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All agog over Agee gold refinery

Latha Venkatraman

SHIRPUR, Maharashtra, March 26

IN distant Shirpur, the inauguration of the Rs 257-crore precious metals refinery of Agee Gold Refiners Ltd was reason to celebrate. This was more than evident in the huge turnout at the venue.

An estimated 16,000 people had turned up at the venue, 450 km north-east of Mumbai, for what seemed more like a political rally considering the number of political dignitaries present at the inauguration.

Promoted by the politically inclined Patel brothers of Autoriders fame, Agee Gold Refiners in its full capacity is expected to produce 217 tonnes of gold and 217 tonnes of silver.

However, euphoria over the setting up of a refinery seems misplaced, though applauses came in thick and fast for statements by political dignitaries.

The refinery, set up with the latest technology provided by the US-based Precious Metals Technologies Inc (PMT), has jobs for 120 people.

The raw material in the form of `dore', or gold ore, will be imported from the mining countries including South Africa and Canada, said an official of PMT. Annual imports would amount to $2 billion.

The inauguration of the airport, with night-landing facilities at Shirpur, therefore, assumes importance as the logistics of importing raw material becomes easy.

The gold, to be produced in 10-tola bars, will be branded Zee Gold, made possible by an arrangement with Zee Network. Agee Gold Refiners will pay 20 per cent of its net profit as royalty for using the brand. Silver will be produced in 1 kg, 5 kg and 35 k g bars.

Domestically produced gold is something new for the Indian gold market, the largest in the world. The company officials point out that `preferred' buyers will be appointed and they will act as bullion dealers.

The sale will be on the basis of international prices and, therefore, a tie-up with Reuters has been necessitated for price information.

``As gold inventory involves huge cost, the product will be air-speeded to the buyers,'' said an official of the company adding that the marketing system will evolve with time.

According to officials of PMT, India was chosen for transferring the technology as it is the largest market for gold in the world.

The technologists maintain that the technology used in the plant is the latest. ``Refining of gold and silver involves a two-stage process. In the first stage, impurities will be removed with the help of chlorine for gold and oxygen for silver. In the se cond stage, which is an electrolytic process, contaminants will be removed bringing the gold to a 99.99 per cent purity,'' the official said.

However, bullion dealers in Mumbai are sceptical about the product. Says Mr Mukul Sonawala, President, Bombay Bullion Association, ``This is a new brand in the market. There will be a lot of reluctance to pick up this product. It is a new company inexper ienced in the area of bullion business.''

His reasoning stems from the fact that, traditionally, precious metal dealings have been based on trust.

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