Dubai investor Selim Fendi plans to open Monaco’s first goldrefinery in early 2017 to meet demand from local and global jewelers looking to make sure they aren’t using metal from conflict areas. Aurum Monaco SAM will produce up to 1 metric ton of gold a month in its first year, with capacity to boost that to 3 tons a month, Fendi said in an interview. The gold will be from mines in Colombia, Peru, Chile and soon Ecuador that are financed by Fendi’s Dubai gold-trading company Noble Precious Metal DMCC. “Major luxury groups” are lined up to buy, mainly in Europe and the U.S., he said. At current prices, each month’s gold would be worth about $40 million. “Some jewelry brands in Monaco buy gold at a premium because they want gold that hasn’t harmed the environment, was mined using fair labor conditions and is traceable and conflict-free,” Fendi, managing partner at Noble, said. “The big luxury brands don’t have enough gold that is certified. We will have full traceability from mine to refiner.” Fendi is planning the refinery even as global gold jewelry demand is shrinking and some factories are closing. MTC-PAMP India Pvt., India’s biggest gold refiner, temporarily stopped operations after weak demand and higher supply in the domestic market made it unprofitable. Global jewelry demand in the first quarter slumped 19 percent from a year earlier, led by declines in India and China, according to the World Gold Council. Monaco abides by the Organization for Economic Cooperation and Development’s due diligenceguidelines for responsible sourcing of gold, according to Claude Cardone, president of Monaco’s chamber of watchmakers and jewelers. "Monaco is a perfect place to have a gold refinery because Monaco has a concentration of wealth, and wealth brings gold,” he said by phone. “There is demand for gold in Monaco, maybe more than in many other places because there is a concentration of wealthy people, and the more people are wealthy, the more they want gold.” By Claudia Carpenter/bloomberg With assistance from Nayla Razzouk.