South Africa's Rand Refinery, is considering setting up a refining plant in China within two to three years.
JOHANNESBURG(BillionStreet): After Singapore, world's largest gold refiner,Rand Refinery is targeting China, world's top gold producer, reports reuters.
South Africa's Rand Refinery, is considering setting up a refining plant in China within two to three years, joining hands with a local partner on its first such plant abroad, reuters report said quoting a senior executive of Rand.
Rand is targeting Asia, home to the world's top two gold consumers, China and India, as a key region for future development. It expects to complete a sampling and assaying facility in Singapore by the end of the year.
“During the past year, we have identified one or two possible opportunities to partner for a potential initial refinery footprint in China,” Peter Bouwer, chief strategy officer at Rand, told Reuters on the sidelines of a conference.
He declined to give details, saying the plan was at a very early stage. The lack of high-purity gold refining capacity in China poses an opportunity for Rand, Bouwer said
. “China already has huge refining capacity, both in a handful of large-scale refiners listed with the LBMA, and a huge number of small- or micro-scale refiners,” he added.
“The challenge facing especially the smaller refineries is the technology and experience to produce high-purity gold, e.g. 999.9 percent.” High-purity gold is keenly sought for use in jewellery, which accounted for two-thirds of China's gold demand in the first nine months of this year.
China is the world's largest gold producer, with output of a record 360.957 tonnes in 2011, compared to 198 tonnes by South Africa, the world's fifth largest producer of the precious metal, data from metals consultancy Thomson Reuters GFMS showed.
Rand's China refinery would rely on locally sourced scrap and dore, an unrefined alloy of gold with variable quantities of silver and smaller amounts of base metals, Bouwer said.
Rand, the biggest supplier of bullion to China, is likely to ship about 100 tonnes of gold kilo bars into the country this year, similar to last year, the firm's chief executive told Reuters last month.
China's consumer gold demand stood at 576.9 tonnes in the first three quarters of the year, down slightly from 580.3 tonnes in the corresponding 2011 period, the World Gold Council said.
Bouwer expected China's gold demand to improve as the country's economy recovers. “I really have confidence in China's ability to recover,” he said