Banks are the main gold byuers in Russia

MINEX FORUM | September 6, 2017 | Views: 38

Russia’s top goldproducer Polyus expects its capital expenditure (capex) to decline over the next two years from around $800 million in 2017 as ramp up costs for a new gold mine fall away, CEO Pavel Grachev said.

Polyus, controlled by the family of Russian tycoon Suleiman Kerimov, started commissioning its Natalka mine in the country’s Far East, a project expected to help the firm increase its gold output by a third by 2019, on Tuesday, said with reference to Reuters.

The company’s capex will decline significantly in 2019 compared with 2018 and will also be lower in 2018 than in 2017, Grachev said on the sidelines of the Eastern Economic Forum in Vladivostok.

He declined to give numbers.

Ramping-up construction at Natalka was the main reason for the 73% increase in capex to $322- million in the first half of 2017, the firm has said. In total, Polyus has spent $2.3-billion on the Natalka project.

Grachev also said the recent bail-out of Russia’s Otkritie Bankby Russia’s central bank was unlikely to change Otkritie’s operations in the domestic precious metals market.

Russian gold producers usually sell their product to Russian banks which then sell it to the central bank or export it. The biggest players in this market are Russia’s two largest lenders – Sberbank and VTB.

Otkritie has a significantly smaller share in the gold market, Grachev said, adding Polyus planned to continue working with it.

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