Rand Refinery is building a facility in Singapore to analyse the quality of gold, as it looks to boost its supplies of scrap from Southeast Asia, the chief executive of the world's top refiner of the precious metal said on Tuesday.
South Africa's Rand set up a trading office in Singapore 18 months ago and the so-called assaying and sampling facility will be finished by year-end, Howard Craig told Reuters in an interview.
"You gotta be focusing on Asia," he said on the sidelines of an industry conference in Hong Kong. "I do think Singapore is becoming more important as a hub."
Singapore scrapped a 7-percent sales tax on investment gold in October, and the government is pushing to establish the city-state as a gold trading centre.
Rand has been looking to diversify its sourcing of raw materials to hedge against the declining output of dore, a mixture of gold and silver in cast bars, in South Africa.
That strategy helped shield the company from the labour unrest that has swept across the mining sector in South Africa this year, Craig said.
"At the moment, the rest of Africa is probably bigger than South Africa throughput," said Craig. "There's a big focus on scrap as a categorical material to replace some of the South Africa dore which is declining year-on-year."
About 20 percent of throughput comes from secondary material.
But Rand does not plan to establish refining capacity in Asia in the short term, and all secondary materials assayed at the new Singapore facility will be processed in South Africa.
India's physical gold demand has taken a hit this year due to a weak rupee and higher tax on gold imports, which could result in a 20-30 percent drop in Indian demand on the year, Craig said.
Rand, the biggest single supplier to China, is likely to ship about 100 tonnes of kilo bars to the country in 2012, similar to last year.
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