Author: Paul Ploumis03 Jul 2014 Last updated at 08:25:21 GMT

EW DELHI (Scrap Monster): Leading financial services group- Edelweiss has announced setting up of a gold and silver scrap refining facility. The proposed refinery will be set up at Naroda, Ahmedabad. The facility will have annual processing capacity of 60 tonnes of gold or silver scrap per annum.

Edelweiss while announcing its decision to foray into gold and silver scrap refining, stated that its wholly owned subsidiary-Edelweiss Commodities will make an investment to the tune of approximately INR 60 crores to build the refinery.

Though the margins on processing scrap gold are low, the company hopes that state-of-the-art refining techniques and huge business volumes will generate decent returns. According to company official, scrap gold and silver or old ornaments will be melted at the refinery to produce higher purity gold bars, which will in turn be sold to local jewellers and bullion dealers.

Also, the company is reportedly trying to rope in an international partner which would enable them to source gold dore directly from overseas miners at discounted rates. This could sizably enhance the refining margins for the company.

The gold consumption in the country is expected to pick up soon with the start of festival season next month. The expected announcement of cut in import duty on gold would lower domestic gold prices in India. This could further boost gold sales in the country in forthcoming months.