Russia plans to use Canadian experience in domestic gold mining
Russia plans to use the experience of Canada in the field of geological exploration of domestic gold fields, that will take place through the attraction of startup private companies to invest funds in the conduction of geological surveys of the country’s gold fields.
These plans have been recently confirmed by Sergey Donskoy, Russia’s Minister of Natural Resources.
According to the Russian Ministry of Natural Resources, to date, the volume of investments, allocated by small startup companies in geological exploration of gold fields in Russia has been insignificant, not exceeding 10-15% in the overall structure of investments in exploration activities in the Russian gold mining.
The majority of funds for these needs have traditionally been allocated by leading local gold producers, as well as global majors, operating in the country. This is, however, contrary to global practice, where the conduction of geological exploration is usually carried out by small startup companies.
Due to this, according to state plans, startup companies should account for 65% in the overall structure of investments in the Russian gold mining. That will be comparable to the figures of Canada as well as some other Western countries and will bring the Russian gold mining industry in line with global standards.
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In order to implement these plans, the government has not ruled out the possibility of the attraction of some well-known Canadian experts in the field of gold mining, as well as some leading Canadian gold producers for the provision of the necessary experience in this field.
To date, the talks have already been started, while, as part of the state plans, is the attraction of some global majors, which have rich experience of gold production in Russia.
In addition, implementation of these plans will also take place through the establishment of special venture capital funds, that will accumulate investments, designed for geological exploration of gold fields in Russia with their further distribution among startup companies, which are interested in the conduction of geological exploration in the Russian gold mining industry.
Successful implementation of these plans should ensure stable operation of the Russian gold mining industry. That means that the annual reproduction of gold stocks in Russia should be at least about 280-300 tonnes per year, that would not be less than the annual volume of its annual domestic production.
In the meantime, Russian gold producers have already expressed scepticism, regarding with the latest state plans, implementation of which, according to them, may face with serious difficulties.
According to them, leading Russian gold producers as well as global majors, operating in the country, fear that the appearance of small players, many of which will be affiliated with the local authorities, could result in the seizure of promising gold mining areas by private companies, that will try to re-sale them to large companies with big premiums. That will be contrary to the Canadian experience, where the company acquires a subsurface area, which became its property along with its reserves.
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>