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Russian gold mine production rises 3% in first 8 months of 2020

Russian gold mine production rose 3.0% year on year to 184.15 tonnes in the first eight months of 2020, despite the coronavirus pandemic causing significant disruption to operations and logistics.

The overall output of the precious metal sank 7.6% year over year to 214.59 tonnes as byproduct and secondary production plunged, Russia's Ministry of Finance said in an Oct. 2 news release, citing feedstock data from Russian refineries.

Secondary production from scrap plummeted 53.1% to 19.13 tonnes in the first eight months of 2020, down from 40.75 tonnes in the same period of 2019, while the amount of gold produced as a byproduct of other metals sank 10.9% to 11.31 tonnes.

Russia's largest gold producer, PJSC Polyus, held production steady in the first half of the year at 1.3 million ounces even as it battled a major outbreak of the novel coronavirus at its main mine, Olimpiada in Krasnoyarsk Krai.

However, Polyus said in early September that disruption and delays due to the pandemic could weigh on its production as far ahead as 2022.

SNL Image
The Olimpiada mine in Krasnoyarsk Krai accounts for almost half of Polyus' total gold production.
Source: PJSC Polyus

Russian gold production is forecast to decline by 1% to 9.7 Moz in 2020 against a global decline of 2.5% to 103.7 Moz, according to S&P Global Market Intelligence's metals and mining research data.

The country's second-largest gold producer, Polymetal International PLC, raised output by 7% year over year to 642,000 oz in the first half.

Fitch Solutions expects Russia to lead a rebound in mine production of gold over the coming years, spurred on by higher prices and mergers between major firms, according to an August note.

The analytics provider forecast Russian output will rise an average 3.7% per year between 2020 and 2029, from 11.3 Moz to 15.5 Moz. This would see Russia overtake China as the world's largest producer of the precious metal by 2026.

Russia's mine production of silver flagged 7.3% to 284.89 tonnes in the first eight months of 2020, according to the Ministry of Finance. Total silver output fell 6.3% year on year to 594.99 tonnes from January through August as byproduct production remained flat and secondary output dropped 16.3% to 89.18 tonnes.

Polymetal, Russia's top silver producer, produced 9.8 million ounces of silver in the first half of 2020, decreasing 11% year on year primarily due to lower grades.

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