The gold mining industry in Russia may face a shortage of reserves in the next 10-20 years, according to recent statements, made by Pavel Grachev, CEO of Polyus, one of Russia's largest gold mining companies.
As Grachev told in an interview with Russian RBC business paper, now gold reserves in Russia are estimated at about 7,500-8,000 tons, while the annual output is 330 tons.
“If this trend is not reversed, then on the horizon of 10–20 years the industry may face a structural shortage of the raw material base,” said Grachev. The company's reserves are designed for the next 37 years.
As the general director of Polyus has also said that the rate of renewal of extracted resources over the past few years has fallen from 62% to 30%.
The main reason for this, according to Grachev, is the lack of investment in geological exploration, including due to legislative restrictions. In September, at a meeting between Russian President Vladimir Putin and the moderators of the Eastern Economic Forum (EEF), Grachev proposed a set of measures to stimulate investment without spending from the state. Over the past year, Polyus has increased spending on geological exploration by 30%, to US$85 million, and plans to increase it further.
By: Eugene Gerden