Dubai Group takes stake in Australian mine

The first major investment in a gold producer from within the emirate, which has long been a center of bullion trading.

The finished product: Gold bars and coins produced in Australia.

The Dubai Group will pay US$35 million (Dh128.6m) to buy an 18 per cent stake in a major Australian gold producer . Dubai has long been a centre for gold trading and lists several foreign gold companies on its stock exchanges, but the investment marks the first time a firm in the emirate has taken a major stake in a gold mining company. Abdulhakeem Kamkar, the chief executive of Dubai Ventures Group, the subsidiary of Dubai Group which is handling the investment, said the deal was an effort to get involved in "a potentially lucrative niche segment in the commodities sector".

"Gold, like oil, continues to play a significant role in the global economy as a fundamental backbone of the financial services sector and a key safe-haven commodity," he said. The investment would also help Citigold expand production at the Charters Towers gold mine in northeastern Australia and increase the company's yearly output to 250,000 ounces. Citigold, Australia's 13th-largest gold producer, is in the midst of drilling a 2,000-metre-deep hole at Charters Towers. It estimates the mine may contain up to 10 million ounces of gold.