Dubai's Kaloti strikes gold in South America

Kaloti Group, a Dubai company has struck it rich with the government of Suriname in a deal to build the South American country's first gold smelting plant.

Kaloti Group is building Suriname's first gold smelting plant. Osman Orsal / Reuters

A Dubai company has struck it rich with the government of Suriname in a deal to build the South American country's first gold smelting plant.

Kaloti Group, one of the world's largest gold and precious metals refiners and trading houses, has started building the precious metals refinery and bullion manufacturing plant in a project with operational funding of as much as US$20 million (Dh73.4m).

The refinery is part of a joint venture with the Suriname government and local gold traders and is expected to eventually produce as much as 60 tons of refined gold when it is fully up and running in 2016. Initial refining is scheduled to begin by the middle of next year.

Munir Kaloti, the chairman of Kaloti, said: "With the appropriate services, products and policies, Suriname can become a centre of excellence for the region's gold and precious metals industry."

Suriname produces an average of 40 tons of gold a year but until now it has had no large scale refining capacity.

"We are pleased to have been handpicked by Suriname's government to construct its first gold and precious metals refinery and mint house as they push ahead with their efforts of regulating, monitoring and modernising the country's gold and precious metals sector," Mr Kaloti added.

"It is a real testament to our international reputation and market leadership position based on more than 25 years of continuous operation in emerging markets and more than 17 years of collaboration with Suriname gold traders."

The Kaloti Suriname Mint House, as the facility will be called, will be the first of its kind in Suriname and the region, taking in the so-called Guyana Shield and the Caribbean.

It will focus on melting and producing gold bars to international purity standards of 999.9%.

At today's prices, and at full 60-ton capacity, the Mint House could add as much as $2.77bn worth of refined metal to Kaloti Jewellery Group's refined gold and precious metals output and physical trading activity, which reached $32bn in 2012.

Desiré Bouterse, the president of Suriname, said: "In order to maximise the value of our mineral assets, we have turned to Kaloti as our partner of choice in helping us construct our very first gold and precious metals refinery and to play a leading role in modernising this industry. This collaboration will bring significant value to Suriname and its mining industry in terms of international reputation, knowledge and experience of gold and precious metals refinery and bullion trading."

The refinery will also have a strategic location in trade terms, located in a special economic zone and in close proximity to Paramaribo International Airport.

Mr Kaloti added: "This joint venture strengthens our position as a global provider of refined gold and value added services and greatly enhances our capabilities to provide and serve the growing local and international needs of the government of Suriname and North and South America."

Suriname, which is located in northern South America,gained independence from the Dutch in 1975. It has a population of just over 500,000 and its economy is dominated by the mining industry, with exports of alumina, gold and oil accounting for about 85 per cent of exports and 25 per cent of government revenue.