Year of Depression

There is less Russian gold

Russian miners yesterday at the Zoloto-2006 exhibition announced a reduction in production for the first time in the last four years. According to the head of the Union of Gold Miners Valery Braiko, last year the total production of gold in Russia, including secondary and by-products, decreased by 3.5%, to 168.032 tons, and mining - by 4.3%, to 152.026 tons. At the same time, in the world, according to the US Geological Survey, gold production over the past year increased by almost 1%, to 2.45 thousand tons. And this is primarily due to countries that are not its main producers, their figure over the past year increased by 4, 5%, up to 830 tons. The world's main gold producers, which include Russia, which occupies sixth place in the corresponding world ranking, have reduced production. Thus, in South Africa (first place), production fell by 12%, to 300 tons; Australia (second) - by 2%, to 254 tons; USA (third) - by 3.1%, to 250 tons.

In Russia, the deterioration in indicators was mainly due to the fault of mining enterprises: for some it was due to weather conditions, for others it was due to depletion of reserves, mining of waste rock areas and other geological difficulties. A decrease in gold production was noted in virtually all traditional gold-mining regions of the country, with the exception of the Amur region, where the British-Russian Peter Hambro Mining distinguished itself; Chitinskaya, where Highland Gold Mining is successfully establishing production; and Chukotka, where placer mining is progressing well.

The former subsidiary of Norilsk Nickel, now an independent company, Polyus-Zoloto, significantly reduced production. True, in her press release she reported that at the end of the year the figure fell by only 0.3 tons, to 33.5 tons. But in reality the decrease was greater, because the data included another 1.1 tons of gold mined in fourth quarter at the Kuranakh field in Yakutia, which Polyus bought from ALROSA only in September. If we do not take this “increase” into account, Polyus’ production at the end of last year decreased by 3.8%.

The Union of Gold Miners predicts that gold mining in Russia will decline for at least another three years, until new facilities are included in industrial development. This is primarily the Natalka deposit owned by Polyus in the Magadan region, the Kupol deposit (owned by the Canadian Bema Gold) and Mayskoye (Highland Gold Mining) in Chukotka and a number of other objects. This year, the union expects production to decrease by more than 2 tons, to 150 tons.

This will happen against the backdrop of rising world gold prices (almost 10% in January alone; last night a troy ounce in London cost $568.9). A decrease in production will only fuel the already growing investment demand for this metal.

Anna LANDER