Interesting reports emerging this week from the world’s largest gold-consuming nation: India.
Where it appears buyers are increasingly looking to a new part of the world to secure bullion supply.
That new supply source is South America. Where officials with MMTC, India’s largest public metals traders, said over the weekend that Indian gold buyers are increasingly venturing to buy their gold.
Local press in India quoted senior management from MMTC as saying that India’s gold buyers are specifically going after unrefined “dore” gold from countries like Ecuador, Peru, Bolivia, Guyana, Colombia, Honduras and Nicaragua. In order to benefit from better tax rates. Related: Was Iran’s Claim About Ramping Up Oil Production Just Hype?
That’s because unrefined gold like South America’s dore is subject to lower import taxes in India. With such shipments receiving only 8 percent duty, as opposed to 10 percent for refined gold.
By importing dore and then refining it in India, sellers get a significant break on taxes. Which it appears is prompting rising demand in several parts of South America.
News sources quoted Ecuador’s ambassador to India, Mentor Villagomez, as saying, “For the first time the Central Bank of Ecuador shows export of gold to India for 2015.” And Bolivia’s ambassador, Jorge Cardenas Robles, also noted that his country has begun exporting gold to Indian buyers. Related:Potentially Worth Trillions, But Is Aramco A ‘Good Deal’ For Investors?
Beyond those two nations, reports also suggested that dore imports to India from Peru have been rising, after beginning back in 2012. Showing that demand for South American gold seems to be growing across the board in this key market.
Interestingly, this trend also appears to be prompting interest from India’s mining companies in picking up South American gold projects.
Reports noted that three unnamed Indian investors “have decided to invest in gold mines in Peru.” And Bolivian officials said that a delegation of Indian gold miners is expected to visit the country soon.
All of which is great news for South America’s gold sector. Watch for investments from Indian mining firms in the local bullion sector here.
Here’s to going abroad
By Dave Forest
More Top Reads From Oilprice.com:
- Denmark Ramps Up Renewable Investment In Iran
- Statoil CEO: Expect Volatility Now, Price Spike Soon
- Rig Count: Capitulation?