INDIA INTERNATIONAL GOLD CONVENTION 2005 GOLD REFINING ...€¦ · 2 Who we are . . . • Original refinery established in 1920 • Smelter commissioned 1966 • Current refinery

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)

2

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

3

Who we are . . .ownershipWho we are . . .ownership

53%

33%

10%

2%

2%

AngloGold AshantiGold FieldsDRDGOLDAvgoldWestern Areas

4

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

5

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

6

What do we do . . .What do we do . . .

• Value added products (VAP)

Gold and silver products

• Metal sales

• Treasury services

• Logistics

• Vault services

7

Our VAP range . . .Our VAP range . . .

• Cast bars

• Minted / stamped bars

• Semi-fabricated jewellery products

• Gold in solution

• Coin blanks

• Krugerrands

8

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

9

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

10

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


11

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


Source: Virtual Metals

12

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

13

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


14

Challenges…

• Tight margins

Opportunities…

• Improve refining technology

HSSE / HSGE

• Logistical solutions

Mine RRL

RRL Consumer


15

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


16

17

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

18

Challenge...• Increase smelter feedstock

Opportunities…• Widen global reach

• Improve blend

19

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

20

Conclusion . . .Conclusion . . .

RRL…

• Gold refinery;

• Gold smelter; and of choice

• Gold product manufacturer

We will target…

• Key markets

• Key customers

• Key alliances and relationships

}

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)

INDIA INTERNATIONAL GOLD CONVENTION 2005 GOLD REFINING ...€¦ · 2 Who we are . . . • Original refinery established in 1920 • Smelter commissioned 1966 • Current refinery

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