Tanaka Refinery

Introduction

The Tanaka Kikinzoku Group[1] is a Japanese group of specialist precious metals companies held under umbrella holding company Tanaka Holdings Co Ltd. Tanaka is central to the Japanese Gold Market, as it is the country’s largest gold and platinum group metals refiner, and the biggest producer of gold bars in Japan.

The group’s Tanaka Kikinzoku Kogyo company trades, refines and recycles precious metals and produces investment grade gold, platinum and silver bars. The group’s Tanaka Kikinzoku Jewelry company, trading as Ginza Tanaka, operates a network of luxury retail stores in Japan that sell precious metals jewellery, bars and coins to the Japanese public.

In 2016, Tanaka Kikinzoku Kogyo announced a plan to fully acquire Metalor Technologies, one of Switzerland’s largest precious metals refineries.

Highlights

  • The Tanaka Kikinzoku Group, headquartered in Tokyo, is Japan’s largest gold and platinum group metals refiner. Refining is carried out by group company Tanaka Kikinzoku Kogyo K.K.

  • Tanaka’s gold bar production is centralised in its Shonan plant, 50 kms south-west of Tokyo. The Shonan facility has a gold refining capacity in excess of 500 tonnes per annum

  • Tanaka Kikinzoku Kogyo is a full member of the London Bullion Market Association and the London Platinum and Palladium Market and sits on the 5 member good delivery panels of both organisations

  • Tanaka’s gold bars, with the distinctive ‘TANAKA TOKYO MELTERS’ circular logo, include the wholesale 400 oz bar, and a range of smaller weight cast bars (1 kg down to 100 grams) and minted bars (50 grams down to 1 gram)

  • Tanaka Kikinzoku Kogyo is the sole distributor to the Japanese market of the Austrian Mint’s Vienna Philharmonic bullion coins and the Royal Canadian Mint’s Maple Leaf bullion coins

 Organisational Structure

There are four main companies within the group Tanaka Kikinzoku Group:

  • Tanaka Kikinzoku Kogyo K.K. (which includes the refineries)
  • Tanaka Denshi Kogyo K.K.
  • Electroplating Engineers of Japan Ltd
  • Tanaka Kikinzoku Jewelry K.K (precious metals retailing)

In Japan, ‘K.K.’ refers to “Kabushiki Kaisha” which means Joint Stock Company.

Tanaka Kikinzoku Kogyo, headquartered in Tokyo, procures, refines and recycles precious metals, mainly gold, platinum and silver, and produces and sells industrial precious metals products and investment precious metals bars. Tanaka Kikinzoku Kogyo has approximately 2,200 employees.

Tanaka Denshi Kogyo, headquartered in Saga, is the world’s largest producer of bonding wire, which is used in integrated circuits and semiconductors. Tanaka Denshi Kogyo also has offices in Singapore, Malaysia, China and Taiwan.

Tanaka’s company “Electroplating Engineers of Japan Ltd”, headquartered in Kanagawa, develops and produces precious metal compounds used as plating chemicals. The company also manufactures plating equipment.

The group’s Tanaka Kikinzoku Jewelry company imports and retails gold and platinum jewelry in Japan and sells and buys back gold and platinum bars and coins in the Japanese retail market. Tanaka Kikinzoku Jewelry operates 11 high-end retail outlets in 8 Japanese cities under the trading name ‘Ginza Tanaka”[2], a trade name it has used since 2002.

History of Tanaka

Tanaka was established in 1885, initially as a money exchange company[3]. As it moved into precious metals, the company initially grew in scale as a specialist in the production of platinum applications and products. In 1943, the company changed name to Tanaka Kikinzoku Kogyo. In 1961, Tanaka Kikinzoku Kogyo and Mitsui Mining and Smelting established Tanaka Denshi Kogyo as a joint venture to produce boding wire for the then emerging semiconductor industry. In 1973, the Japanese gold market began to be liberalised[4] with the Japanese government lifting its import ban on gold as a way to encourage private gold trading. That same year, Tanaka began publishing a retail gold price and entered the retail gold market. In 1978, Tanaka became a good delivery refiner of the London Bullion Market Association (LBMA).

In 1980, Tanaka launched Japan’s first Gold Accumulation Plan (GAP). A GAP is a regular saving scheme for precious metals. The same year, Tanaka became a good delivery refiner for platinum accepted on the London and Zürich markets. In 1983, Tanaka, Sumitomo and Mitsubishi launched a ‘Loco Tokyo’ over-the-counter gold market in conjunction with the Hong Kong branch of London merchant bank N.M. Rothschild and acted as market makers quoting gold in lots of 50 kilobars.

Tanaka Kikinzoku Jewelry (Ginza Tanaka) traces its origins back to 1892, when it was established as a precious metals accessory retailer in Tokyo[5].

Tanaka Kikinzoku Kogyo – Tanaka Refining

Tanaka Kikinzoku Kogyo[6] operates 11 plants and 7 sales offices in various locations around Japan, and also has a number of representative offices around the world, most of which are in Asia, but also in Frankfurt, Germany, and Chicago USA. Most recently, the company opened refining operations in Hangzhou, China. Tanaka’s Frankfurt company services the European market and is called Tanaka Kikinzoku International (Europe)[7].

In Japan, Tanaka’s precious metals refining is conducted at the group’s Sodegaura, Ichikawa and Shonan plants, with refining solely undertaken in the Shonan facility since 1976, and gold bar production solely taking place at the Shonan plant since 2007. The Shonan plant has an annual gold refining capacity of over 500 tonnes. Shonan is an area approximately 50 kms south-west of Tokyo.

Tanaka Kikinzoku Kogyo also trades gold, silver and platinum group metals on a proprietary basis, and offers wholesale customers physical metal trading services[8] such as leasing, swaps and financing[9].

In July 2016, Tanaka Kikinzoku Kogyo announced that it planned to fully acquire Metalor Technologies[10] in an agreed transaction[11]. Metalor Technologies is a Swiss headquartered precious metals industrial and refinery group. Tanaka’s rationale for this acquisition is to expand into precious metals refining and recovery in Europe, the US and non-Japan Asia where Metalor has a strong presence but Tanaka does not, and also to strengthen operations in some of Tanaka’s industrial precious metals manufacturing activities sectors such as advanced coatings and electrical contacts.

Tanaka Kikinzoku Kogyo, the precious metals refining company, is a full member of the London  Bullion Market Association (LBMA)[12], and has been a LBMA good delivery refiner since 1978. It has also been, since 2003, one of five refineries worldwide that are members of the LBMA’s prestigious good delivery referee panel. These five panel members maintain the LBMA’s worldwide Good Delivery System. The panel members proactively monitor LBMA member refiners, assess new refining applicants, and assay metal samples from member refineries[13].

Tanaka Kikinzoku Kogyo is also a full member of the London Platinum and Palladium Market (LPPM)[14], and has been a good delivery refiner of platinum for the London and Zurich markets since 1980. Since 2009, Tanaka Kikinzoku Kogyo has also been a good delivery referee of the LPPM’s platinum and palladium good delivery list.[15]. Given the acquisition of Metalor by Tanaka Kikinzoku Kogyo, this will probably lead to a change in the composition of the good delivery referee panels of both the LBMA and LPPM since both Metalor and Tanaka are on both panels.

In addition to the LBMA and LPPM, all of the world’s major gold spot and gold futures exchanges recognise Tanaka’s wholesale precious metals bars as good delivery. Tanaka Kikinzoku Kogyo’s gold, silver and platinum bars are accredited by the Tokyo Commodity Exchange (TOCOM) as acceptable delivery for the Exchange’s precious metals contracts[16][17]. The COMEX in New York has accredited Tanaka’s gold, platinum and palladium bars as acceptable for delivery for its future contracts[18]. Tanaka Kikinzoku Kogyo has also been accredited to the Dubai Good Delivery gold list, run by the DMCC, since 2005[19]. Note that, as of yet, neither Tanaka Kikinzoku Kogyo, nor any of its associated companies are members of China’s Shanghai Gold Exchange[20].

Tanaka Kikinzoku Kogyo is a full member of Japan Gold Metal Association[Japan Gold Metal Association fn. http://www.jgma.or.jp/agency/regular], which is Japan’s main precious metals industry representative body.

Tanaka’s Investment Bullion Products

In addition to the 400 oz Good Delivery gold bars produced by Tanaka, the Tanaka Kikinzoku Kogyo refinery also manufactures cast gold bars in 1 kg, 500 gram, 300 gram, 200 gram, and 100 gram weights, as well as minted gold bars in 50 gram, 20 gram, 10 gram, 5 gram, and 1 gram weights[21].

Tanaka Kikinzoku Kogyo is also the sole Japanese distributor of a number of the world’s most popular bullion coins, namely the Austrian Mint’s Vienna Philharmonic bullion coins and the Royal Canadian Mint’s Maple Leaf bullion coins. Tanaka Kikinzoku Kogyo is also one of the US Mint’s distributors in Japan for the platinum Eagle coin. Retail prices for 1 kg gold and platinum bars, 30 kg silver bars, and Philharmonic and Maple Leaf coins are quoted in English on the Tanaka Kikinzoku Kogyo website[22].

The Ginza Tanaka (Tanaka Kikinzoku Jewelry) retail stores in Japan carry Tanaka precious metal bars and the bullion coins of the above international mints[23]. Additionally, Tanaka gold bars are sold in jewellery stores, department stores and a number of banks throughout Japan.

Finally, Tanaka was the first group, in 1980, to introduce the ‘Gold Accumulation Plan’ (GAP) to the Japanese market. GAPs are a regular savings plan that allows retail investors to ‘dollar cost average’ into gold, and are very popular in Japan. In addition to the GAP, Tanaka also offers retail investors the option of investing regularly in platinum and silver via a ‘Platinum Accumulation Plan’ (PAP), and a ‘Silver Accumulation Plan’ (SAP), respectively. Tanaka’s PAP was launched in 1984 and its SAp was launched in 2013[24].

References and Links

1.^ Tanaka Kikinzoku Group http://www.tanaka.co.jp/english

2.^ Ginza Tanaka http://www.ginzatanaka.co.jp/en

3.^ Tanaka group history http://www.tanaka.co.jp/english/about/history.html

4.^ BullionStar Gold University, History 1970s – 1980s https://www.bullionstar.com/gold-university/japanese-gold-market#heading-2

5.^  Ginza Tanaka history http://www.ginzatanaka.co.jp/en/corporate/history.html

6.^ Tanaka Kikinzoku Kogyo https://www.tanaka.co.jp/english/about/group/tkk.html

7.^ Tanaka Kikinzoku International (Europe) http://www.tanaka-europe.eu

8.^ Tanaka Kikinzoku Kogyo physical precious metals services http://gold.tanaka.co.jp/english/activities/index.html

9.^  Tanaka Kikinzoku Kogyo precious metals products and trading services http://gold.tanaka.co.jp/english/products/index.html

10.^ Metalor Technologies http://www.metalor.com

11.^  Tanaka Kikinzoku Kogyo K.K. Acquires the Shares of Metalor Technologies International SA, Making it a Wholly Owned Subsidiary, 12 July 2016, Press release https://www.tanaka.co.jp/english/topics/fout.html?f=27

12.^ LBMA member search http://www.lbma.org.uk/membership

13.^ LBMA Good Delivery system http://www.lbma.org.uk/good-delivery-explained

14.^ London Platinum and Palladium Market (LPPM) http://www.lppm.com/members-list

15.^ LPPM good delivery referees http://www.lppm.com/files/annex-b-referees-.pdf

16.^ TOCOM deliverable brands of precious metals  – gold, silver and platinum http://www.tocom.or.jp/guide/brand/index.html

17.^ TOCOM Precious Metals Delivery Rules, February 2015http://www.tocom.or.jp/kitei/documents/PreciousMetalsDeliveryDetailedRules201502.pdf

18.^ COMEX gold bar brands acceptable for delivery  http://www.cmegroup.com/rulebook/files/service-providers.xls

19.^ DMCC, Dubai Good Delivery List gold https://www.dmcc.ae/For-website-02062016/DGD-Gold-Members-02062016.pdf?v=1

20.^ Shanghai Gold Exchange http://www.en.sge.com.cn/membership/member-list

21.^  Tanaka Kikinzoku Kogyo, Refiner Supplement, Grendon International Research 2014 http://www.goldbarsworldwide.com/PDF/RB_8_TanakaGoldBars.pdf

22.^ Tanaka retail precious metal price quotations, bars and coins http://gold.tanaka.co.jp/commodity/souba/english/index.php

23.^  Ginza Tanaka, jewellery stores http://www.ginzatanaka.co.jp/en/shop

24.^ View from Japanese Gold Market, LBMA Singapore Market Forum, June 2014, Presentation by Tanaka Kikinzoku Kogyo http://www.lbma.org.uk/assets/events/Singapore%20F/LBMABMF2014_S2_04Harada_en.pdf