Right of reply: Rand Refinery
Rand Refinery disputes accuracy of Zimbabwe gold taskforce report
Rand Refinery has noted with concern an article that appears in the FM titled "Gold’s Lost Lustre" (Africa & International, November 26-December 2).
We reject the conjecture arrived at in the report by Zimbabwe’s Gold Mobilisation National Taskforce in so far as our business is concerned. The FM story reproduces the inaccuracies in the taskforce report.
For the record, we categorically deny any involvement in sourcing gold from Zimbabwe outside our formal and legitimate partner, Fidelity Printers & Refiners (FPR).
As the taskforce did not offer us the common courtesy to provide input into the above-mentioned report — nor did the Zimbabwe-based journalist Lenin Ndebele — I am writing to correct the false assertions.
For one, the report refers to SA Rand Refinery (SARR), which could well be easily confused with our name, "Rand Refinery", and it requires refutation.
Most notably, we dispute the two paragraphs of information quoted from the taskforce report, in so far as Rand Refinery is concerned. The article as a result passes opinions expressed in the report as fact, bringing Rand Refinery into disrepute and suggesting it abets gold smuggling.
Among our sources, which mostly include large-scale gold miners, is FPR, an organisation wholly owned by the Reserve Bank of Zimbabwe. By law, all gold mined in Zimbabwe must be sold to FPR. It must be noted that deposits to Rand Refinery by FPR have fallen by as much as 60% over the past year, with FPR depositing only 4.6t of gold between September 2019 and June 2020.
No Zimbabwean gold is currently being deposited at Rand Refinery. That said, we have a strong working relationship with FPR, from which we source responsibly mined material.
All material, including that from FPR, is screened as per our processes, which include declarations, checking of waybills, origin, weights and composition of the material. Furthermore, all material deposited at Rand Refinery is subject to "fingerprinting", and this is tracked as a measure to confirm source and origin. In terms of monetising material, all funds are repatriated to the Reserve Bank of Zimbabwe.
The FM should have contacted Rand Refinery to test the claims made by the taskforce. For one thing, the taskforce’s claim that Rand Refinery pays plus 12% on the world market price is wrong. Rand Refinery in fact acts as an agent and sells gold deposits on behalf of its depositors to the market, and the price achieved is that of the prevailing London Bullion Market Association (LBMA) price. It is impossible for Rand Refinery to buy gold deposits at such a premium.
We can only assume the authors of the taskforce report are trying to refer to the publicly reported illegal arbitrage that potentially exists between SA and Zimbabwe in terms of gold. In SA gold is subject to VAT, especially if it is sold in a finished form (as jewellery, for example). As such, smuggled material may be able to fetch above the prevailing LBMA price through some industry actors other than Rand Refinery, in that Rand Refinery does not pay VAT on gold deposits.
Zama Zama miners also do not process their material through formal mining channels, so the material does not form part of our mining supply chain. From publicly available reports, as far as we understand, this material often finds its way out of SA through smaller, non-LBMA refineries, of which there are more than 50 in SA. It has been claimed and reported by others that small licensed refineries with export permits refine and blend this material with other forms of scrap gold and sell it into the Dubai or European markets.
It is true that some gold could unwittingly end up in the formal supply chain. However, we are the only LBMA refiner in Africa and deal mainly with large-scale miners with robust due diligence processes and systems in place. By extension, this means that any illicit Southern African material that may end up in the formal supply chain must be from material exported as non-LBMA products (in other words, material that has not gone through Rand Refinery).
Our certified gold and silver chain-of-custody is independently audited to meet the requirements set by relevant industry bodies. Suffice to say we have a detailed understanding of the mines that make up most of our supply. This level of due diligence offers assurances to both customers and regulators that the mining activity conforms to high social, ethical, environmental and safety standards. Our commitment to responsible gold extends beyond these to include risks like conflict, child labour and benefits in kind.
Lastly, all material deposited with Rand Refinery must be moved using reputable valuable-cargo transporters to our vault at OR Tambo International Airport. All gold received from FPR only comes through a reputable valuable-cargo transporter. The routing and handover of all deposits is audited by Rand Refinery to leave no room for any hand-carry or private transport of international gold.
While we continue to offer responsible business opportunities to all our suppliers, including artisanal miners and entities in our supply chains, we take all incidents or issues that endanger our standing very seriously. We remain committed to supporting African governments to finding better ways to incorporate artisanal sources in our responsible gold supply chain, in line with our compliance commitments.
As with all role players in the industry, Rand Refinery fully supports all attempts to end the pernicious levels of gold smuggling into the country and will continue to assist in any way we can to help end this scourge. We remain committed to operating with integrity, serving our clients to the best of our ability, and making a positive contribution to Africa.
CEO, Rand Refinery
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