Texas lawmakers created a new storage option for miners when they signed off on building America’s first state-backed gold depository in 2015.
The Texas Bullion Depository, currently under construction and with the capacity to house physical gold valued in excess of $100 billion will be the most secure facility outside of Fort Knox, will have the full protection of the state of Texas, and is insured by Lloyds of London.
Texas will have a lot of gold to protect — Governor Greg Abbott said when the project was announced last year that it would allow Texas to “repatriate” its gold from New York. The University of Texas/Texas A&M Investment Management Company holds $1 billion worth of gold bullion at the HSBC Bank in New York City, the Texas Tribune reported.
“This goes back to the precious metals storage industry here in the US. Most of the depositories are in the east coast. I say why don’t we have more depositories in Texas? So, the legislature ultimately decided this was something that they wanted to do,” Texas Comptroller Glenn Hegar told MINING.com.
“This is an opportunity for people to store precious metals in a variety of different options, another tool for those in the mining industry. This would also provide that additional oversight, that additional security, accountability, whether it is a short term or long term storage,” Hegar said.
Hegar’s office selected Lone Star Tangible Assets, a firm that specializes in moving and storing precious metals, to construct and operate the depository with state oversight.
Sean Forbes, chairman at Lone Star, is also managing director at the Texas Bullion Depository. Forbes said the new depository will provide benefits for the mining industry in terms of security, cost and mobility — the cost of transportation via Brinks armored trucks is included in the service. Related: De Beers To Expand World’s Most Profitable Diamond Mine
“We have a sliding scale charge rate that is more than competitive with any other bank depository out there,” Forbes said.
According to Forbes, the depository is a solution for short- or long-term storage for mining companies that need a secure location to house treasury gold and other metals while holding for price changes or while waiting for the right buyer at the right price.
“Miners will get the whole treasury bars of gold, if the price of gold is going up they could do better, often that’s a massive expense that they put into polymetallic rock than getting it into the treasury box so [it’s for] folks that don’t want an on-site risk or want a better than cost neutral alternative. You will get it insured, we will get it over here,” Forbes added. Then [there is] is obviously the security layer around the triple audit, no one else can claim to have that.”