Tag Archives: Heraeus

Investing in the Noble Metal of Platinum

Along with gold and silver, platinum is a recognized investment precious metal which is fabricated in the form of high quality bullion bars and bullion coins by some of the world's leading precious metals refineries and mints.

Importantly, as a recognized investment precious metal, platinum bars and platinum coins from these refineries and mints are exempt from Singapore's Good and Services Tax (GST). This means that there is no GST to pay when you buy platinum bars and coins from BullionStar in Singapore.

Platinum's High Intrinsic Value

Like gold, platinum is relatively scarce and has a relatively high intrinsic value and market value. And like gold and silver, platinum also has many industrial and technological applications. Platinum's value is thus based on a combination of its scarcity of supply and also on its physical and chemical properties. These properties in turn drive the diverse global demand sources for platinum across sectors such as the automotive, industrial and jewelry industries in addition to the investment sector.

For example, platinum has well-known catalytic properties which allow it to speed up chemical reactions without it being altered in the process. Hence platinum is used in autocatalysts, in the chemical industry and in fuel cells. Platinum is also a very strong attractive metal that does not corrode and that is both ductile and malleable, hence it is a very popular precious metal in the jewelry industry. Since platinum is resistant to corrosion and oxidation, it is classified, along with a small number of other metallic elements, as a noble metal.

Platinum - A Noble Metal
Platinum - A Noble Metal

Platinum is a relatively scarce metal in the earth's crust and even rarer than gold. In contrast to gold, annual platinum supply and platinum demand is far lower than annual supply and demand in the gold market. According to Thomson Reuters GFMS, supply of platinum in 2016 totaled 7661,000 ozs (238 tonnes) of which 188 tonnes came from platinum mining with a further 50 tonnes was derived from autocatalyst and platinum jewellery scrap recycling.

Within platinum extraction and mining, over 70% of global mine supply comes from South Africa, with a further 12% from Russia, 7% from North America, and the remaining 10 - 11% from elsewhere. South Africa's dominance of global platinum supply is also evident in the composition of the recently established World Platinum Investment Council (WPIC) which is a platinum investing advocacy association founded by six South African platinum mining companies, namely Anglo-American, Lonmin, Implats, Aquarius, Northam, and Royal Bafokeng.

On a country specific basis, platinum mining's concentration in a handful of countries can sometimes set up supply shocks, for example, platinum mining strikes in South Africa or geo-political risks/sanctions concerning Russia. These shocks can at times affect platinum prices to the upside.

On the demand side, according to GFMS, autocatalysts are the largest global demand driver for platinum. For example, autocatalysts accounted for 102 tonnes of platinum demand in 2016 followed by jewellery (68 tonnes) and other industrial applications (57 tonnes), with investment (bars, coins and platinum-backed Exchange Traded Funds) accounting for the remaining 16.8 tonnes.

Note that in its pure form, platinum is available as platinum grains (used in the jewelry sector) and as platinum sponge (used in industrial applications) in addition to platinum bars and coins. However, other forms of platinum are designed for further onward processing and should not be confused with investment-grade platinum. For investment and storage purposes, refineries and mints will always produce platinum in the form of platinum bars and platinum coins, and furthermore, only bars and coins from recognized refineries and mints can be classified as investment precious metals and be exempt from Goods and Services Tax (GST).

Heraeus Minted Platinum Bars
Heraeus Minted Platinum Bars

Singapore GST Exemption for Investment Platinum Bars and Coins

Since October 2012, the Singaporean Government has exempted Investment Precious Metals (IPM) from Singapore's Goods and Services Tax (GST). To qualify as IPM, precious metals must be in the form of a bar, ingot, wafer or coin which meets specific criteria. Platinum bars qualify as IPM in Singapore if the platinum bar has a platinum purity of at least 99%, can be traded on an international bullion market, and is produced by a platinum refiner listed on the current or former Good Delivery list of the London Platinum and Palladium Market (LPPM).

The LPPM is a London-based trade association for the global wholesale platinum and palladium markets. There are currently more than 30 refineries on the current LPPM Good Delivery List for Platinum including such refineries as Heraeus of Germany, Johnson Matthey of the UK, and the four large Swiss precious metals refineries Argor-Heraeus, PAMP, Valcambi, and Metalor.

Investment grade platinum bars produced by accredited refiners will generally carry the name of the refiner or refiner stamp or brand on the bar. If a refinery has the LPPM accreditation, the Singaporean IPM rules assume that the refinery's bars are capable of being traded on an international bullion market. Some platinum bars may in turn bear the name of a specific bank such as Credit Suisse or UBS. These bars are known as bank-branded bars and these bars also qualify as IPM if produced by a refiner on the LPPM Good Delivery List.

For platinum coins, a GST exemption applies if the coin is a bullion coin, has a platinum purity of at least 99%, and is listed on the GST schedule list of qualifying coins. Qualifying platinum coins include:

  • Royal Mint Platinum Canadian Maple Leaf
  • US Mint Platinum American Eagle
  • Austrian Mint Platinum Philharmonic
  • Perth Mint Platinum Platypus and Platinum Koala
  • Royal Mint Platinum Britannia, Platinum Lunar and Platinum Queens Beast

Physical platinum investment bars and coins are very popular in markets such as the US, Japan, China and the rest of Asia, and the market is a growing one on the back of the existing popularity of high quality platinum jewelry in these markets.

Platinum Bullion Bars

BullionStar's range of investment grade platinum bars is extensive and features platinum bars in a number of weights from the world's most prestigious platinum refineries. All platinum bars offered by BullionStar are exempt from Singapore's Goods and Services Tax as all bars have a platinum purity of 99.95% and are fabricated by platinum refineries such as Valcambi of Switzerland, Heraeus of Germany, and Argor-Heraeus of Switzerland. All of these refineries are listed on the current LPPM Good Delivery List for Platinum and additionally all of these refineries are also full members of the LPPM. Popular weights for platinum bars stocked by BullionStar include 1 kilogram, 500 grams, 100 grams and 1 oz.

Credit Suisse minted Platinum bar
Credit Suisse minted Platinum bar

For example, Valcambi produces a 1 oz minted platinum bar which is presented in its own secure blister pack which doubles as the bar's assay card. The Heraeus refinery of Germany produces minted platinum bars in a range of weights from a 100 gram minted platinum bar, through 500 gram minted platinum bars, and up to a 1 kilogram platinum bar. Swiss refiner Argor-Heraeus, now fully owned by Heraeus of Germany, fabricates its own minted platinum bars with the distinctive Argor-Heraeus logo, for example the Argor-Heraeus 1 kilogram minted platinum bar.

BullionStar at times also carries bank-branded platinum bars, such as a Credit Suisse 100 gram platinum bar which has been produced by Swiss refiner Valcambi on behalf of the Swiss Bank Credit Suisse. These platinum bars are also GST exempt in Singapore as they have been fabricated by a refiner, Valcambi, which is on the LPPM Good Delivery List for Platinum. Valcambi has in the past had a very close connection with Credit Suisse and was at various stages both fully-owned and partially owned by Credit Suisse.

Platinum Bullion Coins

Most of the world's best-known national precious metals mints produce a bullion coin in pure platinum. These include platinum coins from the Royal Canadian Mint (RCM), Austrian Mint, US Mint, and the Perth Mint. All of these mints are fully owned by their respective national governments and all of these mints stand over the authenticity and quality of their bullion coin products.

Some platinum bullion coins are produced every year, and some are produced with more sporadic production runs. Many of the bullion platinum coins offered by BullionStar are in similar designs to their gold and silver coin counterparts and are issued in the convenient and standard 1 ounce weight. All of these platinum bullion coins are also legal tender (non-circulating) in their countries of issue.

For example, the Royal Canadian Mint produces a 1 ounce Platinum Maple Leaf with the distinctive maple leaf design. This design will be familiar to investors in the Royal Canadian Mint's Gold Maple Leaf and Silver Maple Leaf coins. RCM Platinum Maple Leafs are produced on an annual basis, including the years 2018, 2017, and 2016.

Royal Canadian Mint 1 oz platinum Maple Leaf
Royal Canadian Mint 1 oz platinum Maple Leaf

The Austrian Mint also issues a 1 oz Platinum Philharmonic bullion coin each year which is intricately designed with highly-stylized motifs celebrating the world-famous Vienna Philharmonic orchestra.

Those who invest in silver and gold Eagle bullion coins from the US Mint will also be interested in the US Mint's flagship 1 oz Platinum Eagle bullion coin which is handsomely designed with imagery of the Statue of Liberty and a soaring American Eagle. The Platinum Eagle, which was first released in 1997, is the only platinum coin ever officially issued by the US, and has the highest face value (US $100) ever to appear on any US coin.

The Perth Mint's has produced a number of platinum bullion coins over the years although not in all sequential years. From 1988 to 2000, the Perth Mint issued a Platinum Koala bullion coin in a number of weight denominations. Then in 2011, the Mint began issuing its flagship 1 oz Australian Platypus Platinum coin. Production of the Platypus Platinum coin continued until 2017 when it was superseded by the Perth Mint's Australian Platinum Kangaroo coin 1 oz bullion coin.

Another option offered by BullionStar for those who wish to begin saving and investing in platinum is the Bullion Savings Program (BSP). With BullionStar's BSP, customers purchase grams of platinum, gold or silver which are fully-backed by physical precious metals held in BullionStar's stock inventory. These metal grams are available for a low price premium and low spread and are therefore a cost-efficient way to begin saving in precious metals. The metal grams can also be converted in precious metals bars once sufficient grams have been accumulated.

For example, with the Platinum Bullion Savings Program,  customers can purchase grams of platinum that are fully backed by platinum held in BullionStar's inventory. BSP platinum grams have a low-cost storage fee, and can be converted into 1 kg Heraeus Platinum bars at no extra cost. These bars can then be held by customers in BullionStar's Vault Storage, or physically withdrawn and delivered. Alternatively, investors in BSP platinum grams can sell their platinum grams back to BullionStar at any time.

The World’s largest Precious Metals Refineries

There are many precious metals refineries throughout the world, some local to their domestic markets, and some international, even global in scale. Many, but by no means all, of these refineries are on the Good Delivery Lists of gold and/or silver. These lists are maintained by the London Bullion Market Association (LBMA) and they identify accredited refineries of large (wholesale) gold and silver bars that continue to meet rigorous proficient standards of refining and assaying, and that are, at the same time, financial viable and stable companies. Currently, there are 71 refiners on the LBMA’s gold Good Delivery List and 81 refiners on its silver Good Delivery List, or which just over 50 of these refineries are accredited to both the LBMA’s gold and silver lists.

But within the top echelons of the world’s precious metals refineries, a number of names stand out due to their sheer scale and pedigree, as well as their global brand recognition in the production of a wide range of investment grade gold and silver bullion bars. These names include PAMP, Argor-Heraeus, Metalor Technologies, Heraeus, Valcambi, Tanaka Kikinzoku Kogyo, and Rand Refinery.

5000 Tonnes of Gold

Together these seven refinery groups have a combined gold refining capacity approaching a mammoth 5000 tonnes per year. And that’s not even taking into account their refining capacity for other precious metals such as silver and platinum. Valcambi has a gold refining capacity of 1600 tonnes per annum, Metalor 800 tonnes, Heraeus 400 to 500 tonnes, PAMP over 450 tonnes, Argor-Heraeus over 400 tonnes, Tanaka 500 tonnes, and Rand Refinery 600 tonnes.

Notably four of these refineries are based in the gold refining powerhouse of Switzerland, of which three, PAMP, Valcambi and Argor-Heraeus, are clustered literally within a few kilometres from each other in the golden triangle of Swiss refineries centred within the very south of the Swiss canton of Ticino near the Swiss-Italian border. Metalor Technologies is the exception, as its Swiss headquarters facility is based in Neuchâtel, in the north-west of Switzerland. Of the non-Swiss refineries, Heraeus, Tanaka and Rand Refinery, these are headquartered in Germany, Japan and South Africa, respectively.

crucible
Gold Refineries, Heraeus, PAMP, Valcambi, Metalor, Argor-Heraeus, Tanaka, Rand Refinery

International in Scale and Ownership

Although three of the four giant Swiss refineries have historically each been owned by a Swiss bank, and although groups such as Heraeus and Tanaka are still privately owned and controlled by founding shareholders, its important to note that none of these giant refineries are purely local concerns, so their headquarters locations are to some extent a secondary concern. From operating facilities, to metal supplier networks, to customer bases, all of these refineries are now absolutely global in nature.

For example, Metalor operates four precious metals refineries globally, in Switzerland, Hong Kong, Singapore and Massachusetts (US). Heraeus runs gold refining and gold bar production facilities in Hanau (Germany), Hong Kong, and Newark (US). In addition to its Swiss refinery, PAMP, part of the Geneva-based MKS PAMP group, runs a joint venture refinery in New Delhi, in conjunction with MMTC, a large state-owned Indian trading company.

In many cases, the ownership of these refineries is international and cross-border in nature, and increasingly so over the last few years. Agor-Heraeus is owned by the Austrian Mint and two German entities Commerzbank and Hereaus. In 2015, Valcambi was acquired by Indian jewellery producer Rajesh Exports, with one of the selling shareholders being US-based gold mining giant Newmont. Indeed, just last month, Tanaka announced the acquisition of Metalor Technologies, a development which has initiated an upcoming major Japanese - Swiss precious metals refinery combination. Metalor was already international in ownership, as its controlling shareholders are French and Belgian private equity companies. While Rand Refinery of South Africa is  exclusively owned by five of the largest South African gold mining companies, some of these owners, such as Anglogold Ashanti and Goldfields, are vast international concerns. Rand Refinery has also increasingly had to cast its new wider for sourcing gold to process in its refinery as South African gold mining output has declined. Rand Refinery now refines over 75% of the gold mined on the African continent (excluding South Africa), and is also increasingly tapping into gold mining output from the US and Asia.

The World's Refinery Referees

Another indicator of the esteem within which these select refineries are held is their membership of the exclusively small panels of good delivery list referees which have been appointed to run the LBMA’s good delivery lists, and similar good delivery lists maintained by the London Platinum and Palladium Market (LPPM) for platinum and palladium bars.

The LBMA’s good delivery referee panel is a five refinery member panel made up of Argor-Heraeus, Metalor Technologies, PAMP, Rand Refinery and Tanaka Kikinzoku Kogyo. The LPPM’s referee panel also comprises five refiner members, namely Metalor Technologies, PAMP, Valcambi, Tanaka Kikinzoku Kogyo and platinum specialist Johnson Matthey. So not only are these refineries listed on these LBMA and LPPM good delivery lists, they actually help run the entire set of good delivery standards and processes. With the upcoming acquisition of Metalor by Tanaka, these LBMA and LPPM referee lists may need some adjustment, since Tanaka and Metalor are members of both referee panels.

Overwhelmingly, the gold and silver bars of these refiners are all also accepted as good delivery for the COMEX gold 100 oz and gold kilo futures contracts, the gold contracts of the Tokyo Commodity Exchange (TOCOM), the Dubai Good Delivery gold list maintained by the Dubai Multi Commodities Centre (DMCC), and the good delivery standards of the Shanghai Gold Exchange.

Investment bullion bars

Although all of these precious metals refineries, to various extents, supply semi-fabricated precious metals, alloys and industrial precious metals suppliers to a diverse set of industrial and jewellery sector clients, it is perhaps the investment grade bullion products of these giant refiners that they are best known to a global audience.

PAMP fabricates a vast range of cast and minted gold and silver bars which are extremely popular across Asia and the Middle East, in fact, the premier brand in those regions. Valcambi manufactures a wide range of gold, silver and platinum / palladium investment bars, as well as precious metal coins and medals, and has become well-known as the international supplier of Combibars. Heraeus, Metalor and Argor-Heraeus produce a wide selection of gold and silver bars ranging from large wholesale (good delivery) bars through to smaller cast and minted gold and silver bars. Tanaka’s gold bars dominate the Japanese market and notably, Tanaka is also the sole distributor in Japan of gold and silver bullion Maple Leafs coins from the Royal Canadian Mint and gold and platinum Philharmonic coins from the Austrian Mint. Tanaka's acquisition of Metalor will be interesting in terms of how the combined group markets and distributes its investment bullion products going forward.

It's also not widely appreciated that Rand Refinery has refined over 50,000 tonnes of gold since it first opened in 1921, which is a staggering nearly one-third of all the gold ever mined. Rand Refinery large gold bars are held widely by central banks across the world. Rand Refinery’s flagship gold bullion Krugerrand coin is also held very widely, with over 60 million Krugerrands minted since 1967.

This article has not touched on the Perth Mint, Royal Canadian Mint or Royal Mint, which its important to remember, each operates its own precious metals refinery facilities in addition to being a sovereign national mint.

In summary, the seven refineries featured above are truly giants of the industry, and their longevity and customer trust attest to the authenticity and quality of their investment bullion products.

To learn more about the world's top precious metals refineries featured in this article, please see the full refinery profiles which have now been published on BullionStar's Gold University pages:

Heraeus: https://www.bullionstar.com/gold-university/heraeus-refinery

PAMP: https://www.bullionstar.com/gold-university/pamp-refinery

Valcambi: https://www.bullionstar.com/gold-university/valcambi-refinery

Metalor: https://www.bullionstar.com/gold-university/metalor-refinery

Argor-Heraeus: https://www.bullionstar.com/gold-university/argor-heraeus-refinery

Tanaka Kikinzoku Kogyo: https://www.bullionstar.com/gold-university/tanaka-refinery

Rand Refinery: https://www.bullionstar.com/gold-university/rand-refinery

In addition, the refining activities of the Royal Mint, Royal Canadian Mint and Perth Mint can be consulted in their respective profiles, also on BullionStar's Gold University pages:

Royal Mint: https://www.bullionstar.com/gold-university/the-royal-mint

Perth Mint: https://www.bullionstar.com/gold-university/perth-mint

Royal Canadian Mint: https://www.bullionstar.com/gold-university/royal-canadian-mint

 

Wrap-Up of BullionStar’s visit to FreedomFest 2016 in Las Vegas

Saturday July 16 wrapped up BullionStar's attendance at its first FreedomFest conference and convention in Las Vegas, Nevada. During the event from Wednesday July 13 through to the Saturday afternoon, the BullionStar team interacted with a wide-range of interesting event attendees, discussing topics ranging from the role of precious metals in investors portfolios, to the safety and security of having offshore storage of investment gold and silver at BullionStar's vault facility in Singapore.

Prospective US customers were interested in the fact that there are no sales or other taxes on bullion in Singapore, no reporting requirements on bullion, and that Singapore is a safe and stable political jurisdiction which upholds property ownership rights and where the Singaporean government actively supports the gold sector. On the topic of specific vaulting infrastructure, potential customers learned that BullionStar's "My Vault" facility provides secure, insured, allocated and segregated bullion storage with 24/7 on-line access to your holdings, using multiple levels of auditing, and that you can hold both bullion and cash on your BullionStar account, thereby using your BullionStar account as a real alternative to a bank account in Singapore.

BullionStar Grand Prize Draw - Silver Bars

Throughout the 3 day convention, attendees could enter a draw at the BullionStar stand for a chance to win one of three substantial silver bar prizes. Additionally, everyone who entered the draw received a free 1/10 troy oz silver coin of .999 purity produced by Golden State Mint, a coin with a design based on the Walking Liberty silver half-dollar historically issued by the US Mint.

The prize draw for the BullionStar silver bars took place on Saturday afternoon as the conference was wrapping up. First prize in the competition was a BullionStar 1 kg silver bar worth nearly US $800. BullionStar silver bars are 99.99% pure silver bars with a high-lustre finish produced by German refinery Heraeus on behalf of BullionStar. Second price was a 10 troy oz Heraeus minted silver bar, produced by Heraeus at its refinery in Hanau, Germany, while third prize was a 5 troy oz Heraeus minted silver bar.

Luke Chua, BullionStar COO and Torgny Persson, BullionStar CEO sum up their impressions of FreedomFest 2016

One of the major themes resonating at this year's FreedomFest event appeared to be that the founding principles of the US such as property ownership rights, personal liberty, and freedom of speech are being eroded, and that the government is encroaching on personal privacy. These themes were also picked up by Rand Paul's keynote speech noted in a previous BullionStar dispatch. A common talking point for people who came to the BullionStar stand during FreedomFest was the worldwide banking reporting obligations imposed on banks by the US Foreign Account Tax Compliance Act (FATCA) rules and regulations.

Beyond the Frozen Monopoly - Third Party Candidates

Given the current media focus on Republican and Democratic candidates in the upcoming 2016 US presidential election, US and international media often forget that there are other parties’ candidate nominees running in the US presidential race such as Gary Johnson of the Libertarian Party and Jill Stein of the Green Party. And so FreedomFest was eye-opening in that it was a reminder that other political parties do exist in the US apart from these two powerful incumbent parties, and that there is plenty of political thinking in the US outside the mainstream media's narrowly defined consensus.

In a Reason.TV interview conducted at FreedomFest with Johnson, former governor of New Mexico, and his running mate for vice-president, William Weld, former Governor of Massachusetts, Weld opened the interview with the interesting perspective that there is a “frozen monopoly of the two parties that has frozen a lot of people's thinking in place,… And they think, 'I have to be a right-winger,' or, 'I have to be a left-winger.' They're not thinking, 'What do I think?”

Steve Forbes - Gold Keeps its Intrinsic Value

During another interview at the convention, Steve Forbes, editor-in-chief of Forbes Magazine, posed a very timely and interesting question, asking not which way the Fed will move on interest rates but “Why is the Federal Reserve manipulating interest rates in the first place?”. Forbes highlighted that interest rates are the cost of borrowing money and rewarding lenders, and that “by manipulating interest rates, the Fed has deformed credit markets”.

On the subject of gold, Forbes said that “gold is an insurance policy against turmoil and against government’s mis-behaviour towards the currency” and he underscored that it was important to remember that "gold keeps its intrinsic value", and that the price changes in gold are just people’s changing perceptions of the value of currencies. No doubt most BullionStar readers would tend to agree with these sentiments.

That wraps up our coverage of the FreedomFest 2016 event. We hope that these insights have been helpful, and we look forward to providing readers with updates at future events around the world that BullionStar may attend.