By Eugene Gerden
Russia eyes to become the leading global gold producer and overtake China by 2026, according to statements recently made by the chairman of the Union of Gold Producers of Russia, Sergei Kashuba, during the Eastern Economic Forum in Vladivostok as well as statements made by some leading local gold producers.
Kashuba commented: “If the current trend of China’s decline of gold production (for the last six years) continues, while Russia’s production continues to grow (at least at moderate but stable growth rate of 1-2%), then we believe that Russia may become the world’s largest producer of gold on the horizon of five years.”
According to the Russian Union of Gold Producers, gold production in Russia in 2020 was 363.3 tonnes and there is a possibility production increase this year as well.
In the meantime, as Russia hopes for leadership in the global gold mining sector, China has no plans to lose the ground. The country has been the world’s largest gold producer for 14 years and the largest consumer ofÂ gold for eight years. During 2020, gold production in China fell by 4.18% to 479.5 tonnes.
China also has plans to accelerate its gold mining activities overseas that will take place by establishing control over some leading gold miners in emerging nations, primarily in Africa.
Currently, Chinese investors already control about 70% of the mining sector in the Democratic Republic of Congo and is planning to expand to other countries on the continent which have substantial gold reserves.
Still, according to some analysts, more active expansion of Chinese in the African gold mining sector may be prevented by the strong positions of some of its major rivals. In addition to Russia, which recently announced its intention to restore its presence in Africa (including its gold mining sector), the region has been traditionally within the sphere of Western gold miners.
One of them is Kinross Gold, which has been successfully operating in Mauritania for the lastÂ decade by controlling the Tasiast gold mine. The mine, located 300 kilometres north of the capital of Nouakchott, is one of the largest gold producers in West Africa.
Australia – another major gold producer – is also planning to accelerate gold mining activities.
In fact, the last two years have been the best on record for Australian gold producers. In the 2019/20 financial year 328 tonnes of gold was produced in the country, being one of the record figures in the last several years.
One of the recipes of success for the Australian gold mining industry is the existence of a larger number of smaller mines compared to some other gold mining countries, which gives some flexibility to the country.
According to predictions of industry research company, IBISWorld, the $26 billion Australian sector will see revenue rise 11.6% this year “due to continued uncertainty about the effects of the COVID-19 pandemic on the global economy.” It says the growth is also due to an anticipated surge in industry output and higher gold prices.
In the meantime, as global gold prices remain relatively high, many global producers plan more active development in 2022 as many confirmed good results achieved this year despite the pandemic.
John Mann, an official spokesman of Petropavlovsk plc, a London-based gold mining company and one of the largest gold miners in Russia, in an exclusive interview, said that the company continued its expansion activities this year.
Mann commented: “This year, Petropavlovsk completed construction of the Pioneer flotation plant, a new processing facility at our Pioneer mine that allows us to better take advantage of our reserves of refractory gold ore and to produce flotation concentrate to feed our state-of-the-art Pokrovsky pressure oxidation (POX) plant. The Pioneer flotation plant doubled the company’sÂ capacity to process refractory ore to 7.2 million tonnes per year, and we intend to further increase that capacity to 9 million tonnes/year by expanding our existing Malomir flotation plant. That project is in progress and scheduled for completion in Q3 2022.”
Mann added that the company hopes for high gold prices, as “a higher gold price obviously improves the economics of any project, so if there were to be sustained higher prices that could theoretically move more projects into the pipeline globally.”
Newcrest Mining Limited, one of Australia’s largest gold producers declined to comment.
Celina Watt, an official spokeswoman of the company, saidÂ it does not speculate on or forecast the gold price as the company focused on being a low cost producer.
Of note, Newcrest acquired a 70% interest and is operator (Imperial Mining 30%) of the producing Red Chris copper-gold mine in northwestern British Columbia.
Clearly, Eastern gold explorers and producers are enthusiastic participants in expansion activities within and outside of their home base countries.