Gold mining

Basic concepts

• Gold is found in the nature of the Earth almost everywhere. So, only in the world ocean (only in water) contains several billion tons of this precious metal, but its concentration is so small that it does not allow to recoup the costs of its industrial production.

• The share of gold in earth, stone, sand, ore is so small that to obtain 1 gram of gold, a minimum of 1 ton of ore has to be processed.

• As of 2015, gold is mined from ores of copper, zinc, silver, lead, while gold is not the main mineral in mining. As a result of the development of silver deposits, a significant part of gold is mined. This source is the most reliable, as the demand for silver is steadily growing.

• By 2015, in the entire history of mankind, the accumulated gold production amounted to 175 thousand tons, of which over 35 thousand tons in reserves from governments, about 90 thousand tons in jewelry, over 35 thousand tons in ingots and non-speculative coins. The rest is "dangling" somewhere.

Reserves in countries of the world

2020: Polyus is the largest gold reserves company in the world (104 million ounces)

Polyus became the largest in terms of gold reserves in the world at the end of 2020. The Russian company itself announced this at the end of April 2021. Read more here.

2017

Gold refining

Gold refining is a complex of technological processes for deep purification of gold from impurities.

For 2022 Switzerland , there are four large refineries located in, which collectively process two-thirds of the world's gold.

Gold production in the world

2021: China and Russia lead gold production

2020: China and Russia lead gold production

2017: China the leader, Russia in third place

2016: Reuters expects 3% decline in gold production

In January 2016, Reuters experts expect a 3% drop in global gold production in 2016, which will end the seven-year period of production growth.

2015:1% production growth to record 3.155 tonnes

According to Reuters data, gold mining in 2015 increased by 1% to a record 3.155 tons^[1].

2014: Russia enters second place in the world in gold production

Russian gold producers occupy the second place in the world in terms of production.

In first place in the list of miners is China (465 tons of gold in 2014). During the same period, Russia mined 272 tons^[2].

The third place with a slight lag is occupied by Australia, which previously overtook Russia. Australians mined 269 tonnes of gold in 2014.

2012: Canada and China buy up assets

January 2013: Although Canadian companies topped the list of the most active buyers in the gold mining sector in 2012 (243 deals worth $4.8 billion), Chinese companies are also keeping their finger on the pulse, showing activity in the market. In M&A 2011, the four largest transactions in the gold mining industry were made by Chinese buyers. China In 2012, it again accounted for four of the top ten deals announced in the gold mining industry.

As Alexei Smirnov, head of consulting practice for PwC mining companies in Russia, points out, Chinese state-owned companies remain interested in expanding their gold mining assets outside the country in order to ensure stable access to gold reserves in the future.

Over the past few years, China has been actively investing in the mining industry of African countries, emphasizes A. Smirnov. "There are several examples when Chinese and Indian companies invest in projects with commodities such as platinum, gold and coal in African countries. Chinese investors provide significant financial support, contributing to the development of capital-intensive mining projects, "the^[3] notes^[3].

1872

The largest of the gold nuggets mined. Weight 235.5 kg, and weight of pure gold in it - more than 83 kg. 1872.

Gold production in Russia

2024: Rosatom opened the largest gold reserves in Russia since 1991

Rosatom has opened the largest gold reserves in Russia since 1991. We are talking about the Sovinoye deposit in Chukotka, where more than 100 tons of precious metal are located. This was reported in the state corporation in mid-January 2024. Read more here.

2023

Khabarovsk Territory updated the record for gold mining and doubled silver mining

Khabarovsk Territory updated the record for annual gold production and doubled silver production. The head of the region, Mikhail Diaghterev, wrote about this in early February 2024 in his Telegram channel. Read more here.

Gold trading from Russia moved from banks JPMorgan and HSBC to small traders

After the banks left JPMorgan HSBC Russia, the trade in Russian gold passed into the hands of little-known firms. Dozens of logistics firms and traders, who are small players in the gold sector, have taken over the precious metals trade.

As of May 2023, gold imports from Russia are prohibited in the G7 and EU countries, but are allowed in other countries. Instead of sending huge shipments to London, where they settle in the vaults of top banks such as JPMorgan Chase & Co. and HSBC Holdings Plc, Russian supplies are sent piecemeal to places such as the UAE, Hong Kong and Turkey where there are no restrictions.

Among the new companies, Hong Kong-based VPower Finance Security Ltd. Its representatives say they are transporting cash and gold for some of China's largest banks. According to ImportGenius, from March to August 2022, the company transported Russian gold worth $300 million (for comparison, in the first two months of 2022, JPMorgan delivered $1.2 billion in precious metal).

The UAE became the main direction for gold: from March to August, precious metal worth $500 million was exported there.

Most of the buyers are in Dubai. Paloma Precious DMCC trader imported gold for $109 million, Al Bahrain Jewellers - $50 million.

ImportGenius calls Turkey another key destination for Russian gold - a precious metal worth $305 million passed through Istanbul airport.

2022

Russia successfully reoriented gold exports to Asia after the outbreak of conflict in Ukraine

Russian gold mining companies have successfully reoriented metal exports to Asia amid US and EU sanctions during the conflict in Ukraine, albeit with rising costs, follows from the Kept review in January 2023. The reorientation of exports is facilitated by record demand for gold from world central banks.

At the same time, Kept notes that Russian manufacturers retain the possibility of supplying to unfriendly countries by rebounding gold at enterprises in Kazakhstan or the UAE that have good delivery status.

Growth in gold exports to China by 67%

PRC customs reported an increase in gold supplies from Russia in 2022 by 67%. According to China's main customs authority, Russian companies delivered 3.7 tons of unprocessed gold and 2.96 tons in semi-processed form over the year.

Gold mining company Kinross Gold sold Russian assets and left the Russian Federation

As it became known on April 5, 2022, the Canadian gold mining company Kinross Gold sold Russian assets at a large discount and left the Russian Federation. The buyer of the business for $680 million was Highland Gold Vladislav Sviblov. The perimeter of the transaction includes the Kupol and Dvoyny mines in Chukotka, the Chulbatkan project in the Khabarovsk Territory, a number of exploration areas and industrial infrastructure facilities. Read more here.

2021

Production growth by 1.84% to 346.42 tons - Ministry of Finance

In 2021, Russia produced 346.42 tons of gold, which is 1.84% more than a year earlier, when the indicator was measured 340.17 tons. Such data were released by the Ministry of Finance of the Russian Federation on March 16, 2022.

According to the statistics of the department, in 2021, the production of mined gold in Russia decreased from 438.35 in 2020 to 429.26 tons, associated gold - from 319.05 to 288.12 tons. At the same time, the production of secondary gold increased slightly - from 208.33 tons to 228.32 tons.

19.9% of the gold produced was in the Krasnoyarsk Territory, 17.5% in the Magadan Region, 13.7% in the Republic of Sakha (Yakutia).

In the first half of 2021, gold production in Russia decreased. The Union of Gold Miners of Russia explained this by preventive measures to combat the COVID-19 coronavirus, seasonal suspensions of work due to climatic conditions at heap leaching facilities and placers, a temporary decrease in the contents of processed ores, as well as other reasons. " Production growth in the second half of the year was able to compensate for the decline in the first half of the year, as a result of which gold production for the entire 2021 increased.

The Ministry of Finance has been publishing statistics on the production of precious metals in the Russian Federation since 2014. The agency does not provide data on gold-bearing concentrates that are exported for processing and are not returned to Russian refining plants.

In 2021, according to World Gold Council estimates, the demand for ingots and coins among Russians amounted to 5.3 tons, said Vasily Karpunin, head of the information and analytical content department of BCS World of Investments. According to him, in 2021 this figure may grow by a factor after the abolition of VAT in the Russian Federation for the purchase of gold bars for investment purposes. Until March 9, 2022, this tax was 20% of the purchase price.^[4]

Share of gold exports from Russia - 9.2% of the world market

Share of Russian exports in raw materials markets (data as of February 2022)

2020

Reduction in gold production by 1%, to 340.17 tons

At the end of 2020, 340.17 tons of gold were produced in Russia, which is about 1% less than a year earlier. Such data are provided by the Ministry of Finance of the Russian Federation with reference to statistics on the supply of raw materials to Russian refining plants.

Production of mined gold in 2020 increased by 2% compared to 2019 and reached 291.21 tons. At the same time, the output of secondary gold decreased by 18%, to 31.61 tons, the associated - by 9%, to 17.35 tons.

The Ministry of Finance has been publishing statistics on the production of precious metals in the Russian Federation since 2014. The agency does not disclose data on gold-bearing concentrates that are exported for processing and are not returned to Russian refineries.

The decline in gold production is largely a consequence of the COVID-19 pandemic. In the spring of 2020, it became known about the outbreak of coronavirus at the Olympiadinsky mining and processing plant of Polyus Krasnoyarsk JSC, one of the largest gold ore deposits in Russia. Olympiadinsky GOK (owned by PJSC Polyus) in the Krasnoyarsk Territory produces more than 70% of the total gold in Siberia (in 2019 - 76%). In May 2020, the media reported that the number of cases at the Olympiadinsky GOK was about 1.3 thousand people (the total number of employees at the mine - 3.4 thousand).

The volume of gold production at the Olympics at the end of 2020 amounted to 1.2 million ounces (34 tons), which is 14% less than in 2019, the company said in January. At the same time, the volume of ore production here in 2020 fell by 21% compared to 2019 and amounted to 16 million tons.

In general, 2020 turned out to be good for the gold market: prices for it in January-December increased by more than 20%, which coincides with the difference between an increase in the money supply of dollars and an increase in the mass of gold. At some point, the price of the metal was above $2 thousand per ounce.^[5]

Exports of 300 tons exceeded production

In 2020, 300 tons of gold worth $18.5 billion were exported from Russia. The volume of exported metal exceeded the volume of produced.

Forecast of strong production growth in Russia

The risks of the introduction of new sanctions by the United States stimulate Russia to increase gold production in 2020-2021 more intensively, since in these conditions the Central Bank of the Russian Federation will be forced to increase its gold reserves.

By 2029, Russia may become the largest global gold producer, overtaking China and Australia, follows from the forecast of the consulting company Fitch Solutions from August 2020.

According to Fitch Solutions forecasts, gold production in Russia will grow on average by 3.7% year-on-year and increase from the current 11.3 million ounces to 15.5 million ounces by 2029.

2019: Production growth of 9.26% to 343.54 tonnes

In 2019, 343.54 tons of gold were produced in Russia, which is 9.26%. This is evidenced by the data of the Ministry of Finance of the Russian Federation. In 2018, production volume was measured at 314.42 tons.

Production of mined gold in 2019 increased by 8.18%, to 286.05 tons, associated - by 23.1%, to 19 tons. The output of secondary gold increased by 11.34% and amounted to 38.49 tons.

Gold production in Russia increased by 9.26%

The Ministry of Finance has been publishing statistics on the extraction of precious metals in Russia since 2014. The agency does not give data on gold-bearing concentrates, which are exported for processing  and are not returned to the refining plants of the Russian Federation.

According to the Union of gold industry entrepreneurs, following the results of 2019 in comparison with previous year the production of gold in Russia grew by 12% up to 367,952 kg, including: from mineral raw materials - for 12% up to 329,465 kg, from them: the affined gold in ingots from mining raw materials - for 10% up to 286,563 kg; of the po­put­no­go, 17.5% to 18,134 kg and zo­lo­to in the to­var­nykh kon­tsen­tra­takh - 46% to 24,768 kg. Pro­iz­vod­stvo zo­lo­ta from vto­ri­ch­no­go sy­rya uve­li­chi­los by 12% to 38,487 kg.

Pri­rost pro­iz­vod­stva zo­lo­ta in 2019 go­du in os­no­v­nom obes­pe­chi­li:

• PJSC Polyus - at the expense of an exit of Natalkinsky GOKa (Magadan region) on design capacity and also development of other ore assets of the leading Russian company;

• Petropavlovsk - due to input of capacities for processing of persistent concentrates on an autoclave complex in the Amur region which became a new hub on processing of persistent gold-bearing concentrates not only for the Petropavlovsk company, but also for some other the companies;

According to the Central Bank of the Russian Federation, monetary gold reserves in the international reserves of Russia (MRR) by May 1, 2020 amount to 73.9 million ounces (2298.6 tons). The value of reserves increased by 5.2% to 126.1 billion, and the share of gold in the MRR rose to a record 22.3%.^[6] 

2018:328 tonnes produced. From the bottom 285 tons mined (+ 5.3 %)

According to the forecast of the Union of Gold Miners, the total gold production in Russia in 2018 is expected to be 328 tons (+ 3.3%), including 285 tons (+ 5.3%) will be the primary metal - mining and associated extraction. Data for January 2019^[7]%.

2017:306 tons of gold 999.9 samples produced

According to data voiced by Eduard Utkin, General Director of the Guild of Jewelers of Russia, a total of 999.9 gold samples of 306 tons were produced in Russia in 2017. Of these, from mining, mine gold - 254 tons. Another 16 tons were produced from associated gold. From secondary raw materials - this is all kinds of scrap and industrial waste - 36 tons. I.e. 12% in the total volume of gold production is gold from secondary sources: pawnshops, purchases.

They consumed 319 tons, of which the Central Bank purchased almost 224 tons, 57 tons were exported, about 3 tons for ingots and coins, and 35 tons for jewelry.

"Based on this, we believe that today jewelry is made of gold, which came as a result from gold bought from the population, since these figures correspond to each other. The plants operate mainly on secondary raw materials. Although in practice, gold from pawnshops can go to the Central Bank's repository, to the jewelry factory, and to export, "said Eduard Utkin.

It turns out that new gold jewelry is at least 12% melted down old, and maybe 100%. It all depends on which batches were selected for cleaning at a specific plant at a specific time^[8].

2016: Forecast of production growth in Russia by 1.2% to 297 tons

According to the forecast of the Union of Gold Producers, in 2016 the total gold production in Russia will increase by 1.2% to 297 tons (+ 1.2%), including the production of precious metal from mineral raw materials (excluding the processing of scrap and waste) will grow to 259 tons (+ 1.6%), RIA^[9] reported^[9]3^[9]

2015: Russia produced 294 tonnes (+ 2 %)

Gold production in Russia increased in 2015 by 2% in annual terms to 294 tons of 257 kg, according to the Union of Gold Miners of Russia^[10]

Including:

• production of mined gold ingots increased by 2% to 235 tons 52 kg,
• production of associated gold - by 3% to 16 tons 731 kg,
• secondary gold - by 5% to 37 tons 725 kg.

Gold production in concentrates with subsequent sale outside Russia decreased by 17% to 4 tons 749 kg.

The forecast of the Union of Gold Miners of Russia for 2016 is "cautiously optimistic," it assumes an increase in gold production and production by about 1%. In the pessimistic scenario, the indicator is kept at the same level.

1936: Stalin increases production by 4 times in 4 years to 138 tons

Despite the fact that individual prospecting for Soviet consciousness was an alien element, the need for gold was paramount. The practical Stalin understood this perfectly well, endowing enthusiasts-gold diggers with all kinds of benefits. The country desperately needed funds for industrialization.

Any obstacles to free occupation of the gold trade were removed. Gold mining was allowed to engage in almost any category of the population, with the exception of former criminals. In a short time, the number of prospectors in the USSR reached 120 thousand people.

In 1927, Stalin set the Soyuz Gold trust the task of coming out on top in the world in gold mining, ahead of even the richest South African mines. The matter, however, was neither shaky nor valko. The plan for the extraction of foreign currency metal - 258.9 tons - for the first five-year plan (1929-1933) was not fulfilled. However, the mistakes were eliminated. By 1936, compared to 1932, gold production increased 4.4 times - from 31.9 to 138.8 tons.

In the future, the pace of gold mining reached a record 320 tons per year. Unfortunately, it was not possible to overtake the gold mines of South Africa, since the leader - Transvaal - increased gold mining to 400 tons per annum. However, this helped bring industrialization to life. The authorities managed not only to invest in industry, but also to save for a rainy day. By the beginning of World War II, the state treasury totaled about 2,800 tons of gold. It was this gold reserve multiplied by human resources that laid the foundation for the successes of industry during the war and contributed to the rapid restoration of the country from the ruins.

Production in China

On March 29, 2017, it became known that Shandong Gold Group, which ranks second in China in terms of gold production, discovered a deposit in the east of the country, which could become the largest in China, Bloomberg reported.

382.58 tons of gold were found in the Xilin mine in Shandong province. The stockpile could reach more than 550 tons after exploration work is completed in two years. Read more here.

See also

• Investing in gold

Notes