Russia’s largest gold mining company to boost output amid global production drop

Russian gold mining company Polyus is planning to ramp up production over the next two years, as the overall global output of the precious metal has fallen during the Covid-19 pandemic.

The company expects a small drop this year, partly due to an ore-grade decline at some of its Siberian mines, with output recovery in 2022 and 2023.

“The essence of our short-term strategy is providing an increase in production while maintaining costs, paying stable dividends amid just slight capex growth,” Polyus CEO Pavel Grachev said in an interview with Bloomberg.

The company is also planning to open a mine at Sukhoi Log, one of the world’s biggest gold deposits, in east-central Russia in 2027, which has estimated reserves of 540 million tons of ore, containing 40 million troy ounces of gold. The only other large project globally, in Canada, is on a much smaller scale, according to Grachev.

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Polyus is the world’s fourth largest gold miner and the biggest gold producer in Russia, with assets in the Krasnoyarsk, Irkutsk, and Magadan regions, and the Republic of Sakha in Yakutia.

This year, the company switched to hydropower through a contract with RusHydro for 90% of its electricity supply. It is now the only major miner working on 100% renewable power, Grachev said. Polyus also fully dropped the use of diesel fuel at its sites after building 600km of power lines, he added.

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