DA Shadow Finance Minister David Maynier
JOHANNESBURG (miningweekly.com) – The Bank of England and other official sector institutions at offshore bullion centres are holding a large percentage of South Africa’s gold.
At last count, these holdings totalled four-million ounces, worth nearly $5-billion.
Revealing this in a written reply to Opposition Shadow Finance Minister David Maynier, Finance Minister Pravin Gordhan disclosed that only “a smaller amount” of South Africa’s gold is held locally.
The reason for storing most of this country's gold in offshore bullion centres was that it provided operational efficiency when gold transactions were conducted.
Gordhan revealed that as at the end of February, the value of South Africa’s official four-million-ounce reserve was $4.96-billion or R75-billion at March 9’s exchange rate of R15.17 to the dollar.
In addition to the South African Reserve Bank performing reconciliations on the gold held internationally and locally, senior reserve bank officials regularly conducted due diligence visits to inspect gold reserves held offshore, with the last such visit taking place in 2015.
Gordhan said these report backs were not made public as they contained confidential information.
Due diligence details were, however, made available to the executive of the South African Reserve Bank.
He declined to give Maynier details on the cost of storage, transport and transacting except to say that the storage costs were miniscule when compared with the value of the gold being stored.
He put no scale on transaction and transportation costs.