Gold is in demand - but with top suppliers in lockdown, who will produce it?

(iStock)
(iStock)

South Africa’s Rand Refinery, the continent’s only gold refiner and one of the oldest globally, will continue to operate at reduced capacity during a national lockdown to curb the spread of coronavirus.

The Johannesburg-based company was exempted from a national lockdown that begins at midnight on Thursday, Chief Executive Officer Praveen Baijnath said on Thursday in an emailed response to questions.

While the facility will shut down its smelting plant, it will continue to operate with about 100 workers, Baijnath said. Rand Refinery processes gold for producers including AngloGold Ashanti and Gold Fields, which operate mines throughout Africa.

“The refinery operation will be significantly scaled down, primarily processing residual surface materials from South African gold mines and mine dore received from Rand Refinery’s rest-of-Africa established gold mines,” Baijnath said.

While South African President Cyril Ramaphosa has ordered a national lockdown to contain the spread of the virus, the order has also spared processing plants for platinum-group metals, Gwede Mantashe, minister of mineral resources and energy, said.

Rand Refinery also refines bullion from the continent’s top gold producers such as Ghana, Democratic Republic of Congo and Tanzania, which it sells on their behalf on the London Bullion Market.

Continuing selling gold brings in vital foreign exchange earnings for the countries which is crucial to their governments’ struggle to minimise the impact of the virus, Baijnath said.

"A complete shutdown of the refinery would have had a domino effect on the production on the continent," Baijnath said. "Moreover, stockpiling of mined gold on the surface would have heightened security risk for any mine."

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