India sees half of its gold refineries close after COVID-19 – report

India gold refinery landscape is drastically changing after the global coronavirus outbreak with up to half of the country’s gold refineries shutting down, according to a local media report.

Ten out of twenty Indian gold refiners have closed down due to no more dore gold coming in from regular suppliers — Switzerland, Ghana and Peru, The Economic Times reported Monday.

Dore gold bars, which are rough and impure gold, are produced by gold miners and are sent to refineries to be turned into gold of different forms and purity. Each dore gold bar contains on average between 50-75% of pure gold.

The ten refineries that have closed down all dealt with dore gold, the media report noted.

But the story is not just about the lack of supply but also a lack of demand for gold in India — the second top gold consumer in the world.

“Since the lockdown, the refineries which were only refining imported dore gold have closed down as there is no supply of dore gold. It is unlikely that the situation will improve any time soon. The demand for gold in India has plummeted and therefore, the stock which is still there, is enough to meet the domestic demand,” Association of Gold Refineries and Mints secretary James Jose told The Economic Times.

In other news, the Multi Commodity Exchange of India (MCX) is looking to begin accepting bullion bars refined by Indian refineries for delivery through its contracts.

All refineries applying will be subject to a screening process, including audits that will look at supply-chain, responsible sourcing, refining and assaying ability, according to MCX.

At the moment, MCX only accepts serially numbered gold and silver bars from the London Bullion Market Association-approved refiners as well as Emirates Gold bars.

Courtesy: Kitco News