Singapore consortium secures $850m for South32’s Australian coking coal
South32 said in February it had agreed to sell the business in New South Wales state for $1.65 billion.
Long the top importer of gold, India fell behind China in 2013.
And it is beginning to look less likely that it will be able to catch up anytime soon.
The decline in gold consumption in India came after bullion import duties were pushed up tenfold – from 1% at the start of 2012 to 10% – and other rules such as strictly cash only for imports, mandatory re-export of 20% of imports and transaction taxes stymied India’s gold industry.
The shortage of physical gold meant premiums over the London fix demanded by Indian gold traders from jewelers shot up as high as $180 an ounce during peak festival and wedding season last year.
Premiums remain high today at $70 an ounce.
That compares to recent discounts to the ruling global price on Shanghai gold markets.
Lifting the restrictions could unleash the pent up demand in India which during good years take in more than a 1,000 tonnes of world supply.
India is in the midst of a general election that is set to eject from power the Congress Party which has dominated Indian politics since independence.
A number of politicians and government officials have promised to lift the restrictions on the metal so central to the Indian culture.
But today the managing director of the country’s biggest refiner which is expanding capacity to 200 tonnes of gold per year, poured cold water on speculation that gold could start flooding back to the sub-continent.
Rajesh Khosla of MMTC-PAMP India Pvt told MoneyNews India “while the form of restrictions may change, the government will continue to restrain buying.”
That means the limits would result in shipments of 650–700 tonnes for the 12 months started April 1, close to last year’s levels and down from 845 tonnes in 2012–2013 according to finance ministry figures:
“I’m sure he [Finance Minister Palaniappan Chidambaram] will do something on 20:80,” said Khosla, referring to the import regulations. “You may come up with a quota system, you may come up with an auction system, you may ask the banks to bid. Freeing the import of gold as it used to be prior to the 20:80, I don’t think that is going to happen,” he said in New Delhi on April 8.
India imposed the import restriction to shore up the value of the rupee and cut down on the country’s crippling current account deficit.
Bullion and crude oil contributed almost 80% of the record $88 billion deficit in the past fiscal year.
The Finance Ministry has vowed the shortfall in 2013-2014 would be kept below $40 billion; an announcement that lifted the rupee off its record lows hit in August last year.
But that leaves little room for the lifting of import curbs.
