PETALING JAYA: Recycled gold is a good contribution towards the global call for environmental, social, and corporate governance (ESG) initiatives.

According to Public Gold group founder and chairman & Malaysian Gold Association president Datuk Wira Louis Ng, recycled gold is “good” because it is sustainable and does not cause environmental damage compared with new gold as the latter would involve mining and chemical extraction using cyanide.

“(For a) new gold mine exploration, you need to demolish the jungle, dig the ground ... use cyanide to extract gold and things like that. So, with recycled gold, you don’t need to (go through those processes),” he told SunBiz recently when met at an event.

Ng pointed out that London Bullion Market Association as well as regulatory bodies preferred recycled gold because it goes well with global ESG initiatives and furthermore global refineries have set certain quotas to source recycled gold.

“The refinery have certain quota, they cannot have all (its gold) source come from the mine. There are certain quota from recycled jewellery they need to fulfill (in order to maintain) their ESG status,” he said.

He shared that Malaysia has a significant amount of recycled gold or jewellery and currently the country has no gold or jewellery refinery despite having about five gold mines in operation.

“Malaysia has a lot of recycled jewellery, recently I exported a lot of jewellery to a refinery in Singapore, Metalor, and we do not have refinery in Malaysia,” he remarked.

To date, he said there are no discussions between any players to invest in a refinery in the country.

“The procedure (to start a refinery) is very long, capital-intensive. It’s not hard to apply for the licence, but you have to invest and you need to have (gold) resources to refine,” he added.

Ng said that local gold associations could request the government for assistance such as special policies or grants in order to promote players to start a refinery.

Meanwhile, Federation of Goldsmiths and Jewellers Associations of Malaysia president Datuk Chiah Hock Yew foresees that the gold market prices will be “down” for now before picking up in the second half of the year (H2’23) and believes that now is a good time for consumers to purchase gold.

He expects the local gold sales to increase to about 30% towards H2’23, driven by two upcoming nationwide jewellery fairs.

“Towards H2’23, 30% increase in sales, driven by business activities. Jewellery associations will conduct jewellery fairs in June and August. We expect with the fairs, jewellery sales will go higher,” he remarked.

In terms of player sentiment, Chiah said that local players with over 4,000 outlets throughout the country are “optimistic” with the industry this year and will hold promotions to boost up their sales.

On jewellery online sales, Ng said that the sales on the medium is still “insignificant”compared with offline sales but pointed out that smaller grammes of gold are more popular online compared with higher grammes of 30g or 40g of jewellery, which many consumers prefer to buy offline.

However, he believes that the percentage and the total amount of online sales will continue to increase in the future.

“Poh Kong and Tomei presented the figures, actually their offline store sales increased a lot after the Covid-19 pandemic, the results about 60% to 70%,” he said.

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