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Rand Refinery robust with robotics
Alan Muir
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Processing about 410t of newly mined gold ore annually from gold mining countries on the African continent, SA's only primary gold refiner - Rand Refinery - has instituted numerous measures to diversify its product offerings, and to increase profit. Nelendhre Moodley recently spoke to Scottish-born MD, Alan Muir, about Rand Refinery's latest projects, including its foray into international markets and increasing efficiency through the introduction of robotics.
Established in 1921, Rand Refinery processes all local gold mine production, as well as gold produced from a variety of countries across the continent, including Tanzania, Mali, Ghana and Namibia. In 2006, the company sourced roughly 40% of its throughput from outside SA, and the aim is to increase this figure to above 60% over the next five years.
Taking advantage of the opportunities presented by technological advances, Rand Refinery has initiated a project to replace repetitive manual tasks with custom-built robotic units. This will increase productivity and efficiency in the section which produces small investment gold bars. The capital cost, which is estimated at R11m, will bring additional benefits in terms of health and safety, reduced costs as well as improved product quality. A further benefit is that the section will be able to operate 24 hours a day, seven days a week, Muir says.
The smelter section, on the other hand, is focused on expanding its capabilities so that it can attract other feed material. A project to recover base metals, such as copper and nickel, from the feed materials is well advanced, and this will allow the section to offer depositors better returns on material deposited for processing.
A specific target market is the growing amount of electronic scrap (e-waste) which Rand Refinery can process to extract precious metals. This will be done in conjunction with other recycling companies, which can process the plastic circuit boards.
A key challenge facing Rand Refinery is to offset the effect of declining local gold mine output. This drop in throughput reduces fee revenue for the company, and makes it less financially attractive.
The company is therefore actively pursuing the introduction of alternative revenue streams which are independent of company throughput. An example of this is increased activity in the field of fabricated gold products, which attract a greater premium than the traditional gold bars, which have been the staple product for many years.
Says Muir: "In 2006, we began to develop our capability to produce a small range of quality products for the local and overseas jewellery markets, and we have established growing relationships with a few jewellery manufacturers."
The company has already collaborated with a number of customers in Europe (UK and Italy) to supply thin gold wire and gold solder, which are used in the production of jewellery. A broader range of these so-called "jewellery semis" is being developed, together with a range of dental alloys and fabricated medallions.
"We have supplied potential clients with test material and have received very positive responses and numerous repeat orders. Although it is only tens of kilograms of gold products at this stage, we want to build the volume as the relationships develop," Muir explains.
The Indian market, which is the destination for 30% of all Rand Refinery's gold production, remains a focus area. The company believes there is potential for producing custom-branded coins for the banking sector in India and has begun discussions in this regard with a few large banks.
In addition, Rand Refinery is also working on a strategy to evaluate the potential future opportunities in the ever-growing Chinese market.
"We will make a visit to China early next year, to explore its potential for our business and to begin formulating a long-term strategy to gain a foothold," says Muir.
While eyeing potential lucrative overseas markets, Rand Refinery remains firmly rooted in South African soil, and is involved with a number of initiatives to grow and develop the local jewellery manufacturing and retail markets.
Muir concludes that he is pleased with Rand Refinery's progress during 2007. The financial results were very good, and followed a strong performance in 2006. The company is, however, also focused on a few internal strategies, such as developing and retaining key skills amongst the workforce. "We want to continue to develop our own people which leads to their personal growth and results in longer term employment relationships," he concludes.
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