Gold merchants report sub-Saharan African refiners importing gold.
Gold merchants report sub-Saharan African refiners importing gold.
It has been less than ten days since the United States government released an extraordinary business recommendation warning other countries about the sourcing of gold from sub-Saharan Africa. This advisory warned that the earnings from the sale of this gold might eventually be channelled to support rogue and non-state armed actors like as the Wagner group. Now, a group of gold jewellers and dealers have informed the Centre that a few refineries in the nation are importing semi-pure gold – which is referred to as dore in the business – from African countries such as Guinea and Tanzania duty-free. Dore is the industry term for this type of gold.
It was stated in the Economic Times that a few gold refineries in India are taking advantage of trade deals that India has made with certain less developed nations in order to import dore gold without having to pay any customs duty.
The term “dore gold” refers to bars that include gold in addition to other precious metals, most frequently silver. Additionally, gold scrap might be used to produce it. Dore gold typically ranges from 50–75 percentage points of pure gold. Before it can be put to any use, the gold in question needs to be refined.
“The Indian Bullion & Jewellers Association (IBJA) brought this matter to the attention of the administration approximately one week ago. In contrast to the typical gold dore, which is subject to a customs charge of 14.35%, the importation of this particular type of gold dore is now exempt from any duty whatsoever. According to Surendra Mehta, the national secretary of the IBJA, “a few refineries have already imported around 300 kilogrammes, and we understand that a large local refiner is planning to import a large consignment of goods,”
“While most of the refineries in India are making efforts to follow OECD guidelines on responsible sourcing, such questionable imports from poor African countries are being undertaken by a few of the country’s refiners,” If there are no checks and balances, more refineries may engage in such imports. Mehta continued by saying, “This also assumes significance in light of the recent US advisory on gold trade and imports from sub-Saharan Africa.”
The head of the IBJA maintained that gold dore can be imported as long as a licence is obtained from the Director General of Foreign Trade and the regulations for the Import of Goods that Carry a Concessional Duty are followed. In addition to this, he stated that they could not comprehend how gold dore could be imported from less developed nations with a permit from DGFT.
It is important to note that approximately one-fourth of the world’s gold supply comes from countries located in sub-Saharan Africa. Dore gold accounts for around forty percent of India’s annual gold import total of approximately 800 metric tonnes.
In India, there are around forty establishments that process gold. Of them, ten are now going through the auditing process to ensure that they are performing responsible gold sourcing.
The procedure of certifying the source of an item is challenging. “It’s a difficult procedure to go through, and the certificate needs to be updated on a regular basis. Because there was no such audit performed, the Indian refiner was forced to rely on the certificate that was provided by the vendor. These certifications are issued by the respective governments of the nations in which the gold was mined.
It would be unethical to call into question the origin of all the dore that is being imported into India from places such as the UAE. However, moving ahead, the US guidance may persuade refiners to go through the audit, which investigates whether or not the mines are following the relevant laws, according to a representative from the industry.
Despite the fact that the nations to the south of the Sahara desert generate a significant amount of gold, there are very few refineries in those countries. This is a significant contradiction. According to the recommendation issued by the United States Department of State, “the principal direct export markets for refining of gold from sub-Saharan Africa are reported to be the UAE, Switzerland, and India; however, transparency in the sector with respect to these relationships remains limited.”
When the bullion spot exchange in India finally starts operating, it’s possible that the country’s sourcing standards would tighten. According to the article, the company would be willing to purchase gold that came from mines that adhered to “kosher” standards and did not add any additional impurities.
