Dubai investor Selim Fendi plans to open Monaco’s first gold refinery in early 2017 to meet demand from local and global jewellers looking to make sure they are not using metal from conflict areas.
Aurum Monaco will produce up to 1 metric tonne of gold a month in its first year, with capacity to boost that to 3 tonnes a month, Mr Fendi said in an interview. The gold will be from mines in Colombia, Peru, Chile and soon Ecuador that are financed by Mr Fendi’s Dubai gold-trading company Noble Precious Metal.
“Major luxury groups” are lined up to buy, mainly in Europe and the US, he said. At current prices, each month’s gold would be worth about US$40 million.
“Some jewellery brands in Monaco buy gold at a premium because they want gold that hasn’t harmed the environment, was mined using fair labour conditions and is traceable and conflict-free,” Mr Fendi, managing partner at Noble, said. “The big luxury brands don’t have enough gold that is certified. We will have full traceability from mine to refiner.”
Mr Fendi is planning the refinery even as global gold jewellery demand is shrinking and some factories are closing. MTC-PAMP India, India’s biggest gold refiner, temporarily stopped operations after weak demand and higher supply in the domestic market made it unprofitable. Global jewellery demand in the first quarter slumped 19 per cent from a year earlier, led by declines in India and China, according to the World Gold Council.
Monaco abides by the Organization for Economic Cooperation and Development’s due diligence guidelines for responsible sourcing of gold, according to Claude Cardone, president of Monaco’s chamber of watchmakers and jewellers.
“Monaco is a perfect place to have a gold refinery because Monaco has a concentration of wealth, and wealth brings gold,” he said by phone. “There is demand for gold in Monaco, maybe more than in many other places because there is a concentration of wealthy people, and the more people are wealthy, the more they want gold.”
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