Mumbai, July 27

India’s largest maker and exporter of gold, Rajesh Exports, announced today it had bought Swiss metal refining giant Valcambi for $400 million in cash.

The Indian firm said it had been undeterred by a recent slump in world gold prices to a five-year-low as it announced the takeover in India’s financial capital Mumbai.

“This deal will add to Rajesh Exports’ earnings. Valcambi is a profitable, cash-surplus, well-run firm with no labour issues,” company Chairman Rajesh Mehta told reporters.

India vies with China as the world’s largest purchaser of gold but sluggish demand, combined with a strong dollar, saw prices fall last week to their lowest level since February 2010.

Mehta said he was confident prices would soon rise again as he stressed that the acquisition of Valcambi, one of the world’s largest gold refiners, would give Rajesh Exports a greater presence in international gold markets. “When people believe the right level is reached, buying will strike back with a vengeance,” he said.

India buys around 900 tonnes of gold every year, with many viewing it as the safest way to invest and protect against inflation.

But the Indian government is currently trying to reduce the population’s appetite for the precious metal, asking people to deposit their savings in banks and other financial assets instead.