India becomes top importer of Gold Doré Bars from Bolivia
La Paz (March 19) Ahead of President Ramnath Kovind’s visit to the South American nation Bolivia, a high level twelve member delegation of representatives from companies including Sovereign Metals Ltd., Gujarat Gold Centre, Abans Group, Bangalore Refinery and Kundan Group are visiting the country seeking collaboration with the miners and chambers that would help in importing of gold doré bars.
Confirming this to Financial Express Online, Juan José Cortez Rojas, Chargé d’Affaires, of Bolivia in New Delhi said, “The twelve member team is going ahead to La Paz and will be meeting with the miners and will explore options to collaborate with National Chamber of Commerce (CNC) and Santa Cruz Chamber of Industry and Commerce.”
According to Cortez, this meeting was planned at the recently concluded Global Gold Dore Forum.
In 2018, Bolivia exported $ 720 million of gold to India (70% of the national gold production), followed by gold exports to the United Arab Emirates that received almost 30% of the Bolivian gold production.
Gold is a non conflicting metal and is available in abundant quantities in countries like Bolivia, Peru, Ecuador, Ecuador, Guyana, Colombia, Honduras and Nicaragua. Though mining gold is very expensive, the private players have a crucial role to play as they buy raw gold through Dubai exchange which has preferential treaties with a lot of these countries. According to MMTC, “The South American countries are gradually concentrating on gold exports to fuel their economies.”
Interestingly, India has increased its buying of gold doré bars from Latin American countries and the private companies purchase the gold doré bars from these countries and then refine the raw gold in in facilities dedicated to the process as it costs less.
In Bolivia, mining is the second most important activity and represents 30% of the global exports and gold is the second mining sector in Bolivia with an annual production of around 25 tons. In the period from January to September 2018, the value of gold production increased in Bolivia reaching a value of $ 923 million, with an increase of 36% compared to the same period of 2017.
“It is estimated that the final gold production during 2018 achieved a value of $1.100 million and in 2018; the landlocked nation exported approximately $ 1.000 million of gold. Almost $ 100 million of the national gold production was commercialized in the internal market,” adds the Bolivian envoy.
According to him, 99% of the gold production relies on private actors, operating with a cooperative or private business model and the production model is mainly organized in cooperatives that account for 93% of the total gold production and the remaining 7% is in the hands of private companies.
Is Bolivia ready for private players?
The cooperative sector has a special legislation that permits the access to some benefits such as lower taxation, exemptions from workloads and easy access to deposits. The special benefits for the cooperative model pushed private companies to adopt this form of organization to obtain greater profits.
Sharing estimates from Bolivian National Chamber of Commerce, Cortez said that, “In 2018, Bolivia exported $ 720 million of gold to India (70% of the national gold production). This forms major portion of the trade between the two countries.”
FinancialExpress
