SINGAPORE - More gold will flow into Singapore next year following the establishment of a new gold refinery here.
Gold scrap that had been shipped from South-east Asia to other countries with refining capabilities will now instead come to Singapore, Metalor Technologies' country head Robert Gilles told The Business Times.
Last month, the Swiss precious metals refiner announced that it was investing US$15 million to build a gold refinery and bullion product manufacturing plant here. This will see a doubling of its headcount of 25 at Metalor Singapore which currently focuses on sales and technical support in precious metal plating.
The new Singapore plant, which is expected to be completed by the second half of next year, will use mostly secondary scrap, or recycled gold, as input material for a start, before eventually balancing it with input from junior mines in South-east Asia, Mr Gilles said.
The secondary scrap will come from collectors in South-east Asia, who are now selling to refineries in Hong Kong, Australia and Switzerland.
"What is happening now is you have the scrap going out of the region and coming back in the form of good-delivery bars. Because it's expensive to transport high value materials, it makes sense to have a refinery taking up the scrap, creating fine gold and then transforming this fine gold into bars," said Mr Gilles.
The Singapore plant will produce investment-grade bars in various sizes, with a capacity of 150 tonnes of gold each year. Metalor currently has four refineries in Hong Kong, Switzerland, the United States and China, with a combined capacity of 1,000 tonnes a year.
Total gold demand - coming mainly from jewellery, investment and industrial needs - reached 4,600 tonnes last year, according to the World Gold Council. Of this, 37 per cent went towards investment products. Demand for gold investment products has been steadily increasing in the past few years, though jewellery remains the most popular use for the precious metal.
Metalor's plans come on the back of Singapore's ambitions to become Asia's gold trading hub.