Russia will grant gold miners the right to export amid COVID-19
A decree on April 20 showed that Russia will start granting perpetual licences for miners to export gold instead of one-off rights, to support them in shipping metal overseas independently as demand in its regular trade chain is hit by the coronavirus.
Reuters reported that the COVID-19 outbreak has made it more difficult for Russian commercial banks to export gold as passenger flights have largely been grounded. The banks have traditionally been the primary gold buyers from Russian mines.
“We have spent over a year on this process and we are happy that gold miners will now be entitled to export the metal under general licences,” Sergei Kashuba, the head of Russia’s Gold Industrialists’ Union, a non-government producers’ lobby group, told Reuters.
Domestic demand for gold in Russia has been curbed by the central bank’s decision at the start of the month to suspend its gold purchases from banks.
“We believe that, while the Central Bank has suspended purchases of gold in the domestic market, the presence of general licences will allow gold producers to have greater control over where to sell the metal,” Kashuba added.
An immediate jump in gold exports by gold miners is unlikely, however, as it will take several months to tune up the process. Miners need to find buyers abroad and decide how much precious metal they can offer to them, Kashuba said.
Russian Polyus, Polymetal, Petropavlovsk, GV Gold, Nord Gold and Canada’s Kinross are among the top miners of gold in Russia, the world’s third-largest producer behind China and Australia.
“This step equalizes us in rights with local commercial banks and further improves market infrastructure, which is supportive in an environment of elevated demand for gold on global markets,” Polyus, the largest gold miner in Russia, told Reuters.
It said it was now in talks with several potential buyers abroad and would decide to export the bullion if those buyers offered a better net-back price, which includes delivery costs, than Russian commercial banks at home.