
ica
Afr
ica
L.A
mer
ica
E.E
uro
pe
Au
stra
lasi
a
Mid
dle
Eas
t
Regional locationof refineries bynumber
Regional locationof refiningcapacity
• Highest number of refineries in W.Europe and Asia / India sub-continent
• Few refineries in Africa and Middle East
have disproportionately higher capacity
Source: Virtual Metals
Challenges. . .Challenges. . .
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Refineries' capacity utilisation
0%
10%
20%
30%
40%
50%
60%
70%
Afr
ica
N.A
mer
ica
L.A
mer
ica
W. E
uro
pe
Asi
a
Au
stra
lasi
a
E.E
uro
pe
Mid
dle
Eas
t
Capacityutilisation
• Higher utilisation in Africa; reflects RRL’s recent success
Challenges. . .Challenges. . .
Source: Virtual Metals
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Challenges and opportunities. . .Challenges and opportunities. . .
Challenge…
• Decline in S.African gold mine production
Opportunities…
• Non S.African gold doré
receipts at RRL have increased from 50t to 168t in the last two years
75% of sub-Saharan Africa doré
despite declining local production, overall volume of receipts have increased
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Challenge…
• Only 50% of RRL’s throughput is converted to VAP
Opportunities…
• Shorten distribution channels to consuming markets e.g.. India
direct sales to:
- local banks, agents, large scale manufacturing jewellers (subject to legislation charges)
• Invest in new equipment
alloy granulation unit, rolling mill
• Gold Zone
Challenges and opportunities. . .Challenges and opportunities. . .
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Challenges…
• Tight margins
Opportunities…
• Improve refining technology
HSSE / HSGE
• Logistical solutions
Mine RRL
RRL Consumer
Challenges and opportunities. . .Challenges and opportunities. . .
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Challenge…
• Gold jewellery competes for consumer disposable income with an increased number of alternative products
Opportunity…
• Improve promotion of gold jewellerye.g. AuDITIONS – an Indian jewellery design competition
Challenges and opportunities. . .Challenges and opportunities. . .
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Challenge…
• Gold demand heavily dependent on jewellery consumption
Opportunities…
• Sponsor research and development into industrial uses of gold
catalyst
nanotechnology
bio-medical applications
• Offtake could double from 400 –800t pa in the next decade
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Quote . . .Quote . . .
“……… it is probably safe to say that those
refineries that have as their shareholders
major gold mining companies who
guarantee refining feed are more likely to
survive than those who do not”
Jessica CrossVirtual Metals - May 2005
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Conclusion . . .Conclusion . . .
RRL…
• Gold refinery;
• Gold smelter; and of choice
• Gold product manufacturer
We will target…
• Key markets
• Key customers
• Key alliances and relationships
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