BoN to refine Navachab gold abroad, considers London storage

The Bank of Namibia (BoN) is yet to decide on where it will be storing the gold it plans to buy, with the Bank of England in London being considered.

The central bank has signed an agreement with Navachab Gold Mine to buy its gold for the country’s reserves.

Navachab, however, does not produce refined gold.

This means the central bank will buy the gold and send it outside the country to be refined.

BoN spokesperson Naufiku Hamunime yesterday said the bank is still conducting an evaluation of storage space options.

“The bank is in the process of conducting a detailed evaluation of the available storage and custody options, and a final decision will be made based on a cost-benefit analysis,” he said.

Additionally, the central bank would need to refine the gold before storage, since Navachab produces gold doré bars, which are not refined to delivery standards.

To qualify as reserve, gold has to be at least 99.5% pure.

If Namibia’s gold is not refined to this standard, other central banks or international organisations would not recognise it as reserves.

London Good Delivery bars are the international gold and silver standard for wholesale bullion trading.

Established by the London Bullion Market Association (LBMA), these specifications ensure that bars are uniform, high-purity, and tradable without the need for constant retesting.

“The gold purchased by the bank will be refined at a London Bullion Market Association-accredited refinery to meet the international standards required for monetary gold classification. As such, the bank will only take delivery of London Good Delivery bars,” Hamunime said.

The bank will not be buying all the gold for reserve purposes at once, but rather through a series of planned transactions over several months until the desired gold allocations are met.

All transactions will be conducted in Namibia dollar, and the BoN would not be given any special price.

“This approach allows the bank to increase its foreign exchange reserves without directly drawing down the foreign currency reserves. The bank will purchase gold at prevailing market prices, in line with international best practices,” Hamunime said.

According to the BoN, the goal is incorporated into the foreign reserve portfolio at a single-digit allocation (below 10% of the current level of reserves).

The bank has, however, been tight-lipped about the specifics, refusing to disclose a rigid percentage or a quarterly cap on how much gold it would buy, citing a “bilateral agreement” with the privately-owned QKR Navachab Mine.

Last year, former BoN governor Johannes !Gawaxab said the target is to hold 3% of its net foreign exchange reserves in gold.

Current governor Ebson Uanguta says the agreement with Navachab represents an important step in advancing the bank’s reserve diversification strategy.

“By partnering with domestic producers, we are not only strengthening our reserves, but also supporting local value creation and economic development,” he says.

Gold prices peaked near US$5 595 (N$94 555.50) per ounce in January 2026.

As of early April 2026, prices have experienced a pullback of over US$1 000 (N$16 900 ) to trade at around US$4 500 (N$76 050) to US$4 600 (N$77 740) per ounce, representing an almost 8% decline in the last 30 days.

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