RANGOON — A Burmese public company says it will begin selling solid gold of 99.99 percent purity, the international standard, early next year.
Burma is rich in gold and already has a number mines extracting the precious metal, but exports of gold are currently banned.
A new mining law is reportedly in the works and the some local miners and gold sellers in 2012 formed the Myanmar Gold Development Public Company ahead of an expected influx of international mining firms.
Kyaw Win, the owner of U Htone Gold Smith Shop and the senior vice president of Myanmar Gold Development, told The Irrawaddy on Tuesday that the firm was getting ready to produce high purity gold.
He said that by Feb. 12, 2014, people would be able to buy coins and plates of 99.99 percent pure gold.
“The local pure gold is only 99.7 percent pure at the most, he said. “Local gold can’t meet the standard in international market.”
He said the gold would be produced using machinery from Hong Kong, and using techniques developed in Australia, and would be measured in grams rather than local Burmese units.
In lieu of a reliable banking system and a stable currency, Burmese have over the years bought gold as a secure asset for savings.
Ye Thu Aung, vice president of Myanmar Gold Development, said initially the gold would be sold on a small scale to savers.
“We mainly intend to make affordable amounts for all customers who want to save using solid gold individually with small amounts,” he said.
Solid gold will be sold in weights ranging from 2.5 grams to 100 grams, the smaller amount costing about 200,000 kyats, or about US$200, depending on the going rate.
“We did a survey in the local market and we found most customers are interesting to buy solid gold that meets the international standard,” Ye Thu Aung said.
According to the Ministry of Mines, there are five large-scale and 472 small-scale gold mines across the Burma. And the industry is gearing up for changes, despite the official ban on exports remaining in place.
Reuters reported in October that the Ministry of Mines had submitted a draft of a new mining law to Burma’s Parliament, and that it was expected to be passed into law in March.
The law is expected to open Burma up to foreign investment in the extractive industries.
Ye Thu Aung said the higher purity gold could eventually be for international sales.
“We intend not only for local gold buyers but also for the international market. We have been connecting with foreign countries about selling gold to the international market,” he said.
The owner of Aung Thamardi Gold Shop in Mandalay, who goes by the name Aung, said the other gold sellers would not be too perturbed by Myanmar Gold Development’s plans. Gold with a purity of 99.98 percent is already widely available, he claimed, adding that 99.99 percent pure gold was rare elsewhere in the region.
“It might be difficult to distribute in the market, I think,” said Aung, noting that the Myanmar Gold Development will sell shares to the public and therefore have numerous shareholders to think about.
“We need to change the local gold price according to the fluctuation of the world gold price, but since they are a public company, it will be difficult to change their solid gold price in a timely way because they need to get approval from many parties.”
Aung explained that when the local gold price is low, Burmese gold is smuggled to neighboring countries, and when the price is high, gold from China and Thailand floods the market.
The price of local gold price on Tuesday stood at 656,200 kyats ($667.55) per tical, the local measure for gold that is equal to 0.576 ounces. The international gold price was $1,240 per ounce, equivalent to about $714 per tical.
