puts faith in Russian gold
Putin made a stop in the Russian city of Magadan on his way to
Moscow from Japan. The Magadan region used to be Russia's leading
gold-mining area and still plays a highly important role in the
gold industry of Russia. Putin conducted a special session in
the city, at which he set out a great interest in the development
of the gold-mining industry. Putin also agreed upon the concept
to increase the share of Russian gold in the nation's system of
gold and forex reserves.
second on the list of gold-rich states after the Republic of South
Africa and takes fifth place on the volume of global gold-mining,
behind South Africa, the USA, Australia and China. Explored gold
fields in Russia contain over 7,000 tons of the precious metal.
Russian gold-mining enterprises extracted 158.83 tonnes last year,
whereas the production volume in 2005 totaled 180.5 tonnes. Specialists
say, however, that the overall gold production in Russia may drop
by ten tons this year in comparison with 2004.
company is considered Russia's major gold-mining enterprise, which
deals with a quarter of the national entire gold industry. The
new development strategy of the company stipulates a considerable
increase in production in five years - from 35 to 140 tons.
When the Russian
economy was experiencing a state of deep crisis in the beginning
of the 1990s, the gold industry was suffering severe problems
as well. Production volumes were decreasing, gold-mining companies
and their shares were involved in fraudulent activities, etc.
The situation started improving after the ruble devaluation in
August of 1998, which eventually resulted in growing investments.
The state, however, was not paying much attention to all of the
above-mentioned transformations in the gold industry.
when world prices on gold have reached an 18 year high, and neared
the level of $500 per troy ounce, the Russian government decided
to act more actively in the national gold industry.
that the role of the state in this field should be rather significant,"
President Putin said in the beginning of the above-mentioned meeting
in Magadan. "Our country possesses considerable and unique
gold reserves. The exploration data received during the recent
years proved the existence of several other extensive gold fields.
Positive tendencies inside and outside the industry make for the
successful development of those large gold deposits. The growing
economic attraction of the industry gave an impetus to the inflow
of investment resources from other fields of the national economy:
from the oil complex, non-ferrous metallurgy and diamond-mining
enterprises. There have been quite positive conditions created
for the current investment trend to continue. I would like to
listen to adequate suggestions from the Ministry for Natural Resources,"
Vladimir Putin said during his speech.
call to increase the role of the state in the field of geological
survey sounded in response to complaints from the Magadan region
governor, Nikolay Dudov. The governor claimed that there was a
serious gap between the extraction of gold and the replenishment
of its balance reserves. Conducting a geological survey is not
profitable for Russian gold-mining companies at present; enterprises
were forced to develop their production with the help of the data
obtained during the Soviet period.
of the gold-mining production used to be one of the key activities
for the mining industry in the USSR. The vast majority of gold
fields, which Russian companies use now, were opened during the
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