Russia ready for significant increase of domestic gold mining in years to come

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By Eugene Gerden

Russia plans a further major increase of domestic gold mining in years to come that will be achieved through the development of new gold mines and accelerating the further development of the already existing gold mines, according to recent statements made by representatives of some leading Russian gold mining companies and local media reports.

In terms of gold reserves, Russia currently ranks first in the world with a share of about 13%, while ranking 3rd in terms of production with a share of about 9%. Last year, gold production in Russia amounted to 340.17 tons, slightly less than in 2019 with a reduction of 0.98%. There is a possibility that gold production in Russia may have already significantly increased this year.

The majority of gold produced in Russia in 2020 was sold for exports, the volume of which amounted to about 320 tons. While a few years ago, exports were insignificant, as the bulk of domestic gold was purchased by the Bank of Russia, the situation has changed in recent years.

Alexey Kalachev, a senior analyst at FINAM Group, one of Russia’s leading analyst agencies in the field of mining and finance, said in an interview with the local Regnum newswire, “active gold purchases by the Central Bank supported the domestic gold mining industry during the period of low prices and allowed the state to form significant gold  reserves.”

According to recent statements made by the Minister of Natural Resources of Russia, Alexander Kozlov, “at the current rate of production, gold reserves in Russia will be enough to ensure stable production for the next 40 years.”

Mr. Kozlov goes on to say, “Russia regularly increases its resource base for gold.” This is reflected by official data, since 2010 the country has increased its gold reserves by about 6,000 tonnes.

Over the past decade, three large area plays have been further explored, among them are the Natalkinskoye and Pavlik gold deposits in the Magadan region, the Gross gold deposit in Yakutia and the Verninskoye in the Irkutsk region. Kozlov added, “the Sukhoi Log field in the Irkutsk region and several large areas in the Far East are also being prepared for development.”

According to local analysts, a significant increase in gold production in Russia can be expected from 2026, when production will start at the Polyus owned Sukhoi Log field, one of the largest gold fields in Russia and the world with 40 million ounces proven and probable gold reserves and 67 million ounces measured, indicated and inferred mineral resources.

In recent years, Polyus has significantly strengthened its position in the domestic market as one of the largest gold producers in Russia, which accounts for approximately every fourth ounce of gold mined in Russia at present.

With Sukhoi Log reaching full capacity, the company will increase its production by about 80% and will be one of the top three gold mining companies in the world.

In general, with the commissioning of Sukhoi Log in 2026 total gold production in Russia could grow by about 20%.

According to Deputy Prime Minister and Plenipotentiary of the President of Russia in the Far Eastern Federal District Yuri Trutnev, hopes are also put on the intensification of geological exploration in the Magadan Region, the least populated region of Russia, which could become a new center of gold mining in Russia in years to come.  In 2020, the region’s mining enterprises extracted 49.14 tons of gold from ore and placer deposits. That became a record result over the past 45 years, when 49 tons and 600 kg of gold were mined within a territory of the region in 1974.

In addition, a further increase of production is planned for Kamchatka, where a new underground mine and a new stage of processing complex will be established on the basis of the Ametistovoe region in the Kamchatka priority development area, which is the largest gold mining enterprise in Kamchatka.

In general, the authorities of Kamchatka plan to increase gold production to 10 tons by 2022 by commissioning new mining and processing plants. These include an enterprise at the Kumroch gold deposit with a capacity of up to 500,000 tons of ore per year and a processing complex with a capacity of 600,000 tons of ore per year at the Ozernovskoye gold deposit.

For 30 years after the collapse of the USSR, Russia has been developing its gold mining industry. During this time, the country produced more than 6,000 tonnes (194 million ounces) of gold, including associated, secondary and gold in concentrates, providing about 10% of the annual world production.

 


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