Russians designing ‘complex measures’ to attract Americans to invest in their gold
According to state plans, the attraction of foreign investors will allow to significantly increase gold production this year and to provide an impetus for the development of the domestic gold mining for the next several years.
According to Sergey Kaszuba, chairman of the Russian Union of Gold Producers, this year the volume of gold production in Russia will amount to 298.2 tons, that will be by 3% higher than in 2014.
According to Kashuba, devaluation of Russian currency – ruble, caused by Western sanctions, has allowed domestic gold mining companies to reduce the cost of production and to increase profitability, however these trends will evaporate by the beginning of 2016.
So far, the Russian Ministry of Natural Resources has already designed a package of amendments, which allow foreign companies to conduct exploration works and produce gold on the country’s subsoils, which has a status of federal significance, (which is mainly due to their huge reserves).
According to current Russian legislation and the existing federal law “On Subsoils”, the status of federal importance is applied to those gold fields, which operate the reserves of more than 50 tonnes.
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At the same time, in the case of oil fields, these figures are estimated at 70 million tons, while gas fields – 50 billion cubic meters.
According to Denis Hramov, Russia’s Deputy Minister of Natural Resources, so far, some Chinese and North American companies have expressed an interest for the establishment of gold production in Russia.
The Russian government believes that the attraction of foreign investors in the Russian gold mining industry is an acute need, as the country experiences a shortage of modern production technologies, due to sanctions, imposed on it, which also involved the imposition of a ban on the further imports of mining technologies to the country from the EU states, the US and Canada.
At the same time, according to state analysts, despite the current tensions between Russia and Western countries, Russia is still considered as one of the world’s promising regions for gold production by the majority of global gold majors.
For example, according to Alexander Darchiev, Russia’s ambassador in Canada, an interest to Russia was expressed by Kinross Gold Corp, the Canadian mining company, which plans to expand its business in the country.
Alexander Darchiev comments:
“The company plans to expand its operations in Russia, including through the participation in new gold mining projects in the country. Kinross Gold Corp also hopes that the Canadian government will not impose sectoral sanctions against Russia that may significantly complicate its further development in the country.
At the same time he has also added that the planned amendments in the Russian legislation will help Kinross to expand its Russian gold operations.
Last year Kinross Gold Corp produce 23 tonnes of gold in Russia on its Kupol and Dvoynoeu gold mining fields, located in Chukotka. This is equivalent to about 8% of all gold, produced in Russia in 2014.
Last year Paul Rollinson, CEO of Kinross Gold Corp, during the The St. Petersburg International Economic Forum (SPIEF), (a leading international economic and business forum held annually in Russia) said that Russia has huge potential in the field of gold production, which, so far, has been unlocked.
At that period of time Rollinson also said that the Russian authorities need to work to find new ways to develop the gold mining sector and attracting foreign investors. According to him, this should take place through the simplification of state regulation of the industry and bringing it to international standards.
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>