Russian gold output is expected to fall 2-4 percent this year, the third consecutive year of decline, as open-pit placer deposits are becoming depleted, the head of the country's main industry lobby said on Monday.
"The picture in 2007 will be the same as in 2006, unless the government takes measures to support gold production from placers," Valery Braiko, head of the Russian Gold Industrialists' Union, told Reuters.
He said six deputies of the State Duma, the lower house of parliament, had sent a proposal to Russian Prime Minister Mikhail Fradkov requesting support, including tax breaks, for placer gold miners.
"Now everything depends on Fradkov. We expect a negative answer, although we still hope for a better outcome," he said. Mining in Russia of placer gold - gold found in alluvial deposits close to the surface - is traditionally carried out by dozens of independent mining teams and has yielded more gold than the country's underground mines. Russia's gold mining reserves are second only to South Africa's, although the country ranked sixth in the world in terms of output in 2005.
Russian gold output fell 2.2 percent to 164.32 tonnes in 2006, due mainly to lower output from placer deposits, data supplied by the union showed. Braiko said placer miners last year produced 9.6 tonnes less gold than in 2005.
The country's leading gold-mining firms have pledged millions of dollars in investment to increase output in the long term by bringing large, undeveloped deposits into production. Polyus Gold, Russia's largest gold miner, has said it plans capital expenditure of $3.4 billion by 2015 with the aim of more than tripling annual output.
Other major miners include Polymetal, which plans to float shares next month, and Peter Hambro Mining, which aims to quadruple output by 2009. Data released by Russia's Finance Ministry on January 16 showed gold output fell 1.5 percent to 165.6 tonnes, a slightly higher total than that supplied by the industrialists' union.
Most Russian gold is mined in the country's east. Krasnoyarsk in eastern Siberia was the country's largest gold-mining region last year, followed by the far eastern regions of Magadan, Yakutia and Khabarovsk, union data showed.
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