Russia plans to start development of largest national gold fields this year
Sukhoi Log, Russia’s largest gold field, with the proved reserves of 130 million ounces will be put for a tender by the Russian government during the next several weeks, according to an official spokesman of the Russian Ministry of Natural Resources.
Among the main bidders for the field are Russia’s state defence corporation Rostec together with Polyus, one of Russia’s largest gold producers, as well the Russian diamond monopoly ALROSA.
An interest for the participation in the tender has also been expressed by Russian billionaire Khazret Sovmen, (who is the former owner of Polyus and the ex-President of Russia’s Adygea Republic), as well as some Western mining majors.
According to recent statements of Alexander Khloponin, Russia’s deputy prime-minister, the development of Sukhoi Log, (which is located in the Irkutsk region of Russia), is expected to be one of the most important projects for the Russian gold industry for the last 16 years, while its implementation will be personally controlled by Dmitry Medvedev, Russia’s Prime-Minister.
It is planned that the tender will be conducted at the beginning of August of the current year, while the cost of the field will start from 5 billion rubles (US$80 million).
According to calculations of the Russian Ministry of Economy, the volume of investments in the development of the field is estimated at RUB 100 billion (US$1,5 billion). The majority of funds for the project are expected to be provided by Russia’s largest state banks in the form of loans, while the remaining will be allocated from the own sources of investors.
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The annual volume of gold production at Sukhoi Log should be 1.5-2 million ounces. The field is also designed for silver production in the volume of 20-25 tonnes per year.
According to Sergey Kaszuba, head of the Russian Union of Gold Producers, (a public association, which unites Russia’s leading gold producers) payback period of the project will vary in the range of 10-12 years. The project involves building of some large-scale infrastructure objects.
At present Sukhoi Log accounts for 28% of the overal Russian gold reserves and has the potential to further increase its resource base.
More than 80% of the reserves of the field are expected to be developed by open-pit mining method and will be completed during the period of 33 years. The development of residual reserves of the field by underground method will require additional 20 years.
It is planned that Sukhoi Log will not be a single Russian large-scale gold field, which development might be started already by the end of the current year.
As part of the state plans is conducting a tender for the development of the Chudnoey gold field, the field, which is located in the western slope of the Ural Mountains, 120 kilometers south of the Inta city (Komi Republic).
The volume of proven reserves of the field is 80.3 tonnes (2.58 million ounces). The field is designed for open-pit mining and is characterized by a high content of gold (4.9 grams per tonne). The project also involves building of a processing plant with the capacity of 1.2 million tonnes of ore.
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>