Even more trust
ing inroads, is not just a logistical event, but a transaction steeped in trust.
Rand Refinery is only one of f ive companies appointed as a ‘good delivery referee’ by the London Bullion Market Association that allows it to give guarantees on purity of the metal sold as well as security. As in diamonds, the sale of precious metals is highly brand sensitive.
There has also been significant financial consequences for the share
Sibanye has taken a R196.4m writedown on its share of the gold loss, a major contributor to the company’s 36% decline in half-year headline earnings. It may also write-down the R450m loan it has provided the refinery, while AngloGold Ashanti said that it had already written down its share of the loan, equal to some R573.8m.
Apart from Rand Refinery’s position as the largest single gold refinery in the world – it accepts gold from numerous African countries as well as SA, including Mali and Ghana – it also provides important beneficiation points to the gold producers which they need in terms of meeting the principles of the Mining Charter.
Less affected by the refinery’s woes is Gold Fields, which is the smallest shareholder in the refinery and only stumped up R37.3m, while Harmony Gold contributed R140.4m to the loan. The other gold producer, DRDGold, hasn’t the firepower to make a contribution and stands to have its shareholding in the refinery diluted, although CEO Niel Pretorius discloses that the company has a ‘claw-back’ option which it can exercise at a premium.