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$1 billion of gold has been shipped from New York to South Africa this year

May 13, 2013
Obsession
The Sea
May 13, 2013

This item has been updated.

Examining US trade data, we were surprised to see that South Africa’s $402 million trade surplus with the United States in January had turned into a $689 million deficit by March. Why?

south-africa-us-trade-balance_chart-1

It turns out the $1.1 billion swing is entirely due to unusual shipments of gold from the US to South Africa in February and March. So far this year, 20,013 kg of unwrought gold, worth $982 million, has left John F. Kennedy International Airport (JFK), in New York, for somewhere in South Africa, according to the US Census Bureau’s foreign trade division. (Unwrought gold includes bars created from scrap as well as cast bars, but not bullion, jewelry, powder, or currency.)

The shipments from JFK were the only unwrought gold to leave the US for South Africa in 2013; another large shipment occurred in September 2012.

all-commodities-all-less-gold_chart-1

South Africa has an enormous mining industry, and a lot of the material leaves the country–$1.72 billion worth of precious stones and metals were exported in March according to the South African Revenue Service. Although the country’s gold output has been falling steadily for decades, it remains one of the world’s largest producers and is still primarily an exporter. In fact ordinary South Africans are legally prohibited from importing or owning unwrought gold. (Refiners, dealers, and jewelers are granted licenses.)

However, the strikes that rocked South Africa’s mining industry last year briefly caused gold output to fall sharply, around the same time as last autumn’s big gold shipment from JFK. Overall 2012 production declined by a relatively modest 6% (pdf) over the year before, according to a preliminary figure from the US Geological Survey; but those first estimates have sometimes proven wide of the mark. (In 2009 the USGS estimated South Africa’s 2008 production to be 250 tons; it subsequently revised the figure to 213 tons.) So it could be that the strikes dealt a more severe blow to the country’s gold industry than the data show.

Still, even if gold output did fall precipitously, it’s not clear why South Africa would need to start importing it. One possible destination for the gold is the South African Mint, which produces legal-to-own gold coins called Krugerrands; the gold used in them is first refined by the Rand refinery. Calls to the South African embassy in Washington, DC were not returned.

(Update May 17: The Rand refinery released a statement claiming responsibility for the gold imports.)

The data do not imply that the gold originated from the New York area, only that JFK was the gold’s final point of transit before it made its way to South Africa. For instance, a US domestic cargo carrier could have delivered the gold to an international carrier in New York, who in turn hauled it across the Atlantic. The amount of unwrought gold exported through JFK has more than doubled in recent years.

In 2012, 335,204 kg was transported from the airport to other countries, up from 148,894 kg in 2009.

Unwrought-gold-shipped-through-JFK_chart

The shipments to South Africa amount to 16% of all unwrought gold exported through JFK in the first three months of 2013 and 9% of all unwrought gold exported from the US this year.

JFK-International-Airport-NY-Port-ALL-JFK-International-Airport-NY-Port-South-Africa_chart

All the gold was not necessarily shipped at the same time. However, if it was, it would take up no more space than a washing machine. The Boeing 747-200, a cargo model of the distinctive jumbo jet, is capable of transporting a shipment six times heavier than the 20,013 kg exported so far this year. That’s all we know.

If you have a better theory about (or the full story behind) these gold shipments, feel free to get in touch.

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