India’s largest gold refinery will come up in Bengaluru’s Whitefield before the year-end.
Being set up by city-based Rajesh Exports, one of the world’s largest gold refiners, at a cost of Rs 350 crore, the facility will have a capacity to process 600 tonnes per annum, which is about 67% of the country’s total gold consumption per year.
Rajesh Exports told DH that the move will help India, the globe’s largest consumer of gold, to save about 2% per annum on its gold import bill.
After crude oil, gold is the second highest imported commodity in India, with the huge imports of the yellow metal putting an undue pressure on the country’s current account. The domestic consumption of gold is close to 900 tonnes per year, out of which 90% is imported. As much as 50% of the imported gold comes in the form of pure gold.
“We will be importing gold directly from the mines round the world and refine it in India. This will save the refining and branding charges, which in the case of foreign countries, especially Europe and America, are very high,” Rajesh Mehta, Chairman Rajesh exports said.
Boosted by the acquisition of Valcambi, the world’s largest Swiss gold refinery, in 2015, Rajesh Exports’ current refining capacity in India and abroad stands at around 2,400 tonnes. Mehta, however, did not say how much of the refined gold will be exported from the Whitefield facility.
The company is also shifting its base from Uttarakhand to Bengaluru with an eye on the Middle East, which is emerging as a significant market for gold and diamond jewellery.
The Uttarakhand refining unit had a capacity of 72 to 80 tonnes per annum, he said, adding that it has been substantially reduced of late and will eventually be closed down. Mehta said the cost of operating in the hilly state had risen after GST subsumed many of the levies.
Since gold mining in India is very limited, the domestic gold demand is mostly taken care of by imports. However, with an import duty as high as 10% and a GST of 3%, gold prices in India are much higher than in other parts of the world.