NEW DELHI, MARCH 6: South African gold refiner, Rand Refinery, said on Monday that it was examining ways to boost its business prospects in India, the world's largest gold consumer. Managing director Paul Streng said that he was "open to the idea" of setting up a subsidiary company or a joint venture."We certainly have not closed our minds. To the extent that it increases the opportunity for (gold) offtake and they are viable, we could consider the opportunities before us," Streng said.
Streng said the firm had started discussions with some Indian firms and was planning to talk to government officials to determine the kind of partnership that could be finalised.
"We have spoken to MMTC. We will speak to State Trading Corporation (STC) and some banks to see what can be done," Streng said. MMTC Ltd is the country's state-run metals firm and STC is the state-run commodities trading firm.
Business prospects good
Gold demand in India increased by 3 per cent in 1999 to 838.8 tonnes, according to the World Gold Council (WGC). The country imports almost all of its gold requirements. The gold demand in the country is traditionally high during the wedding season and mainly from the rural sector as it is seen as a protection against inflation.
The South African company launched a 58.33 gram gold bar in the country on Monday. "India will continue to grow as a market for gold," Streng said. "It will not be unreasonable to say that, provided there are no price shocks, those (1999) kinds of demand can presumably be maintained in 2000." Streng said the demand for the firm's gold in the country was growing. The firm's exports grew to 246 tonnes in 1999 from 142 tonnes in 1998. It exported a mere 6 tonnes of gold in 1997. "India in 1999 accounted for almost 50 per cent of our exports and this year also we expect the exports to do better," he said.
Global prices stabilise
Bullion analysts say with international prices stabilising, gold imports into India were expected to grow. "Gold in the Indian market is increasingly facing competition from other forms of investments," Streng said. "But despite that we have an optimistic view." Streng said international prices in 2000 were likely to be higher than 1999 because of the rising demands."I think world prices will be better in 2000 from the producers' point of view," he said. "Indian prices are influenced by the global prices." Streng also said gold refiners would like to see a more liberalised Indian gold market, taking into account India's growing appetite for the precious metal.
Copyright © 2000 Indian Express Newspapers (Bombay) Ltd.