Government mulls bullion bank

Jakarta The government is planning to establish a bullion bank to manage the precious metal, considering Indonesia has one of the largest gold mines in the world, Coordinating Minister for Economic Affairs, Airlangga Hartarto, said.

“We have a big mine and the government is studying the plan to establish a bullion bank,” Hartarto said during a working meeting of the Trade Ministry here on Thursday.

Indonesia’s gold imports remain high amid an increase in the price of the commodity, despite the presence of the gold mine, he pointed out.

“This indicates there is something we need to evaluate regarding gold exports and imports,” Hartarto said.

With Indonesia’s gold and granule exports increasing to US$5,280 million in 2020, the minister said he is optimistic that the development of a bullion bank would benefit the country.

Citing the benefits of a bullion bank, he said, it would save the state’s foreign exchange, provide a funding resource for industry, product diversification for banks, and the public would get returns from gold savings.

The Grasberg mine in Papua is the second largest gold mine in the world after the South Deep Gold Mine in South Africa and has 30.2 million ounces of gold reserves, the minister noted.

Indonesia is the seventh largest gold producer in the world, with production in 2020 reaching 130 tons, or 4.59 million ounces a year.

Indonesia’s PT ANTAM, a junior gold mining company, produced 1.7 tons of gold in 2020.

Gold consumption in Indonesia remains relatively low, with about 172,800 ounces used in retail investment and 137,600 ounces used in making jewelry.

Trade Minister Muhammad Lutfi has assured the ministry will continue to mull on establishing a bullion bank by taking into account various aspects, including its effectiveness in controlling the gold market.

Source: Antara News