Stroll down Grey's Avenue, central Auckland, and just before you get to the council building, there's a grey office block on your right.
They won't say just how much gold is inside there, but the two bank vaults at the unprepossessing New Zealand Mint are insured for $100m.
The global recession and the local collapse of finance companies has seen business double in the past three years, says Mint Master Karl Lindridge. Mum-and-dad investors buy a handful of gold coins, whereas overseas millionaires, mainly in the US, buy gold bars and store them here because they perceive New Zealand as a safe haven in an uncertain world.
Want a real gold bar? NZ Mint stocks 1kg bars from Swiss firm PAMP and retail them, at today's prices, for $72,000 (a one kilogram silver bar is worth a mere $1500). But the big seller is the Gold Kiwi coin that looks similar to your standard $2 piece but is worth $2140.
And to make those, the only place in New Zealand that can actually mint coins - regular currency is made in Canada and Australia - uses traditional methods.
The 99.99 per cent pure gold is melted, using a blowtorch, at 1063 degrees Celsius in small crucible, poured into a heated skillet, or mould, to set, and is then "quenched" in cold water.
That produces a bar, which is rolled - almost like pastry - into a precise 2.5mm width, and then "annealed", or softened, to make it malleable before being stamped, at a pressure of 120 tonnes, with a Kiwi logo and New Zealand map.
Strangely, the finished product is worth more than its weight in gold: the Mint can add a 4 per cent mark-up because of the authenticity value and the portability of the one-ounce coins. "You get 32 coins in a kilo, so if you've got 32 sitting under the bed and the washing machine breaks down, you can take one of these out and sell it - with a whole bar, you can't just chop a bit off," explains Lindridge.
The bullion business accounts for 80 per cent of Mint's trade, the rest is in commemorative products sold chiefly into the old Soviet Union countries, the US, and increasingly, China, with sets linked to everything from Ed Hillary to the 50th anniversary of the Sputnik space rocket to gunmaker Mikhail Kalashnikov.
The Mint also has the rights to make legal tender for Niue, Fiji and the Pitcairn Islands.
Lindridge says anyone with a big investment portfolio should consider placing about 5 per cent in gold "as a hedge"; he admits to owning a couple of coins, but has a big mortgage and any spare cash goes on that.
Anyone considering a raid on the Mint should consider the fingerprint recognition and steel doors. Incidental loss is avoided by special sink traps and vacuum cleaners to catch the offcuts, a worthy precaution considering that when Lindridge owned a jewellery factory three decades ago, he remembers ripping up and burning the carpets when they moved and recovering $10,000 worth of gold.
Business should expand another 25 per cent this year, he reckons. Inside the upstairs day vault, where 2000 safety deposit boxes mainly contain gold bars and coins, the Mint's Head of Bullion, Hayden Syers, says it isn't unusual for people to walk in and buy a bar. "Anyone can surprise you; you can't be judgmental. A client can have 150 reasons why [they are buying gold]: there is no typical customer."
- © Fairfax NZ News
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