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Seven questions to ask your refiner

In With The New

As we’re now in to a new financial year we’ve all got to think about planning for the year ahead.

The present is an excellent opportunity to take stock of the prior 12 months – wins and losses; great ideas and bad ones. I was taught to do this by an old boss of mine and I believe it is one of the best bits of business advice I’ve ever received. Time out to reflect and plan really helps get things in perspective.

First up: out with the old. There is no point keeping old stock that just doesn’t sell. In the jewellery trade, you have the opportunity to recoup some of your losses through the refining process. There are plenty of businesses out there looking to secure your business, but before handing over your refining make sure that you’re armed with all the facts. There are lots of hidden charges in refining – so it is essential to understand some key points before you start.

Refining your jewellery

Refining your jewellery

Question 1:  Someone is offering to do my refining free of charge with no assay and no refining fee. How is this possible? Businesses often use these tactics to get your refining, however if they are not charging you for it, chances are they are compensating with the metal provided and therefore you are getting less back.

Question 2:  Does the “refiner” do its refining in-house or is it just subcontracted out?: There are not actually that many true precious metal refiners in Australia who can guarantee to refine metal to a 99.99 standard on a consistent basis. So ensure to ask to view your refiner’s refining plant to see for yourself whether they are really refining your metal or if they are only sending it to a third party. If they’re not doing the refining process in-house, all you’re doing is paying a middleman.

Question 3:  Does the “refiner” own its own analytical laboratory?: Ask the refiner if they own their own laboratory and if they own their own XRF, AAS, ICP, Titration and Fire Assay equipment. Not many people do and the reason for this is that they are not only hugely expensive but they also require a team of tertiary qualified experts to run them. Also ask if they are externally certified, eg: NATA, ISO, ILAC, IEC, SA or LBMA. If they don’t have the equipment and external certification, you don’t have an independent reality check on your assays, which means you don’t have an independent party giving you the peace of mind that what the refiner is stating is the precious metal content of your scrap is actually what is there.

Question 4:  What is the assay fee?: The assay is the process whereby a refiner qualitatively assesses or quantitatively measures the amount of precious metal in your refining job. Our facilities test to parts per billion! Make sure your refiner tells you how much they charge for performing this test. Running the machines that do the tests costs money…

Question 5:  What is the refining fee per gram of incoming weight?: Ask what the refiner charges per gram of incoming weight to refine your metal. If someone is offering to do this for free, remember that when something sounds too good to be true, it usually is.

Question 6:  What is the minimum assaying and refining charge?: Refiners usually have a minimum refining and assay charge. So if your job is small, sometimes the charges will exceed the value of the fine metal output of your refining. Check what the minimum charges are before you go ahead.

Question 7:  What is the retention percentage?:  This is a figure that many “refiners” conveniently forget to tell you and is one of the most important questions to ask because it has the most potential to impact your return! A retention is a percentage of the fine metal output of a refining that the refiner “retains” – this covers losses during the process.  ALL legitimate international refineries charge a retention. If you’re not being told what the retention is, then the refiner is just taking the retention without your permission. Many “refiners” don’t tell you what their retention is because they’re just an intermediary – ie, they are sending your job out to a real refiner, being charged a retention themselves, and then adding an extra retention on top before it gets back to you.

So the next time you’ve got a refining job, ask the refining service provider to give you answers to each of the above questions. If you get these answers, you’ll have more in your pocket at the end of the day. In refining, like most things in life, the following adage holds true – you get what you pay for.