Johnson Matthey to close gold refinery
By GCRU Gold News on Friday, September 3 2004, 00:00 - Permalink
The UK's historical pre-eminence in the gold market was diminished yesterday when Johnson Matthey said it would close the country's only significant gold bullion refinery.
Johnson Matthey, the precious metals and chemicals group, has itself been in the gold business for almost 200 years. However, it has decided to close its gold and silver refinery at Royston, Hertfordshire, next year to curb mounting losses.
Five months ago, NM Rothschild, the investment bank, quit the gold trading business after 200 years. It had hosted the twice-daily fixing of the gold price in its London office since 1919.
Johnson Matthey's Royston plant is believed by some analysts to be the world's second biggest gold refinery with an estimated annual capacity of between 200 tonnes and 250 tonnes of gold bars. While gold bars are highly desirable, making them is often a lossmaking business for producers suffering from severe industry over-capacity.
Analysts estimate global gold refinery capacity of almost four times primary world gold annual production of about 3,500 tonnes. Even with gold recycling activities added to primary gold refining activities, global refinery utilisation is still about 50 per cent.