Author: Paul Ploumis14 Jul 2014 Last updated at 01:28:21 GMT
EDGWARE (Scrap Monster): Gold mining output in Russia rose 21% in the first 5 months of the year according to preliminary data.
Reaching record levels of 254 tonnes in 2013, total gold bullion output rose almost 30% according to Sergei Kashuba, head of the Russian Gold Industrialists' Union, between January and May compared to the same period last year, with recycling included.
Earlier this year, Kashuba said full-year mining output was forecast to end 5% down on 2013.
Annual data from consultancy Thomson Reuters GFMS show that gold mining supply from Russia over the past decade has risen 40%, overtaking the United States in 2013 and making it the third largest producer nation behind China and Australia.
Global mining supply rose 5.7% in Q1 2014 versus Q1 2013, says the consultancy.
Output from former world No.1 South Africa fell last year to 174 tonnes, barely one-third of the 580 tonnes of gold mined in 1994 – then a quarter of global output.
Early 2014's rise in Russian gold mining supply was beaten by a significant rise in gold recyled from secondary sources, says Kashuba. "Gold bar production from scrap more than doubled on the year to 11.8 tonnes," he told the Itar-Tass news agency.
The 5% drop he forecast in February for full-year mine production was due to "postponed projects" which remain unlikely after the sharp price drop of 2013.
Gold price in Dollars lost 28% last year – the biggest annual loss in 32 years. Russia's largest gold miner, Polyus Gold (LON: PGIL), has since delayed the start of Natalka, which has productive potential for 47 tonnes per year. Two other Russian gold miners, Petropavlovsk (LON:POG) and Nord Gold (FRA:RTSD), also plan to cut output in 2014, contributing to the lower annual outlook.
Last week Polyus Gold announced a gold miner hedging program to defend against the risk of further price falls, locking in a price of $1321 per ounce. Petropavlovsk hedged some of its output in March 2013 at a price of $1663 for 12 months – beating the actual price by 25% – and then hedging more at $1403.
Formerly a million-ounce miner, POG's output target for 2014 is now 625,000 ounces – below 20 tonnes of gold, and down 15% from 2013's full-year total.