Gold repatriation becomes an issue in the Solomon Islands

Section:

Why Our Gold Bars Are in Hong Kong

By Daniel Namosuaia
Solomon Star
Honiara, Solomon Islands
Monday, March 31, 2014

http://www.solomonstarnews.com/news/business/23139-why-our-gold-bars-in-...

The Central Bank of the Solomon Islands says investing the country's gold bars in Hong Kong is important because of the closeness to buyers.

The bank was responding to questions raised by the Malaita Ma'asina Forum (MMF) as to why the bank has recently deposited its 31 gold bars in Hong Kong and not kept them in the country.

The MMF said it does not look right for a country like the Solomon Islands, whose economy and currency are going down, to deposit its gold bars overseas.

... Dispatch continues below ...



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"When we deposit these gold bars in Hong Kong, they are the ones benefiting and not us here in the country," Charles Dausabea of the MMF said. "It seems that this country has been remote-controlled by foreigners. And the central bank and the government have to take action against these foreign influences because it seems that what the government and the bank are doing is not to benefit the people of this country."

But in response the central bank said Hong Kong is one of the major gold depositories in the world and is well connected by international flights, and hence Hong Kong's handling and shipment of physical gold are very efficient and secure and meet international standards.

The bank added that Hong Kong is also centrally located and close to the main gold markets in the region.

"The cost of bringing the gold from Hong Kong to the Solomon Islands would be very high not only in terms of transportation but more importantly in the substantial security cost in moving the gold from Hong Kong to Honiara.

"Also, if in the future if we want to sell the gold to an overseas buyer, and if the gold is held in Solomon Islands, it has to be transported from Honiara to the buyer's nominated depository overseas, which could very costly for us.

"So in view of the considerations above it was decided to keep the gold bars in Hong Kong, where they were originally stored," the bank said.

The bank said it has no intention of bringing the gold bars back to the country because of the hefty transportation and security costs.

The bank said that at market prices last week the country's gold was worth SBD$266 million (US$36.6 million).

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