Kinross Opens $750M Chukotka Gold Plant

Canadian miner Kinross Gold launched a new gold processing plant in the Chukotka autonomous district Wednesday, as the remote region prepares to more than triple gold output this year, the regional government said.

The plant will process ore from the Kupol field, owned 75 percent by Kinross and 25 percent by Chukotka, which could make Kinross the second-largest gold miner in Russia after Polyus.

Total investment in Kupol, including exploration, construction of the plant and associated infrastructure, exceeded $750 million, the Chukotka administration said in a statement. It said the plant would produce from 13.8 tons to 14.6 tons of precious metals, mainly gold and silver, this year. It will boost the amount of ore processed daily to 3,000 tons in October from an initial 1,500 tons.

Kinross has said gold production at Kupol would reach 550,000 ounces per year from 2009, or 10.5 percent of the country's 2007 gold output.

Gold prices have hit record highs of over $1,000 per ounce this year, as investors hedge against a weaker dollar and cash in on a commodities boom. Russia produced 169.2 tons in 2007, 6.8 percent of global mined gold output.

Mining is key to boosting the economy in Chukotka, which straddles the Arctic Circle across the Bering Strait from Alaska. Until last week, its governor was billionaire Roman Abramovich, owner of English football club Chelsea.