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RJ Market Watch

Beyond ornaments and investment, gold can be a shiny affair in industry too



gold ornaments

It is estimated that global trade of gold compounds stands at about $5 billion, of which India’s share is less than one per cent. This discussion is of significance in the context of economic value-addition that just the market for gold compounds can create for the Indian economy. This is especially important at a time when discussions about the yellow metal in India largely revolve around jewellery and investment, even as the more technology-driven world is capitalising on gold’s potential in industrial and other usages — medical purposes, gold nanoparticles in environment management, and so on.

Gold’s properties as a corrosion-free, malleable and ductile conductor of electricity, and its characteristic of not reacting with other elements make it unique as a catalyst. Some of these properties flow from new characteristics that emerge when gold nanoparticles are free to engage with different media and contexts. It has been found that these nanoparticles can be used to transform air pollutants into harmless molecules. With regard to the environment, gold’s usage has widened to solar cells, water purification and as a coating to reflect infrared light, reducing the need for air coolers.

What is seemingly a new-age medical science discovery around the use of gold nanoparticles for targeted drug delivery, specifically in the field of Oncology, has been discussed in the ancient literature in China and India. In India, the most popular was the use of Swarna Bhasmam (gold ash), which currently has gold nanoparticles of size 28-35 nanometre and is administered orally with ghee, milk or honey. It has been administered for multiple ailments since ancient times. In addition, it is being used as a mobiliser of immunity and for connecting neural networks by administering to toddlers at prescribed intervals. As for the group promoting this ancient medicine, interestingly, it is a community-driven project with volunteers in Bengaluru and Mumbai going from house to house canvassing the benefits and even administering this to toddlers free of cost for immunity building and brain development.

At India Gold Policy Centre (IGPC), our view is that the use of gold and the discourse related to it in India are limited almost exclusively to jewellery and bullion. The use of gold in other areas as mentioned above could have a potential multi-billion-dollar opportunity. But this opportunity is hardly explored, despite extensive literature is available on the same — at least in Indian ayurvedic institutions. When we add the use of gold for environment conservation and other technological areas, the potential demand for gold expands further.

In what is estimated to be a $100 billion to $200 billion preventive healthcare market, the role of gold could be significant. Currently, there are just a handful of names with modern sophisticated laboratories that have made a mark in the international nano gold market. On the other hand the conventional way of making Swarna Bhasmam still continues, initiative to modernise these labs and create standards that can be globally acceptable will make way for a large export market.

One of the most common processes is to first convert 24-karat gold bars into flakes. This would then be ground with lemon juice, and mercurial compound added to it. This would then be heated in the absence of air at 400-500 degrees Celsius for 5 hours to get the ash. In the modern method, which is used for large-scale commercial consumption, they don’t use heavy metals like Mercury. The procedure of preparation, as detailed in the International Journal of Innovative Pharmaceutical Sciences and Research, is as follows: “Gold leaves are tested for purity and triturated to form small particles (1 part). To this, extracts of tila (0.5 part), mango leaves aqueous extract (1 part), fresh lime juice (2 parts), bay leaves (aqueous extract) (0.5 parts), papaya fruit extract (freshly made) (3 parts) were allowed to mix on a magnetic stirrer for 3 to 4 hours. Then the mixture is sonicated for 24 hours at room temperature and filtered. The final product is a purplish red coloured solution. This is the final form of Swarna Bhasma (SB). The product SB is in the form of a liquid and active ingredient is Swarna with reduced particle size in the nanometre range. The product is subjected to a physiochemical analysis and qualitative assessment is executed by advanced technique for metal testing, namely atomic absorption spectroscopy. These analyses are required for standardisation and global acceptance of Nano Swarna Bhasma.”

Moving beyond medicinal use and environmental protection, there is a use for gold in space engineering, contacts, circuit boards, electroplating in phones and various high-end electronic gadgets. You will be surprised to know that Apple Inc in 2015 recovered a tonne of gold from discarded iPhones that customers put to scrap or exchanged in Apple’s take-back initiatives. According to Apple Inc, 1.1 kg of gold can be recovered from every 100,000 iPhone devices. For the knowledge of readers, the iPhone uses gold in the main logic board, rear camera, dock flex, front camera and face ID and wireless-charging coil. That said, the usage of gold is not limited to iPhones; various high-end smartphone brands use the metal, in only marginally different ways.

For a country looking at opportunities to increase manufacturing and exports, this is just another important opportunity that India cannot afford to miss. However, the present duty structure in the country seems to disincentivise indigenous production and makes it less economical for firms to consider manufacture and supply to users in the domestic space. For instance, gold bonding wires and ribbons used in the electricals and electronics industry are imported after paying duty at the rate of 14.3 per cent. This means one would rather import these wires than manufacture domestically, as customs duty on fine gold itself is 12.5 per cent.

Though some large suppliers in advanced economies have acquired process patents with their continuous innovation in the production process, increasing barriers for the entry of new players, the extent of opportunities that lie here cannot be undermined. The doors aren’t fully shut; we at India Gold Policy Centre see opportunities that could be explored for adding significant value to the economy.

Courtesy: Business Standard

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