India's biggest bullion refiner forays into silver for industrial use

India’s biggest bullion refiner is expanding its business to industrial silver as demand for the metal -- used in everything from switches to television screens --  is set to surge in the South Asian nation.

MMTC-PAMP India Pvt., which has the capacity to refine about 900 tons of gold and silver, has started making silver and alloy contacts -- --used in electrical fuse boxes and switches -- at a factory next to its refinery in the state of Haryana, Managing Director Vikas Singh said. 

The plant will produce more than 100 million pieces of contacts this financial year, with plans to double output by the end of March 2024, he said.

“We see a big opportunity on the industrial side", Singh said in an interview. “This is a logical line of extension for us to get into and it helps us cater to a fairly big segment, not only locally, but also globally.”

MMTC-PAMP’s plans to cater to demand for industrial silver comes as India seeks to boost the share of manufacturing in the economy. 

Prime Minister Narendra Modi’s administration has been offering production-linked incentive programs to attract automobile, solar panel and appliance makers among others to set up factories in the South Asian nation. Benefits have been visible in sectors such as consumer electronics, where Apple Inc. has moved some production from China, according to Bloomberg Intelligence.

Growing Share

“Silver’s share in the industrial space is growing in India,” London-based Metals Focus Ltd. consultant Chirag Sheth said. “New demand will come from the electronics and electrical sectors. As manufacturing in this space shifts to India, there will be a significant amount of growth likely in the future.”

India consumed about 4,500 tons of silver in 2021, with 40% of it in the form of jewelry and nearly a quarter in the industrial sector, according to Metals Focus. This year, demand is forecast to increase by almost a third to 5,900 tons, Sheth said.

MMTC-PAMP, a venture between the state-run MMTC Ltd. and the Swiss-based PAMP SA, expects India’s demand for silver to be driven by solar panels and batteries in the renewables sector and consumption of electrical products by the construction and real estate industry, Singh said.

The company has also set up an e-waste recovery plant that segregates precious metals such as gold and silver from mobile phones, computers and washing machines, for resale, Singh said. Investment in the industrial silver business will be roughly similar to the $25 million to $30 million it spent on setting up the refineries, he said.

The foray into industrial silver follows MMTC-PAMP’s recent diversification into setting up physical stores for selling coins and bars to retail investors, from targeting mainly bullion dealers.