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Is The South African Mint Short Of Gold?

Tyler Durden's picture


Submitted by Michael Krieger of Liberty Blitzkrieg blog,

In what may be the strangest story I have seen in a while related to the gold market, it appears $982 million worth of gold has left JFK international airport in New York to some undisclosed location in South Africa.  While it remains unclear what purpose this gold serves, it seems the most likely explanation is to fulfill demand for Krugerrands (South Africa’s popular gold bullion coin) to meet elevated demand in the face of constricted mine production.  This story is timely coming on the heels of the article I posted yesterday about how Dubai’s gold demand is running at 10x normal levels.  This is a bizarre story, so if anyone has further color I’d love to hear it.

From Quartz:

Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March.




It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)


The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.


However, the strikes that rocked South Africa’s mining industry last year briefly caused gold output to fall sharply, around the same time as last autumn’s big gold shipment from JFK. Overall 2012 production declined by a relatively modest 6% (pdf) over the year before, according to a preliminary figure from the US Geological Survey; but those first estimates have sometimes proven wide of the mark. (In 2009 the USGS estimated South Africa’s 2008 production to be 250 tons; it subsequently revised the figure to 213 tons.) So it could be that the strikes dealt a more severe blow to the country’s gold industry than the data show.


Still, even if gold output did fall precipitously, it’s not clear why South Africa would need to start importing it. One possible destination for the gold is the South African Mint, which produces legal-to-own gold coins called Krugerrands; the gold used in them is first refined by the Rand refinery. Calls to the South African embassy in Washington, DC were not returned.

Meanwhile how about this chart, courtesy of the Quartz article.



Full article here.


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Tue, 05/14/2013 - 19:27 | 3562669 Real Estate Geek
Real Estate Geek's picture


SCHULTZ !!!!!!!!!

Tue, 05/14/2013 - 19:36 | 3562684 ACP
ACP's picture

Running out of gold to make those Krugmans...

My bad, Krugmans are made of paper.

Tue, 05/14/2013 - 19:41 | 3562703 SafelyGraze
SafelyGraze's picture

we call it "above ground mining"

it's easy

just pay a guy to walk on the sidewalk and spin a big yellow "we buy gold!" sign

that's how we mine it from above ground

mining the below-ground metal takes a lot more people and machines and effort and stuff, which is crazy hard to do


Tue, 05/14/2013 - 19:44 | 3562716 Chaffinch
Chaffinch's picture

Another 22,000 ounces left the JPM vault yesterday.

Total Comex down below 8m ounces again ; )

Tue, 05/14/2013 - 19:56 | 3562732 fonzannoon
fonzannoon's picture

I imagine that if the big money up top was really in the process of a true run on the physical market, it would have gotten to the point of panic already. Unless people are fine settling in cash.

(I did not down arrow u)

Tue, 05/14/2013 - 20:04 | 3562764 Chaffinch
Chaffinch's picture

+1 Fonz.

They should be panicking but I agree Big Money is not there yet. When it happens I think it will be so quick we might miss it!

I guess the down arrow is because I am slightly off topic!

Tue, 05/14/2013 - 20:17 | 3562802 fonzannoon
fonzannoon's picture

These stories are entertaining and all...they just don't seem to add up. Kyle Bass famously said if only 4% of people ask comex for delivery "price will solve everything".

We keep reading about unprecedented demand in Asia, Australia, China, Japan, Canada, the U.K etc etc etc...

Yet 4 out of 100 rich bastards still have not knocked on the window and asked if they could see their shiny metal?

and I can pretty much buy gold anywhere right now?


Tue, 05/14/2013 - 20:35 | 3562836 oddjob
oddjob's picture

Asians have been buying Gold for thousands of years, I suppose you forgot to read that part. Its nice you made  Japan and China seperate from Asia. It seems hyperbole is your game too.

Tue, 05/14/2013 - 20:35 | 3562847 fonzannoon
fonzannoon's picture

I am trying to do two things at once, sorry about the asia comment.

So your prediction is no comex default for at least a few more thousand years. I guess you confirmed my thoughts, thanks.


Tue, 05/14/2013 - 20:42 | 3562854 Pinto Currency
Pinto Currency's picture



Are there any gold refineries is S.Africa?

Could be coin melt bars going to S.Africa for refining then on to the final destination.

Wed, 05/15/2013 - 03:05 | 3563833 Oracle of Kypseli
Oracle of Kypseli's picture

Agreed. Nothing is what it seems. S. Africa is most likely just the first stop.

Tue, 05/14/2013 - 20:39 | 3562864 oddjob
oddjob's picture

Never posted word one about a Comex default, never.

Tue, 05/14/2013 - 20:42 | 3562870 fonzannoon
fonzannoon's picture

I did, dumbass. You pointed out a mistake I made, which is cool. But if that is all you have to offer you seem to be the type that just trolls around here looking for spelling mistakes. Unless you actually have something worthwhile to add....

Tue, 05/14/2013 - 20:58 | 3562889 oddjob
oddjob's picture

Why such concern for such a small asset class?

<crickets>...yes I did edit that becuase you have no plausible answer.

Tue, 05/14/2013 - 21:04 | 3562935 fonzannoon
fonzannoon's picture

I stopped wasting my time with you when you made the incorrect assumption that I upvoted myself. It showed a lot about you and how you think. I have no further interest in your thoughts. Go troll someone else.

Tue, 05/14/2013 - 21:10 | 3562964 oddjob
oddjob's picture

one day I hope to own a fleet of trollers like you.

Tue, 05/14/2013 - 21:13 | 3562973 fonzannoon
fonzannoon's picture

Really? What happened to make due with less? Move to a rural place etc?

You are a fucking mess. Pull yourself together.

Tue, 05/14/2013 - 21:25 | 3563003 oddjob
oddjob's picture

says the guy that cant leave just one fucking thread on ZH without leaving some worthless comment on it. Get a Life.

Tue, 05/14/2013 - 20:43 | 3562874 oddjob
oddjob's picture

You are the one repeatedly refering too Bass, as far as I am concerned he is a primped up maggot in a suit.

Tue, 05/14/2013 - 20:49 | 3562892 fonzannoon
fonzannoon's picture

wow...interesting. I don't even know that I disagree with you about Bass. The jury is still out for me.

 I did not see this coming. Let me try this from a different angle.

Do you think he is correct in his views about the comex, and do you have any of your own? You have my undivided attention. No joke.


Tue, 05/14/2013 - 20:55 | 3562914 oddjob
oddjob's picture

I dont give a shit about the Comex. Pay off debt. Consume as little as possible. Place savings in PM's when possible. Move to a rural enviorment. Life a simple life.

Tue, 05/14/2013 - 21:32 | 3563026 greatbeard
greatbeard's picture

I've done all that.  Now what?

Tue, 05/14/2013 - 21:48 | 3563088 oddjob
oddjob's picture

Consider yourself in the top 1%, be very thankful that you had the foresight and ambition to put yourself in the place you are.

Tue, 05/14/2013 - 23:21 | 3563420 fuu
fuu's picture


Wed, 05/15/2013 - 07:08 | 3564028 Urban Redneck
Urban Redneck's picture

4% is not the same as |4|

do some simple math on what 4% of outstanding paper gold contract volume at the Comex amounts to and compare that to current Comex inventories and those at the time Bass made the comment

Tue, 05/14/2013 - 20:37 | 3562850 Pinto Currency
Pinto Currency's picture


Tue, 05/14/2013 - 20:40 | 3562865 fonzannoon
fonzannoon's picture

Keep editing your post oddjob to maxamize your jab, since you can't actually address my point.


Tue, 05/14/2013 - 20:48 | 3562890 oddjob
oddjob's picture

and keep upvoting yourself and we will all be fine then.

Tue, 05/14/2013 - 20:50 | 3562899 fonzannoon
fonzannoon's picture

watch me upvote myself now so you can see I was not upvoting myself before.

Nevermind my question. Since you assumed I upvoted myself earlier, and were wrong, I guess that's just how you roll.

Tue, 05/14/2013 - 21:02 | 3562930 CCanuck
CCanuck's picture

Hey Fonz,

The last rich bastards knocking on the window, got Corzine'd. I would have to think that the players left in the game are taking cash+prem. Then taking cash and buying physical anywhere, probably getting 105-110oz worth after cash settlement, why would you want that to stop??? I would'nt if was a playa, but I am just some Crazy Canuck who knows shit about shit.


Tue, 05/14/2013 - 21:06 | 3562948 fonzannoon
fonzannoon's picture

" I would have to think that the players left in the game are taking cash+prem Then taking cash and buying physical anywhere"

Now that makes a ton of sense. It just seems like that would be showing up elsewhere.

I bring it back to Cyprus. The rich russians found a way to get their money out. The little Cypriot got screwed. I am the little guy. How come I can buy gold pretty much anywhere right now? You would think I would be frozen out while the big money finds a way, no?

Tue, 05/14/2013 - 22:13 | 3563183 CCanuck
CCanuck's picture

Again, I am just a crazy canuck, but I work part-time at a local coin shop, get some insight into flows and demand.

You can still find it beacuse the little guys are rationed (US & CAN Mints) just enough (peaked at 4-6weeks delivery) to meet demand for coin investors, plus turning over sold coin collections(scrap) and small investor bullion (maples,ASE,Koalas) directly back to the small investor via LCS, helps keep the demand in check for the big guys to rip phys from the GLD and JPM, all the while making PM look like shite to any noobie stackers. I believe its MOPE that has stopped the Western little guys outta the pool, they think the pool is full of sharks and are scared of moving savings out of fiat and into real money.

You will know when your frozen out, it will get real cold, real fast after the last bit of physical has been taken from the bullion banks, or comex.


Tue, 05/14/2013 - 22:16 | 3563200 fonzannoon
fonzannoon's picture

CCanuck, I sincerely thank you for your insight. awesome man. Much appreciated.

Tue, 05/14/2013 - 21:19 | 3562990 fasTTcar
fasTTcar's picture

Because it is costing over 5% premium to buy physical in large quantities.

Wed, 05/15/2013 - 06:43 | 3564005 auric1234
auric1234's picture

Watching under your car for the rest of your life is even more costly.


Tue, 05/14/2013 - 20:25 | 3562821 BaBaBouy
BaBaBouy's picture

USA Is Being Ransacked For Real Hard Assets, While Loading Up On Fiat Papers And Exotic Leverage.


This Financial Shit Will Not End Well...


Go BEN Shalom Goooooooo ...

Tue, 05/14/2013 - 20:45 | 3562881 rogeliokh
rogeliokh's picture

F*cking cocksuckers cut my wealth in half already Silver tanking. $23 so far

50% from the top and it's happenning while every bankster around the world is printing

f*cking money!!! F* Fraud!

Tue, 05/14/2013 - 21:56 | 3563122 Bobbyrib
Bobbyrib's picture

When "Big Money" wants gold, it will be confiscation time. Right now it's time to go boating.

Wed, 05/15/2013 - 00:15 | 3563586 DeadFred
DeadFred's picture

My theory is this story is about a decades old confiscation. Roosevelt took the American's gold, melted it down and stuffed it in vaults. Was it ever refined? Perhaps not. They're nearly out of gold for delivery but can't use the available unwrought gold. South Africa has surplus refining capacity and can turn the Roosevelt's gold around to make it deliverable. Bet the gold make the round trip, not as K's but as deliverable bars. End game activity.

Tue, 05/14/2013 - 22:56 | 3563331 Buck Johnson
Buck Johnson's picture

It's a two tier settlement I bet.  The big boys are told they will get gold and receive it but the smaller ones are told they will settle in cash.  There is a run happening and always remember, a run is done first quietly by the elite.  Once done then they yell fire and everybody sees that there isn't enough for everybody and the fighting begins.

Tue, 05/14/2013 - 20:00 | 3562755 seek
seek's picture

And eligible is going to break below 6M pretty soon, too.

Sure looks like the South African gold came from JPM's registered pool to me.

Tue, 05/14/2013 - 20:42 | 3562872 Ted K
Ted K's picture

Damn man, you SURE???? I thought Eric Sprott pooped the gold bars out of his butt while TylerDurden stood underneath with palms open with a sheepish grin and pigtails in a type of Sprott fetish.

Tue, 05/14/2013 - 19:34 | 3562689 I think I need ...
Tue, 05/14/2013 - 19:53 | 3562737 Fuku Ben
Fuku Ben's picture

I think some of those UT physical gold holdings he recommended they take possession of have left the country

Tue, 05/14/2013 - 19:35 | 3562694 SgtSchultz
SgtSchultz's picture

I know nothink!

Tue, 05/14/2013 - 19:28 | 3562673 fonzannoon
Tue, 05/14/2013 - 19:29 | 3562676 SHEEPFUKKER

This is awesome, send gold to gold producing country. Makes sense. 

Tue, 05/14/2013 - 19:43 | 3562713 Rustysilver
Rustysilver's picture


Yes, this is new "normal". Up is down, down is......

Tue, 05/14/2013 - 19:30 | 3562680 espirit
espirit's picture

Now you see it, now you don't.

Tue, 05/14/2013 - 19:31 | 3562682 markettime
markettime's picture

Doesn't China own a bunch of stuff in South Africa? Maybe that is where all of the relics are going....

Tue, 05/14/2013 - 19:50 | 3562727 jerry_theking_lawler
jerry_theking_lawler's picture

ah, the old rope-a-dope by China....nice!

Tue, 05/14/2013 - 19:34 | 3562690 Bay of Pigs
Bay of Pigs's picture

It sure seems things are not as they appear when it comes to physical gold production, exports, imports and holdings these days.

Maybe Jeff Christian has the inside scoop on this?  :/


Tue, 05/14/2013 - 19:34 | 3562691 Quinvarius
Quinvarius's picture

COMEX is the cheapest gold mine around.  Lowest all in mining cost and anyone can mine it.

Tue, 05/14/2013 - 19:40 | 3562706 SHEEPFUKKER

Does the CRIMEX mine bitcoins as well?

Tue, 05/14/2013 - 19:50 | 3562730 jerry_theking_lawler
jerry_theking_lawler's picture

nope. its just a tungsten mine.

Tue, 05/14/2013 - 20:02 | 3562760 seek
seek's picture

No, mining bitcoins takes far more computational effort than just forging a ledger entry.

Tue, 05/14/2013 - 20:38 | 3562860 tmosley
tmosley's picture

It's only cheap if you don't get MF'd. Which you will.

Tue, 05/14/2013 - 19:36 | 3562695 Scro
Scro's picture

Hmmm, I'm going to the mall and think about this. May also do some planking.

Tue, 05/14/2013 - 20:36 | 3562851 RafterManFMJ
RafterManFMJ's picture

Meet me in front of Auntie Anne's; we can plank and tebow together.

Tue, 05/14/2013 - 21:49 | 3563096 TheFourthStooge-ing
TheFourthStooge-ing's picture


Meet me in front of Auntie Anne's; we can plank and tebow together.

Oh long Johnson

Tue, 05/14/2013 - 19:42 | 3562711 GOSPLAN HERO
GOSPLAN HERO's picture

Impeach Obama!

Tue, 05/14/2013 - 20:22 | 3562817 WAMO556
WAMO556's picture

Impeachment is done by both houses of congress.


Trials for treason of the 550 other traitors will have to be done by the Constitutional People's Court.

It's totally amazing that insider trading is legal with these folks, along with voting themselves pay raises, retirement/pensions...etc...

Tue, 05/14/2013 - 20:30 | 3562838 Ignatius
Ignatius's picture

America, we've been punked.

Tue, 05/14/2013 - 19:49 | 3562725 BanksterSlayer
BanksterSlayer's picture

Maybe South Africa was in great need of tungsten. In that case, ordering Take-Out from NYC makes perfect sense.

Tue, 05/14/2013 - 21:23 | 3563001 Divine Wind
Divine Wind's picture




Or maybe S. Africa discovered that previously delivered bars were in fact Tungsten and they wanted them replaced....

Tue, 05/14/2013 - 20:02 | 3562759 Wakanda
Wakanda's picture

If only "$982 million worth of gold has left JFK" can you imagine how much is being loaded onto Citations, Gulfstreams, Bombardiers, Dassaults at Morristown, Teterboro, Lakewood, Tom's River, New Haven, Hartford, Bridgeport... to be shipped to offshore hidey holes?

Gold and Silver are on sale FiSHeS!

Stack 'em!

Tue, 05/14/2013 - 20:05 | 3562765 q99x2
q99x2's picture

Was Mr. T aboard the plane?

Tue, 05/14/2013 - 20:05 | 3562766 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

it seems that all BRICS are importing gold and setting up oil/gold swaps with Iran and others. SA needs oils to dig out the rest of them thar diamonds, golds, platinums etc

Tue, 05/14/2013 - 20:13 | 3562785 SilverIsMoney
SilverIsMoney's picture

All this very intriguing gold and silver news these past 3 weeks and still... no price movement. 

I'm still happily stacking and holding. Despite the stagnant prices this is getting more interesting by the day... 

Tue, 05/14/2013 - 20:13 | 3562786 AUD
AUD's picture

The Perth Mint regularly imports gold by the pallet load - from its unallocated account with a bullion bank in London. Has done for years.

The 'paper' markets will fail when they fail, not before & certainly not when Mike Kreiger thinks they will. All you fools need to get on with your lives rather than reading shit from the likes of this guy.

Tue, 05/14/2013 - 20:40 | 3562868 CCanuck
CCanuck's picture

And your shit is more reliable??  = junked

"this guy" is just trying to share info, just like you did.


Tue, 05/14/2013 - 20:51 | 3562900 AUD
AUD's picture

Strikes have reduced the supply from mines & the Mint is importing gold. So what? Nothing. Mint's do it all the time. The Mint will pay $ for its imported gold with the $ it gets selling Krugerrands.

You are wasting your time trying to read anything into it.

And get a real accent you dumb Canadian fuck.

Tue, 05/14/2013 - 22:29 | 3563245 CCanuck
CCanuck's picture

You sound like one of them real smart guys that see everything EH?

I imagine you as one of them educated past your intelligence types, and thats not based on your accent either.

Now take off Eh...ya Fucking Hoser!

Tue, 05/14/2013 - 21:05 | 3562939 Bay of Pigs
Bay of Pigs's picture

Like I'm supposed to believe the cocksuckers down at the Perth Mint on supply/demand issues and allocated/unallocated accounts.

Haha...thats pretty rich considering this topic on possible S African gold shortages.


Tue, 05/14/2013 - 22:23 | 3563225 CCanuck
CCanuck's picture

+2 BoP...One for the quick open hand slap to the face..

And one for well applied "Cocksuckers"

Tue, 05/14/2013 - 20:12 | 3562787 JLee2027
JLee2027's picture

Kruggerands are good stuff. 

Tue, 05/14/2013 - 20:14 | 3562789 Caviar Emptor
Caviar Emptor's picture

The fact that gold is in the crosshairs confirmes the level of fear that gold provokes. It is not acceptable to the system that your wealth should grow. If slaves were paid fair wages, they would eventually be able to buy their freedom

Tue, 05/14/2013 - 20:19 | 3562812 Al Huxley
Al Huxley's picture

I think the bigger fear is that the fundamental flaws in the big ponzi would be exposed.  I doubt they care one way or the other about the majority, other than a seeing us as a bunch of expendable eaters.  But everything over the past 6 months or so especially is indicating that the system wind-down is now happening.  Bankers actively positioning themselves long paper gold, so when the default happens it will be 'those damned hedge fund speculators selling what they don't have' who get the blame.

Tue, 05/14/2013 - 20:23 | 3562820 fonzannoon
fonzannoon's picture

Al what do you make of Paulson? Is he stuck in a massive trap right now? You think he has already asked for delivery and been turned away?

Tue, 05/14/2013 - 20:17 | 3562800 SeeNoEvil
SeeNoEvil's picture

Ik weet niet, Ik sprek niet, Ik kijk het niet een Ik luist niet maar wil ik weet vaarom het geld ann te Zuid Afrika gegeven ? My rough stab at Afrikaans language .

Anyway must be some big time demand of Krugerrands to be satisfied that they have to import Au as my buddy's from Hong Kong prefer Krugerrands an by they way iam buy more as price drops on AU so keep selling cause iam buying 

Tue, 05/14/2013 - 20:59 | 3562925 Notveryamused
Notveryamused's picture

Nothing exciting unfortunately - South Africa used to be the biggest gold producing/mining country in the world but because output has declined drastically in recent years their main refinery is looking overseas for business.

From rand refinery annual report 2012

"We will exploit opportunities to expand into South and North America, the Middle East and Asia by: Gaining access to scrap markets; Sampling and assaying of scrap and doré at source, before shipping to South Africa."

"Given that the South African gold mining industry is in decline, it is vital for the sustainability of our business that we attract customers, source materials and develop partnerships beyond the borders of our country and our African heartland. We have made excellent progress in establishing key customer relationships in North America for the sourcing of low-grade material containing gold and silver. The possibility of establishing sampling and evaluation facilities in North America is also being explored as well as the feasibility of increasing the grade of the sourced material prior to its delivery to Rand Refinery in South Africa for smelting. This would enhance the operational efficiency of our smelter substantially."

Tue, 05/14/2013 - 21:13 | 3562970 Dead Canary
Dead Canary's picture

Agreed. I've been reading KWN for two years now proclaming: "PRICE EXPLOSION EMINENT!".

I try to take rumors with a grain of salt. I'm still a believer, just patient.

Tue, 05/14/2013 - 21:17 | 3562986 Dr. Gonzo
Dr. Gonzo's picture

Our trade defict with China will probably flip flop this way when they back their Yuan with gold since we won't be able to afford their goods anymore and they will suck the remaining gold out of here. 

Tue, 05/14/2013 - 21:36 | 3563042 Notveryamused
Notveryamused's picture

A more interesting story to me regarding the Rand Refinery is that Warren Buffet who claims to hate gold bought South Africas largest jewellry supply business located there in Oct last year.
In fact in the last year Buffet through Richline (a wholly owned subsidiary)
has bought 4 of the world's largest 'Jewellry supply companies.' (They buy gold direct from refineries and also purchase scrap...)

The best part is this lets him keep his gold stock-piling under the radar and when the confiscations come, it will all be classified as 'Jewellry' not 'investment gold' - smart man.

Tue, 05/14/2013 - 21:44 | 3563078 Ignorance is bliss
Ignorance is bliss's picture

For some reason, I can't seem to wish him well.  

Tue, 05/14/2013 - 21:47 | 3563081 SqueekyFromm
SqueekyFromm's picture

Why oh why is Gold being shipped to South Africa??? It must be some sort of a Super Sekrit Plot!!! OH, an Irish Poem comes to mind:

Blue Veldt Fit

They shipped lots of Goldt to the Veldt,

From wherever it had been heldt.

The Gold Bugs, a'roil,

Their heads in tin foil,

Were certain the whole damn thing smeldt!


Squeeky Fromm, Girl Reporter

Wed, 05/15/2013 - 08:06 | 3564129 player333
player333's picture


Tue, 05/14/2013 - 22:21 | 3563222 rosiescenario
rosiescenario's picture

Coal to Newcastle....either this is total bs or the So. African mines are in far worse production condition than anyone imagined....which makes me really wonder more about platinum as there are 2 mines in So. Africa which produce most of the world's supply.

Tue, 05/14/2013 - 23:29 | 3563448 Zulu Bravo
Zulu Bravo's picture

Nothing odd about this....  gold is after all a currency and commodity.  Rand Refineries might have had a commitment to supply Mr. X  .......  Mint needs to make Krugerrand goes to the open market. keep a lookout for the carry gold market grow exponentially    

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