SJC gold reprocessing at snail’s pace

Dec 6th at 13:00

06-12-2012 13:00:26+07:00

Reprocessing deformed and substandard gold into SJC gold of Saigon Jewelry Company has come to a standstill, arousing concern in credit institutions over low SJC-brand gold liquidity.

At the moment, SJC has reprocessed only 165,000 out of 400,000 gold taels that has got approval for reprocessing. While deformed gold has been wholly reprocessed, it is more difficult to transform non-SJC gold, which is mostly owned by banks, and the progress is moving slowly due to time-consuming evaluation steps.

SJC each day reprocesses only 2,000 gold taels while its capacity is up to 50,000 taels per day. Gold evaluation is very slow as there are not enough testing machines, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch.

Banks earlier mobilized various brands of gold but customers now withdraw SJC gold only as per the agreement between banks and depositors. As the ban on gold mobilization has been valid, banks have to prepare a large volume of SJC to repay their clients.

If SJC gold is not reprocessed timely, banks will have to buy gold to pay their clients, piling huge pressure on the market, Minh explained.

Up to now, there has been no approval for temporary export of gold bars to re-import gold bullion to shorten the evaluation time.

Nguyen Thanh Toai, deputy general director of Asia Commercial Bank (ACB), said if this scheme was approved, gold reprocessing would be faster and banks would not have to advance money to buy gold.

For any solutions, banks still suffer losses due to the gold price difference, which is over VND3 million a tael now. A tael is equivalent to 1.2 troy ounces.

Therefore, ACB hopes that the scheme of temporary gold exports will obtain approval to help banks improve gold liquidity, Toai said.

The gold mobilization ban at banks has yet to stimulate gold selling. SJC deputy sales director Nguyen Cong Tuong said that the enterprise still trades between 800 and 1,000 gold taels a day, which is similar to the period before November 25 when the ban took effect.

In related news, Minh added that there were 21 units, comprising 13 enterprises and eight banks, registering to trade gold bars under Decree 24 as of December 3. Eligible units will receive licenses to begin their business early next year.