INDIA INTERNATIONAL GOLD CONVENTION 2005 GOLD REFINING: CHALLENGES & OPPORTUNITIES. Chris Kenny Director: Global Markets Rand Refinery Limited (RRL)

Transcription

1 INDIA INTERNATIONAL GOLD CONVENTION 2005 GOLD REFINING: CHALLENGES & OPPORTUNITIES Chris Kenny Director: Global Markets Rand Refinery Limited (RRL)

2 Who we are... World s largest single-location gold refinery, smelter complex Original refinery established in 1920 Smelter commissioned 1966 Current refinery commissioned in 1989 Sales and marketing function (from SARB) in tonnes of gold processed since inception - 32% of all gold ever mined worldwide 2

3 Who we are...ownership 2% 2% 33% 10% 53% AngloGold Ashanti Gold Fields DRDGOLD Avgold Western Areas 3

4 Who we are... credentials 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 ISO 9001:2000 CER.: FS73909 ISO 14001:1996 CER.: EMS75833 OHSAS 18001:1999 CER.: OHS

5 What do we do... Refinery Proven technology (chlorine and electrolytic) Throughput of 400t pa Feedstock mainly doré bars (approximately 85% gold) and some jewellery scrap Smelter Arc furnace technology Throughput of 4 000t pa Low grade precious metal-bearing scrap - Mine by-products - Sweeps - Electronic scrap - Catalyst scrap 5

6 What do we do... Value added products (VAP) Gold and silver products Metal sales Treasury services Logistics Vault services 6

7 Our VAP range... Cast bars Minted / stamped bars Semi-fabricated jewellery products Gold in solution Coin blanks Krugerrands 7

8 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 8

9 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 9

10 Challenges... Global refineries 35% 30% 25% 20% 15% Regional location of refineries by number Regional location of refining capacity Highest number of refineries in W.Europe and Asia / India sub-continent 10% 5% 0% W. Europe Asia N.America Africa L.America E.Europe Australasia Middle East Few refineries in Africa and Middle East have disproportionately higher capacity Source: Virtual Metals 10

11 Challenges... Refineries' capacity utilisation 70% 60% 50% Capacity utilisation Higher utilisation in Africa; reflects RRL s recent success 40% 30% 20% 10% 0% Africa N.America L.America W. Europe Asia Australasia E.Europe Middle East Source: Virtual Metals 11

12 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 12

13 Challenges and opportunities... 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 13

14 Challenges and opportunities... Challenges Tight margins Opportunities Improve refining technology HSSE / HSGE Logistical solutions Mine RRL RRL Consumer 14

15 Challenges and opportunities... Challenge Gold jewellery competes for consumer disposable income with an increased number of alternative products Opportunity Improve promotion of gold jewellery e.g. AuDITIONS an Indian jewellery design competition 15

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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 t pa in the next decade 17

18 Challenge... Increase smelter feedstock Opportunities Widen global reach Improve blend 18

19 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 Cross Virtual Metals - May

20 Conclusion... RRL Gold refinery; } Gold smelter; and of choice Gold product manufacturer We will target Key markets Key customers Key alliances and relationships 20

21 INDIA INTERNATIONAL GOLD CONVENTION 2005 GOLD REFINING: CHALLENGES & OPPORTUNITIES Chris Kenny Director: Global Markets Rand Refinery Limited (RRL)