Red Flag Raised Over Multi-Fold Surge in Gold Dore Imports

Even pure gold bars are camouflaged as dores in order to take advantage of the duty differential.

SEATTLE (Scrap Monster): Industry participants in India have raised concerns over the rising volume of gold dore imports by the country.

According to Association of Gold Refineries, the gold dore imports by the country are expected to total around 280 tons in 2019, significantly higher by almost 8% from 260 tons imported during 2018. Over the years, the share of gold dore in the country’s total gold imports have witnessed notable jump. The share, which stood at around 6% in 2014, is currently projected at nearly 40%.

The refiners must assign top priority to responsible sourcing. There are chances that the refiners might get trapped for sourcing gold from illegal sources. Incidentally, major part of the dore is sourced from artisanal and small-scale miners, mainly in African and Latin American companies, which are generally linked to unlawful activities including child labor, drug trafficking and terrorism. The government should make necessary intervention to put an end to illegal sourcing of gold dores. Incidentally, India is a party to OECD guidelines that calls for responsible sourcing.

Trade officials revealed that a few Indian companies with offices in West Asia were found to source gold dores from artisanal miners at a much cheaper rate. Also, the lower import duty of 9.35% for dores, as compared with 10% import duty on gold bars, makes dores the preferred choice. Even pure gold bars are camouflaged as dores in order to take advantage of the duty differential, they noted.

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