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EastRussia Bulletin: Friday Exclusive - Mining
The traditional exclusive industry analytical review of the EastRussia bulletin is this time summary statistics on the mining industry of the Far East. Results and prospects of gold, silver, diamonds and tin mining.
In 2020, a number of Far Eastern regions demonstrated an increase in gold production. However, in some gold mining regions, there was a decrease in production or a decrease in the growth rate of precious metal production, which is associated, among other things, with work under conditions of restrictions. In addition, some sites are experiencing depletion of reserves, which prompts the need to develop new projects and expand the resource base. In the area of diamond mining, ALROSA ended the year by increasing sales in the last month. However, the introduction of pandemic-related restrictions and a drop in sales in the first half of the year contributed to a decline in production. Tin mining has increased in the Far East, while the development of existing projects is also planned.
Gold mining results
The highest result in gold production last year was achieved by subsoil users of the Magadan region - 49,14 tons, which is 6% higher than the result of 2019. The volume of ore precious metal production amounted to 30,36 tons, and alluvial - 18,8 tons. Including the production indicators of JSC ZRK "Pavlik" (IC "Arlan") increased by 5,9% - up to 7,091 tons. Currently, the construction of the second stage of the gold processing plant is underway, which is expected to be commissioned in the third quarter of 2023. The result of JSC Polyus Magadan (PJSC Polyus) amounted to 14 kg of gold, while at the end of 035 (when it reached the design capacity of the Natalka GOK) produced about 2019 tons. Polymetal's enterprises in the Magadan Region - Magadan Silver and Omolon Gold Ore Company together produced 13 tonnes of gold, increasing production results by 7,8%. Including at Dukat (CJSC Serebro Magadana) 22 kg of gold were produced, which is 1% more than in 492. At Omolon, production growth was 6% (up to 2019 tons), due to processing (at the GOK " Kubaka ") rich ore of the underground mines" Birkachan "and" Elochka ".
Extraction of placer precious metals in the Magadan Region increased by 2,2% compared to 2019 and reached its maximum over the past 24 years. At the placers, the largest subsoil user is Susumanzoloto JSC, which provided 5,93 tons of gold last year.
At the same time, silver production in Kolyma continues to decline - in 2020, the reduction was 13,5%, to 572,5 tons. In particular, at the Dukat hub of Polymetal, silver production decreased by 6% (to 18,2 million ounces) due to the processing of low grade ores and the development of the Goltsovoye mine. In the long term, it is planned to compensate for the reduction by bringing the Primorskoye field into operation in the second half of this year.
The second result in terms of gold production in the Far Eastern Federal District is provided by Yakutia. At the end of 2020, the republic produced about 39 tons of gold, which is 2,5 tons more than in 2019. Thus, production at the Gross mine (Nordgold) increased by 7%, amounting to 278 thousand ounces. Nordgold expects to increase the processing capacity of Gross by 24% by the third quarter of this year - to 18 million tons per year, and in the first half of the year it is planned to complete a preliminary economic assessment of the project to increase the mine's capacity to 26 million tons per year from 2023. At another Nordgold mine, Tabornom, 77,3 thousand ounces were produced. Both facilities are located in the Olekminsky district. 7,5 tons of precious metal was provided by JSC Polyus Aldan (PJSC Polyus). The result of PJSC "Seligdar" was about 7 tons. It should be noted that the first stage of Polymetal's Nezhdaninskoye field is planned to be launched in the region this year. Its resources are estimated at 8,1 million gold equivalent ounces, and annual production is expected to be in the range of 155-180 thousand ounces.
Silver production in the republic in 2020, on the contrary, significantly decreased - by 66,4% compared to 2019, amounting to 78,1 tons, which, nevertheless, exceeded the established plan by 15%. The reduction is due to the completion of pilot production at the Verkhne-Menkeche field (Geopromining Verkhne-Menkeche LLC). Silver Bear Resources Plc, a large silver producer operating in the Kobyaysk region, provided 59,3 tons.
In the Irkutsk region, gold production in 2020 increased slightly - only by 0,97%, amounting to 25,5 tons. At the same time, the production of precious metal ore increased by 5% - up to 15 805,5 kg, while at placers a decrease of 5% was recorded, to 9 655,3 kg. Polyus Verninskoe JSC (Polyus PJSC) produced 8 kg of precious metal at the Verninskoe deposit (Bodaibinsky district) for the year, as well as Lenzoloto, which is part of Polyus, provided 764,92 kg (alluvial deposits in the Bodaibinsky district ). The production result of PJSC "Vysochaishy" was 4 kg, while its subsidiary LLC GRK Ugakhan received 454,8 kg. It should be noted that the license for exploration and production of minerals at the Golets Vysochaishy deposit (Bodaibinsky district) was extended until 3, and the balance reserves of the deposit were increased almost tenfold, to 557,4 tons of gold. At the placers in the Irkutsk region, a high result was achieved by the Vitim prospectors' artel, which recovered 2 kg over the last prospecting season, and Druza LLC with 392,7 kg.
Subsoil users of the Khabarovsk Territory in 2020 provided 24,5 tons of gold, which is 2,8% less than the result of 2019, when a historical record of precious metal production in the region was set. Last year, Albazino Resources LLC (Polymetal) produced 8,1 tons of gold at the Albazino deposit (Polina Osipenko district), which is 8% higher than the result of 2019. At another Khabarovsk asset of Polymetal, Svetloye LLC ”(Svetloye deposit, Okhotsk region), 3,7 tons of gold were mined (production decreased by 11% over the year due to a decrease in the content of precious metals in the ore). The total production of precious metal at Polymetal's Khabarovsk enterprises amounted to 11,8 tons (in 2019 - 11,7 tons). During the year, the Amur Mining and Metallurgical Plant processed 215 thousand tons of concentrate (an increase of 2%), from which 15,1 tons of gold were produced, which is 13% more than in 2019.A small increase in production was demonstrated by LLC Amur Zoloto ”(Kopy Goldfields) and JSC“ Mnogovershinnoye ”(Highland Gold Mining). Thus, the volume of gold mining at the Perevalnoye deposit of Amur Zoloto LLC (Ayano-Maisky District) increased by 25% (to 30,01 thousand ounces), but at the Yubileiny GOK, gold production decreased by 16% (to 14,13 thousand ounces) due to the low average content of precious metals in the ore.
Gold production in the Chukotka Autonomous Okrug remained at the level of 2019 (an increase by an insignificant 0,18%), amounting to 24,4 tons. Including, 22,45 tons of ore gold were mined, which is 2% more than in 2019. A significant amount of precious metal mining was provided by Chukotka Mining and Geological Company JSC (Kinross Gold) at the Kupol deposit in the Anadyr region (10 604,8 kg ), LLC Severnoye Zoloto (Kinross Gold) at the Dvoinoe deposit in the Chaunsky district (3 802,7 kg), LLC ZK Mayskoye (Polymetal) at the Mayskoye deposit in the Chaunsky district (5 kg), as well as JSC "Mine Karalveem" (Auramine Resources) with 029,6 kg and LLC "Rudnik Valunisty" (Highland Gold Mining) with 1 kg. Placer precious metal production in Chukotka decreased by 575,6% last year, amounting to 1 tons. The largest enterprise that produces alluvial deposits is Shakhtar Prospectors Artel LLC, which provided 432,8 kg of gold last year. Silver production in Chukotka in 16 decreased by 1,97% - to 742 tons.
The result of subsoil users of the Amur Region in 2020 amounted to 23 kg of gold, having decreased by 734,7% compared to 2019. In the region, significantly - by 9,7%, the production of ore gold decreased, amounting to 14 15 kg. At placers, production decreased by 150,3% to 1 kg. The drop in the production of ore gold in the Amur Region is due to a decrease in the performance of a large subsoil user - GK Petropavlovsk (in fact, it is now controlled by Yuzhuralzoloto), which is also due to financial problems and internal corporate conflicts. At the Malomyr mine of Petropavlovsk, production decreased by 8%, amounting to 584,4 22,3 kg, at the Albynsky mine, the reduction was 4%, to 358,3 26 kg (due to the depletion of the deposit, the company switches to the development of the Elginskoe satellite deposit) , and at the Pokrovsky mine - 3%, up to 933,8 kg.
At the same time, other subsoil users working in the region increased production last year. The production indicator of JSC "Priisk Solovyevsky" increased by 10%, to 3 kg (431 kg of alluvial and 2 kg of ore). Berezitovy mine (Nordgold) increased production over the year by 391% to 1 kg. Among the companies working on alluvial deposits, in addition to the Solovyevskoye Priisk, production was increased by PJSC Priisk Dambuki (by 040%, to 14 kg), and LLC Maristy (by 2%, to 113,1 kg).
The growth of gold mining in the past year was observed in Kamchatka - by 9% in relation to 2019, up to 6 863 kg. In particular, production of Kamchatskoye Zoloto JSC (Zoloto Kamchatka JSC, Renova group) increased by 68%, amounting to 1 kg at the Baranyevskoe, Zolotoe and Kungurtsevskoe deposits (Bystrinsky District), the production indicator of JSC SiGMA "at the Ozernovskoye field (Karaginsky district), having reached 049 kg. ZAO Trevozhnoe Zarevo (Trans-Siberian Gold) increased its production of precious metals by 61% at the Asachinskoye deposit (Elizovsky district), up to 1 kg. Decrease in production indicators was observed at some other assets of JSC "Gold of Kamchatka" - JSC "Kamgold" reduced production by five times (to 824,6 kg) at the Aginskoye field (Bystrinsky district), and JSC "Ametistovoye" by 8% reduced production at the Amethistovoye Penzhinsky district (up to 1 402 kg). As for the production of silver in the region, in 36 it decreased by 17%, amounting to 2 tons. The majority (542 tons) was mined by Ametistovoe JSC.
In Buryatia, the volume of gold production in 2020 increased slightly - by 1,9%, reaching 5 kg. The output of ore precious metal in the republic increased by 668,94% - up to 12,2 kg. The best results were achieved by PJSC Buryatzoloto (Nordgold) at the Irokinda and Zun-Kholba mines. At the same time, at the Irokinda mine (Muisky district), production increased by 3%, to 437,4 thousand ounces, due to an increase in ore processing. Placer extraction in the republic decreased by 3%, amounting to 39,6 kg.
Situation in the field of diamond mining
The past year turned out to be difficult for the diamond mining business. By the end of the year, OJSC ALROSA reduced its diamond production by 22% compared to 2019 - to 30 million carats. Thus, production at the Nyurba GOK decreased by 19%, amounting to 8,3 million carats, which was, among other things, due to the involvement in the development of areas with a lower diamond content. Production at the Aikhal GOK amounted to 8,1 million carats, a decrease of 20% compared to 2019. At the same time, as part of the implementation of measures to optimize the production plan, the operation of the Aikhal mine was temporarily suspended. Production at Udachninsky GOK decreased by 13%, to 5 million carats (the result was influenced by the suspension of work at the concentrator, at the Zarnitsa and Zapolyarnaya pipes), and at Mirninsky GOK, the figures decreased by 22%, amounting to about 2,3 million carats. The result of Almazy Anabara JSC amounted to 3,5 million carats, which is 32% less than in 2019.
Photo by AK ALROSA
Along with the decline in production, there was a drop in sales. At the end of the year, sales of rough and polished diamonds by ALROSA decreased by 16% compared to 2019, to USD 2,8 billion. The company sold 32,1 million carats of products, including 23,8 million carats of gem-quality diamonds and 8,3 million carats of industrial diamonds. Although the revenues from sales of polished products grew 2,3 times, amounting to $ 149,7 million, the bulk of the proceeds comes from the sale of rough diamonds ($ 2,65 billion), which declined due to the shutdown of the cutting sector and the impact of accumulated consumers. stocks. Nevertheless, by the end of the year a positive trend was outlined - in December the highest indicators were achieved, diamonds and grinding powders for $ 470,3 million and polished diamonds for $ 51,2 million were sold, and in general, sales of rough and polished products by ALROSA »In December 2020 amounted to 521,6 million dollars, exceeding the result of December 2019 (363,8 million dollars). December was the fifth consecutive month that the company's sales showed a recovery (from August).
For the first trading session of 15, which started on January 2021, ALROSA preferred to maintain zero requirements for the mandatory purchase of the contracted volumes for regular customers. This allows long-term clients of the company to request and purchase diamonds according to their real needs. It should be recalled that the company provides such conditions for the seventh month in a row. ALROSA is counting on the effectiveness of this policy, given that, despite the decline in sales in 2020, the company for the first time outstripped De Beers in terms of revenue from sales of natural diamonds and polished diamonds. In particular, ALROSA's revenue decreased by 16%, amounting to $ 2,802 billion (at the end of 2019 - $ 3,338 billion), while De Beers' revenue amounted to $ 2,781 billion (in 2019 - $ 4,04 , 2021 billion dollars). The company expects stable demand and sales during the first quarter of the year. This, in particular, is indicated by the results of ALROSA's sales in January 6,1 - sales of diamond products increased by 430% (to USD 7,9 million). At the same time, sales of diamonds and grinding powders grew by 40%, while sales of polished diamonds decreased by XNUMX%.
Prospects for the development of tin mining
Possibilities of further development of tin mining in the Far East are discussed. In 2020, the growth of tin mining was demonstrated by PJSC Rusolovo (part of PJSC Seligdar) operating in the Khabarovsk Territory - by 12,1%. Recall that work is being carried out at the Pravourmiyskoye (Verkhnebureinsky District) and Festivalnoye (Solnechny District) deposits. At the end of the year, the overall result was 2 tons. In addition, the implementation of the first stage of modernization of the Solar Concentration Plant made it possible to establish the associated production of tungsten and copper concentrates - 538 tons of tungsten concentrate and 72 tons of copper concentrate were provided for the year.
Photo of PJSC "Seligdar"
Rusolov's plans for the current year include the launch of the second stage of modernization of the plant, which implies an increase in capacity from the current 240 to 400 thousand tons of ore. Last year, Rusolovo also received a license to develop the Pyrkakayskie shtokverki site in Chukotka Autonomous Okrug (Chaunsky District). Its total
balance reserves amount to 243,4 thousand tons of tin and 15,99 thousand tons of tungsten oxide. This year "Rusolovo" expects to start technological research at the field, in 2022-24. it is planned to carry out engineering surveys and further design of production. According to preliminary plans, the capacity of the GOK is to amount to 14,3 thousand tons of tin and about 1,5 thousand tons of tungsten per year.
Meanwhile, the possibility of developing tin mining in the Jewish Autonomous Region is being considered. Maly Khingan Resources LLC (Traxys Europe SA) plans to start geological exploration at the region's tin deposits this year. Based on the results of exploration, it is planned to draw up a report with the approval of reserves and permanent conditions and prepare a feasibility study. The company expects to make a decision on the start of operation of ore objects no earlier than in 3-4 years. Currently, "Resources of the Small Khingan" is processing the technogenic reserves of the Khingan tailing dump (Obluchensky district). The total volume of technogenic reserves is 5,3 million tons of raw materials. The company also holds licenses for the development of the Yuzhno-Khingansky area, the Berezovskoye and Tsentralnoye fields.
Analytics on this and other relevant topics can be found in the weekly bulletin EastRussia.