Page 39 - Bullion World Volume 03 Issue 07 July 2022

Bullion World | Volume 2 | Issue 07 | July 2022

Share of Dore in Total Gold Imports
Today, India depends on gold imports, either refined or doré, to meet its needs. Gold Dore Imports + Domestic Gold
Scrap account for around 30-40% of the total supply for the last few years. The refining sector plays a vital role in
taking these inputs and putting them in a form suitable for India’s Bullion industry. This growth in refining capacity has
facilitated a dramatic rise in doré shipments: from just 37 tonnes in 2013 to a record 276 tonnes in 2018. As a result,
gold doré’s share of overall imports has risen from just 7% in 2013 to around 22% in 2021.
India’s dependence on Gold Import

Issues in Dore Gold Refining constraints faced by mid and small- drilling operations require significant
business sized gold refiners in India. capital investments and long-term
commitments. Policy barriers to doré
The expansion of the Indian refining
import prevent Indian refineries from
sector has slowed in recent years a) LBMA accreditation
as GST eliminated the advantage entering into long-term contracts
enjoyed by EFZs and led to a Indian refiners face a chicken and with these mines.
cutback in new capacity within egg situation regarding LBMA
these zones. New refinery capacity accreditation. They cannot get dore These large miners have long-term
was further discouraged when the bars from large mines because contracts with globally domiciled
Uttarakhand government levied an they are not LBMA accredited and LBMA licensed refiners to whom they
entry tax of around 0.2% in March cannot become LBMA accredited submit doré bars on a toll basis (job
2016 to narrow the duty differential unless they have a large amount of work), and these are then processed
between DTAs and EFZs. Even dore coming from recognised mines and sold as pure bars to the banks
today, the remaining small-scale with required documents per LBMA from whom they have obtained
refineries face stiff competition for accreditation criteria. Even though finance. As a result, Indian refineries
a limited amount of imported gold at least 4-5 Indian refiners meet are forced to buy from artisan mines
doré. LBMA accreditation's net worth,
experience, and volume criteria, and pay for them in advance. This
Moreover, gold is available at a they can still not get it. India has only has the following consequences:
disparity in India compared to one LBMA refinery compared to 12 ™ India is at risk of non-
international prices. Therefore, the refineries in China and 73 globally. compliance with the
refining margins are not adequate Organization for Economic
to support doré imports for refining Cooperation and Development
locally. This is the primary reason b) Long-term Commitments (OECD)India Good Delivery
for a sharp decline in doré import Globally medium and large gold Standards (IGD) fail because of
for processing in Indian refineries. mines have committed or tied up a lack of doré supplies.
Indian refineries, despite having all their long-term production capacities
the wherewithals, have not been able with the big refinery firms operating ™ International banks do not lend
to procure even a single contract of in Europe, Africa, and Australia. to Indian refineries.
long-term dore supplies from large These rock gold mines' vertical
international mines. Following are the

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