China funds best bet to stop Russian Goldmine slide

BEIJING: Chinese investors may be one of Russia’s best chances to keep the world’s second-largest gold production from heading into a decline, the head of an industry lobby said.

Russian producers’ spending has dried up since 2012 as gold prices slumped, leaving output almost flat next year and threatening a decline in 2017, Sergey Kashuba, head of the Union of Gold Producers of Russia, said in an interview. Russia can offer high ore grades to China, as the world’s biggest producer and buyer of gold faces rapidly depleting deposits after a jump in output, he said.

CHINESE MONEY

"Chinese money may soon appear in Russian gold mining," he said. "Chinese gold miners have skimmed off the cream at home so today they’re looking at Russia with interest. They recognise ruble devaluation has made mining in Russia more attractive."

The first Chinese acquisitions of gold assets in Russia or creation of joint ventures with local producers is possible next year.