Japan acquires the gold giant refinery “Metalor Technologies”
Foreigners keep investing in Swiss refineries: this time, a Japanese company has acquired “Metalor Technologies”, the giant gold refinery.
Is this trending? If so, what would it imply?
Reuters, the British international news agency, reports that the largest Japanese gold market player, Tanaka Precious Metals, has become the new owner of the private Swiss refinery “Metalor Technologies International SA” enterprise.
Relationship between Japan and gold
According to Reuters, this purchase was made because of the desire of the Japanese to capture new markets in Europe, North America and Asia. Japan is a small market for gold jewelry, and its population traditionally prefers to buy public bonds to preserve their savings in times of crisis. However, a growing interest in gold as a safe-haven asset has been noticed among the Japanese over the last few years.
Who are the participants in this transaction?
Although the financial details of the transaction have not been disclosed yet, some information about the two entities might give a clue.
The Japanese company, Tanaka Precious Metals, has been in the gold market for more than a century, selling it since 1885. The company specializes in precious metals in namely jewelry and industrial products. Last year only, the company’s turnover amounted to 1 trillion yens (about 8.7 billion euros).
So far, most of the shares of the Swiss refinery “Metalor Technologies” (50,5%) still belong to the well-known French investment company “Astorg Partners”. Founded more than 150 years ago and still standing, the company is one of the major world suppliers of precious metals and related products.
Other Swiss refineries in foreign countries
In 2015, the Indian jewelry manufacturer “Rajesh Exports Ltd.” acquired the Swiss refinery company “Valcambi SA” at an all-cash deal of $ 400 million. This top one refinery has the capacity of processing 2,000 tonnes of precious metals annually. Particularly, gold refinery captures almost 80% of this volume.
Swiss manufacturers produce 2/3 of the world's refined gold, which means about 2,700 tons of this precious metal a year.
What is the reason behind these acquisitions?
In countries such as China, Japan, India and many others, buying gold is a means of wealth preservation planning. China, for instance, has 6 LBMA-licensed refineries. The country is eagerly buying gold and keeping it as a reliable commodity which protects against instability and inflation. As can be noted, gold is appreciated internationally.
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