Corporate & Operational Footprint 

Gold Mining in Russia

Russia is the largest official purchaser of gold in the world and the third largest producer.

Russian Mining Regulations

The Group’s operations in Russia are regulated by a number of laws relating to mining operations, precious metals, quality standards, industrial safety, environmental regulation and other matters.

The Russian Federal Agency for Subsoil Use (“Rosnedra”) is the principal authority responsible for regulating the activities of the Russian mining sector.

Federal Law No. 41-FZ on Precious Metals and Gems, dated 26 March 1998, as amended (the “Precious Metals Law”), the Russian Subsoil Law and the regulations issued under those laws are the main legal acts which establish the licensing regime in Russia for the use of subsoil for geological research, exploration and production of mineral resources, particularly gold.

The extraction, production and refining of precious metals are subject to specific regulations set forth in the Precious Metals Law. As a general rule, a company which extracts ores that contain precious metals has title to those precious metals. Russian companies may buy or sell ores and concentrate which contain precious metals provided that they are registered with the Russian State Assay Chamber.

Companies which extract precious metals are required to offer refined precious metals, as well as nuggets and precious metals which qualify as “unique”, on a priority basis to the relevant governmental authorities, which may use their pre-emptive rights if they have notified such companies of their intention to purchase previous metals within a month since the date of the relevant offer to purchase refined precious metals on a priority basis, have entered into agreements for the purchase and sale of precious metals and made an advance payment under those agreements.

Since [2011], the governmental authorities have not acquired any refined metals from the Group on such a priority basis. Refined precious metals which have not been sold to governmental authorities may be sold in the domestic markets, used in internal production and for collateral or exported under a licence obtained from the Russian Ministry of Industry and Trade.

The Group normally sells the gold produced to Russian commercial banks and has not hedged its gold sales.