OREANDA-NEWS. April 14, 2011. As related by ICBC Guangdong earlier, the Branch, since the launch of gold leasing service in August 2010, has leased more than 1000 kilograms of gold. Companies involved in the gold leasing are those engaged in gold mining, jewelry processing, electronic industry, trade contacts (involving gold), reported the press-centre of ICBC.

Gold leasing is a service whereby ICBC leases gold to companies who meet the conditions and collects leasing fee as agreed in the contract. Companies returns equal quantity of gold at maturity. The service is especially applicable for gold mining companies: companies using gold, gold processing or gold trading companies.

"Compared to other loan products, gold leasing service has its unique advantage", said an executive with ICBC. First, flexible leasing period. The longest period for one leasing contract is 12 months in line with the production cycle of the companies. Upon maturity of the contract, companies have the option either to continue or stop leasing according to the contract and the prevailing gold price. Second, low leasing rate to reduce the production cost of companies. Companies do not need to use cash to buy gold under the gold leasing. Gold leasing rate, in general, is lower than the interest rate of bank loan or short-term bond of the same term, which translates to large savings of financial cost to companies. III. Simple and convenient application steps. Companies get credit rating and credit line from ICBC, sign the gold leasing agreement with ICBC within the credit line, and take gold in different periods or one-time, under the framework of the agreement.

Industry insiders comment that Guangdong province is a highly developed province in China with key role played in the production of gold jewelry and accessories. Guangdong is a top gold producer in China in terms of technology, capacity and quality, and the province with the highest number of gold jewelry industry clusters. At present in China, Guangdong has 90% gold and silver jewelry companies with comparatively scale, consumes 70% gold for jewelry processing, occupies 80% gold jewelry wholesale volume and 40% export sales. This gives a bright prospect to ICBC's gold leasing business.