Russia reportedly is poised to double gold extraction and become the world's second biggest producer
Major Russian gold mining companies are planning to almost double production, according to RT, a Russian international television network and website funded by the Russian government.
Russia is third in the global rating of gold miners after Australia and China.
However, that could change in less than a decade, according to Mikhail Leskov, deputy CEO at the Moscow-based Institute of Geotechnology, as quoted by Vedomosti, a Russian-language business daily published in Moscow.
In 2017, Russia extracted 8.8 million ounces, accounting for 8.3 percent of total global production, according to data by the UK consultancy Metals Focus, as quoted by the media. The newly discovered gold deposits will reportedly allow miners to increase extraction by half in seven years. By 2030, extraction is expected to grow by nearly eight million ounces.
The Russian gold mining industry has almost doubled its volume of extraction over the last two decades. The country’s producers mined 2,189 tons of gold over the last 10 years, according to the Russian Union of Gold Producers.
Meanwhile, the price of the precious metal is expected to rise into next year amid a weakening dollar, experts told Bloomberg.
The precious metal will start to rebound in the final quarter of this year to average $1,375 an ounce in the last three months of next year and could touch a high of $1,400, Bart Melek, global head of commodity strategy at TD Securities in Toronto, told Bloomberg. That’s a level last seen in 2013.
“As time moves on, there’ll be less and less reasons to get into the U.S. dollar, which will likely reverse some of the flows,” said Melek. “We do ultimately think that as we move into 2019, the U.S. dollar will weaken, which is a very powerful fuel for the gold complex.”
Prices are seen averaging $1,290 in the third quarter and $1,300 in the final three months of 2018, he said.
Nicholas Frappell, global general manager at Sydney-based ABC Bullion. agrees and predicts the precious metal will end the year quite firmly,
“Looking forward, the conditions for the gold market look more positive as the dollar rally becomes more stale and fiscal factors start to erode the dollar’s strength,” he said, also adding that the tightening cycle may be coming to an end next year.
(Newsmax wire services contributed to this report).
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