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Far Eastern gold: passwords, turnout, players

Gold mining is one of the most dynamic industries in the region

The depletion of the mineral and raw materials base of existing deposits forces gold miners to expand their search horizons, moving away from the established infrastructure, creating a new one. For this, companies have to bear additional costs for logistics and energy supply. Nevertheless, in the Far East, with the opening of large ore-dressing plants, new points of growth of the industry appear.

Far Eastern gold: passwords, turnout, players
One of the largest regions of Russia in reserves of indigenous and alluvial gold is the Magadan Region. And for the production of silver (its production is planned to be increased to 2017 in 675) in Russia Kolyma holds the leadership. In the first half of the year, local miners extracted 11,7 tons of gold. This is a third more than a year earlier. In the current season, fishing on placer deposits in the region began in late April, and by July 4,5 t of precious metal (+ 8,63% to last year's level) was already mined. In terms of ore, during the reporting period, production increased by almost one and a half times - up to 7,2 tons.

According to the Minister of Natural Resources and Ecology of the Magadan Region, Vladimir Mitkin, the peak of the production of precious metals in the region occurred in the 1930s – 1940s, with the creation of the Dalstroy trust. At that time, the annual gold production reached 80 tons. Subsequently, the volume of production was more modest, although for a long time production was kept at a fairly high level - 30-50 tons per year. In the post-Soviet period, the decline was deeper, including due to the development of large deposits. The historical minimum fell on 2008, when only 14,7 tons of gold were produced.

True, in the past six years the industry has been on the rise. In the last industrial season, gold mining enterprises of the region produced 27,9 tons of precious metal, which is 3,4 tons more than the previous figure. The five leaders are JSC Polymetal (its assets are LLC Omolon Gold Ore Company and JSC Serebro Magadana), JSC Susumanzoloto, ZRK Pavlik JSC (part of the Arlan investment company), the Arbat concern and the GDK Berelekh OJSC. By the end of 2017, it is expected to produce 30,9 tons of gold.

The increase in production in the region is largely due to the expansion of production at the Pavlik deposit. As you know, a year and a half ago a gold extraction factory was opened here. Already in 2016, "ZRK Pavlik" received 3,8 tons of gold. And in the future plans - to increase the annual production to 12 tons.

Great expectations are also associated with the development of the Natalka deposit, where a powerful GOK is built, capable of processing up to 10 million tons of ore per year. Realizing the project, the company "Polyus" twice postponed the launch of the facility. According to the latest data, the governor of the Magadan Region Vladimir Pechenyi specifies, the Natalka deposit is planned to be commissioned by the end of 2017. The fact that construction work on Natalka is moving to completion, says the CEO of PJSC "Polyus" Pavel Grachev.

The opening of modern production facilities has a positive effect on the performance of the industry in the Kamchatka Territory, which is adjacent to the Kolyma. So, in 2016, the plants of Zoloto Kamchatka JSC (part of the Renova Group of Companies) increased gold production by 114% - up to 5,4 tons and by 309% silver - up to 7,7 tons. The main volume of precious metals was provided by the GOK Amethyst ", which became the mountain project of the year for the peninsula in 2016. In 2017, the company intends to consolidate the achieved volumes of gold production, but in the future it expects to increase due to the new resource base. This summer, the drilling season has begun at the Kumroch field, one of the most promising in Kamchatka. The total investment in geological exploration in 2017 will amount to about 1 billion rubles. It is planned to build an enterprise at the Kumroch deposit that will produce 3,5-4,5 tons of gold annually.

However, positive dynamics in the production of precious metals is not observed in all subjects of the Far Eastern Federal District. Chukotka subsoil users last year produced 29,1 t gold - 3 t less than in 2015. The reduction in volumes is due to a decrease in 9,1% of ore production due to the development of reserves at a number of mines, the administration of the PJSC specified.

Indeed, the depletion of the mineral and raw materials base of large operating deposits is a serious problem for the Far East industry. This forces subsoil users to expand their search horizons and move away from the already established infrastructure. Thus, Polymetal, at 240 km south-west of Okhotsk, put Svetloye into commercial operation. Capital expenditures for the facility with an annual capacity of 2,5 t gold amounted to $ 80 million.

It is worth noting that in 2015-2016 years Khabarovsk region managed to attract more than 16 billion rubles of investments into the development of the mining industry, thereby laying the foundation for further increase in the volume of mining. As the head of the regional ministry of natural resources Alexander Ermolin noted, in the Mykolayiv district the "Belaya Gora" ore mining and processing enterprise is now successfully operating. In 2016, the volume of gold production was increased at Mnogovershinnoye (part of Russdragmet) and Resource Albazino (a subsidiary of Polymetal). Amur Gold LLC (controlled by the Russian Platinum Group of Companies) launched the Yubileinaya gold extraction plant at the Krasivoye deposit. The same company started development of the Perevalnoye gold deposit in the Ayano-Maysky district. In total in 2017, mining companies of the region plan to extract 19,5 t gold and more than 1,5 t of platinum.

Since the trend in recent years has been an increase in the share of underground development of reserves, and, as you know, the cost of underground work is higher compared to open pit mining, creating an investment attractiveness of the industry is today a non-trivial task for the regional authorities. For example, in the Khabarovsk Territory, almost 80 km from Komsomolsk-on-Amur, the largest gold-copper-porphyry deposit, Malmyzhskoe, was discovered. The search for metals in this ore field has been carried out since 2010, as a result of appraisal work, its approved reserves are 5,6 million tons of copper and 298 tons of gold. The Amur Minerals company, established by the American Khabarovsk Minerals LLC, was allowed to develop the strategic field. The start of industrial development is scheduled for 2021; by 2025, a mining and processing plant with a production capacity of 75 thousand tons of copper and 3,6 tons of gold in concentrate will appear here annually. By this time, Amur Minerals intends to invest over $ 1,5 billion in the project.

It should be said that in the south of the Far East there is still not so rich experience in attracting foreign investment in the industrial development of precious metals. In the late 1990s - early 2000s, there were many Chinese artels in the Amur region, but they, as a rule, were engaged in small deposits of placer gold. Whereas, for example, international players entered the large license areas in Chukotka at that time.

Today the Canadian Kinross Gold Corp. is actively conducting business in the Autonomous Okrug. through Chukotka Mining and Geological Company JSC and Severnoye Zoloto LLC, developing the Kupol deposits (in 2016 production amounted to 10,7 tons of gold) and Dvoinoe (10,5 tons of gold), respectively. The Karalveem mine (1,3 tons of gold) is being developed by the international Auramine Resources Ltd., and the Valunistoye deposit (about 0,9 tons of gold) is being developed by the Millhouse Group.

China has not played an active role so far, but it has interest in the reserves of Far Eastern precious metals. With the participation of Chinese capital, projects were launched in the Magadan Region. Specialists of Tonhua Minban conduct geological exploration on the deposit of antimony and silver Morning, silver and gold Senon and Serebryanye, in the southeast part of the Burkhalinsky ore field, and also the Kegali mine. The company "Tian He" received a license for geological exploration and extraction of silver, zinc, copper and other metals on the Kunarevskaya prospective area.

Note that at the moment, through the Ministry for the Development of the Russian Far East, the federal budget of the Russian Federation subsidizes infrastructure costs for several gold mining projects in the Far East. For the construction of an access road to the Ozernovsky GOK in Kamchatka, which is being developed by the Siberian Mining and Metallurgical Alliance, it is planned to provide the investor with a subsidy of 758,4 million rubles. 220 billion rubles have been reserved for the construction of a 5,49 kV power transmission line Fevralskaya - Rudnaya in the Amur Region for the gold mining facilities of OOO TEMI. For the construction of a 220 kV transmission line "Ust-Omchug - Omchak Novaya" for the Natalka gold deposit - 9,94 billion rubles. Also, an agreement on subsidizing infrastructure projects in the Oymyakonsky region for 978 million rubles was signed with PJSC Vysochaishy (GV Gold) - the group is building Taryn GOK.

Published in the bulletin "The Economy of the Far East"
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