PRECIOUS METALS TSWANE: Shining PMT Celebrates Five Years of Success

Fine, precious metal is etched in the history of Gauteng. The reason the region is the powerhouse it is today is because of gold. Johannesburg, the City of Gold, sits on the edge of the largest gold deposit in the world. Pretoria is home to some of the richest silver deposits around. And South Africa is well-known for its history in other metals including copper and iron ore.

From these industries comes essential products for life, and items of opulence – jewellery and display pieces that are expensive and sought after around the world. Mining, and foreign earnings from South Africa’s mineral resources, accounted for 38% of export value in 2019. Historically powered by the country’s other extensive resource – coal – mining of precious metals has put the country on the world map.

Now, in a green energy transition, and a move towards battery and storage projects, new metals are at the forefront of a fresh push. In particular, platinum group metals (PGMs) – platinum, palladium, ruthenium, osmium, rhodium, iridium – in which South Africa holds more than 80% of known deposits, are being mined around Rustenburg to the delight of auto, aero, and jewellery makers.

Precious metals and their route from earth to end user are complex. Many work on the process to extract, process, manufacture, and retail, and the industry supports many jobs in South Africa and around the world.

One growing business is Precious Metals Tswane – a refinery and manufacturing business based in Centurion. Independent and focused on refining metals to their purest form, the company is an expert in gold and silver, and is expanding in PGMs. Also a manufacturer of jewellery and a dealer of gemstones, Precious Metals Tswane has a wide knowledge base around turning rough material pulled from the ground into a highly prized asset.

YOUNG REFINERY

This year, the company celebrates its fifth anniversary, and head of finance, Pieter Wiese, tells Enterprise Africa more about the company’s diverse journey.

“We get metals from carefully selected partner mines who extract from the ground and complete a certain level of processing. We then process further and sell as coins or bars to central banks or similar, or sell on to turn into jewellery or other products for specific demands,” he says.

Key products include refined gold and silver, separated PGMs, alloys, fine jewellery, diamonds, and associated services including goldsmithing and setting.  

“We work with small and medium-sized mines and we deal with a wide range of clients because we refine and manufacture,” says Wiese, adding that the company also buys from registered bulk scrap metal dealers.

“We are a young refinery, but we have four lines of business – receiving precious metals and refining; jewellery design and manufacturing (we manufacture to order, we don’t want to make things and hope people buy them); manufacture of alloys (around 15 types of alloy); and gemstone supply.”

In the exciting jewellery space, Precious Metals Tswane is riding a wave of new demand in the local market. An affluent young population is still attracted to gold, and, in 2019, 51% of gold demand was from the jewellery industry. Internationally, China, India, and the USA are the world’s top buyers of jewellery, and industry accounts for a significant portion of demand. But in the jewellery space in South Africa, new trends are combining traditional and modern design to bring a fresh style that is in-demand in Mzansi. A consistently strong bridal market, and a constant perception around gold being a ‘safe haven’ investment – a liquid asset – drives continued purchase of the metal. Precious Metals Tswane manufacturers a range of unbranded items which are offloaded on a wholesale basis to retailers for delivery to consumer.

“It’s all wholesale and we do have a few retail customers,” says Wiese. “In Gauteng, we have 160 clients and we manufacture a lot of product – but none of it is branded. We don’t take the risk of having products sitting in a showroom waiting to be purchased. We go higher volume, less margin. We do export but most of our business is in South Africa right now.”

Competing against imports is a challenge. The market lacks manufacturing skills and expertise, and training is expensive and lengthy. Importing products can be easier and quicker. But that has been upended in the past three years. Since the onset of the Covid-19 pandemic, importing goods from the East has become more expensive and more difficult with shipping and logistics in turmoil and pricing disrupted in a way not seen for years. Retailers desperate for product turned to local manufacturers to fill their shelves. Precious Metals Tswane has more than 30 people and is bolstering its jewellery offering with the addition of more gemstone business.

“We are expanding more in the gemstone side where we have a polished and rough diamonds operation,” highlights Wiese. “We mainly trade in polished diamonds but we are expanding into the alternatives with people’s free cashflow, as a result of interest rate hikes, making things more difficult and leaving less money in pockets. We are looking at lab-grown diamonds, moissanites and similar products. It’s not a small base but it’s not huge – our client is not the man on the street, it is the jewellers.”

The company boasts 3D CAD, CAM, casting, finishing, stone setting, and diamond sourcing to ensure products are surrounded by integrity.

PGM EXPANSION

Precious Metals Tswane’s key offering, and the biggest part of its multi-million rand turnover, is the refining process. Efficient, environmentally-conscious, competitively priced, technologically advanced, and highly accurate, the methodology used by the company employs a combination of pyro- and hydrometallurgical refining to result in a high level of purity. Here, while historically strong with gold and silver, the company expects to grow in PGMs as demand continues to surge.

Well-documented challenges in the country’s electricity supply have hampered the big platinum producers, leaving a shortage in supply against a backdrop of surging demand. Reports suggest that 2023 will see a 28% rise in demand – to 8.2 million ounces – and the price is already sitting above its five-year average.

“That is where we are expanding,” says Wiese. “Our main source of revenue is the refining of metals and the local market, unfortunately, is not large enough. We are thinking of expanding and we are looking regionally at markets in SADC. We have gone to various countries and looked at the market with due diligence processes. South Africa is known for its gold, but 80% of the world’s platinum group element resources are in South Africa. These are the metals that are in demand.”

According to the World Platinum Investment Council, the platinum deficit this year will be more than 980,000 ounces.

To ensure the highest quality products come through the refinery, and world-class jewellery ends up in stores, the local value chain is meticulously screened in a way that benefits both supplier, Precious Metals Tswane, and consumer. The company takes its role as a good corporate citizen seriously and has implemented strict corporate governance processes to ensure transparency and accountability, and it encourages the entire value chain to follow this example.

“We have strict KYC processes and we take our relationships very seriously,” says Wiese. “We were members of the Responsible Jewellery Council – a UK-based authority that ensures standards are met globally. We go to the mine to make sure all labour practice is up to date. We have to ensure our supply chain is fully compliant, and in that sense, we create situations to help our suppliers.

“We see our suppliers as our clients,” he adds. “We go out of our way to help them to grow their businesses. The better they do, the better we do. If we can help a mine to increase their production through technical advice, we do so. Our supply chain truly is our success. Any benefit for them, is a benefit for us.”

If the company can continue on the same strong path that has helped it through the past five years, while adding new products and services to the mix, then it will quickly begin to take solid steps towards its vision: ‘To continuously provide quality service and product delivery to our clients and in doing so, expand our business operations’.

Asked about key highlights within the business today, Wiese is clear: “We have been in business for five years, we are expanding into PGMs, and we have an exciting focus on gemstones.”

With each of these areas growing, built on a sound strategy, the future for South Africa’s valuable minerals and Precious Metals Tswane looks sparkly and bright.