INTERVIEW - MMTC-PAMP gold refinery start delayed

Gold bars are displayed at a gold jewellery shop in Chandigarh November 4, 2009.

VARCA, India (Reuters) - India's state-owned MMTC Ltd expects production from its upcoming gold refinery, being jointly built with Switzerland's PAMP S.A., to be delayed by three months as more time had to be spent on installing modern technology, a senior official of the joint venture said.

The refinery was to start production by September, but it has now been delayed to December as "it took time for the company to absorb technology", Rajesh Khosla, managing director of MMTC-PAMP India Pvt Ltd told Reuters on Saturday at a conference in Varca in Goa.

The refinery, which is 72 percent owned by MMTC with PAMP holding the rest of it, is in Haryana and is expected to produce coins from 100 tonnes of gold in the first year, Khosla said.

"The demand for coins is quite good and prices haven't made much of a difference (to sales)," said Khosla, who has been the India representative for the precious metals company PAMP for several years, facilitating sales of gold bars and coins.

Khosla said the refinery, being built with an investment of 600 million rupees ($12.8 million), would import 160-170 tonnes of gold concentrates from South Africa and Australia as raw material as India hardly produces any gold.

India's investment segment for gold is small, but has been growing faster than the jewellery segment as Indians realise the benefits of holding gold as an investment product.

India is the world's top consumer of the metal and MMTC is one of its biggest gold importers.

In the April to June quarter, India's investment demand for gold was at 41.5 tonnes, up 7 percent on year, while jewellery demand stood at 123 tonnes, down 2 percent on year, data from the World Gold Council shows.

The second quarter of the calendar year saw gold notching up gains of nearly 12 percent -- the highest quarterly gain in more than two years -- as Europe's debt woes burnished the metal's safe-haven appeal. Spot gold hit a record high of more than $1,260 per ounce in June this year.

Khosla said the refinery aims to produce coins with 200 tonnes of gold in the second year of operation.

MMTC Chairman Sanjiv Batra told Reuters earlier this year that they also expect to export gold coins from the refinery.

(Writing by Ruchira Singh, Editing by Himani Sarkar)

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