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. Last Updated: 07/27/2016

Russian Gold Production May Slump

VIENNA -- Russian gold mines could see output slump by as much as 50 percent over the next five years if they do not attract new investment, a senior industry official said Wednesday.

Viktor Gritsaev, deputy chairman of Roskomdragnet, the Committee for Precious Metals and Precious Stones, told a conference that producers were struggling during an economic crisis.

"Given the actual mining, geological and ecological conditions encountered in mining gold, by the year 2000 Russia will be able to sustain barely half the present output," Gritsaev said.

Russian gold output slipped to 132.17 tons last year from 142.6 tons in 1994, he said, although Russia has the third largest proven gold reserves in the world after South Africa and the United States.

Gritsaev traced the downturn to increased energy and equipment costs, lack of funding and high tax levels.

He said the industry was pinning its hopes on federal proposals aimed at increasing output over the next five years.

"The main thrust of this program involves an accelerated exploitation of the most efficient gold ore deposits," Gritsaev said.

About $5.5 billion in investments, not including the Sukhoi log field in Irkutsk, would come mainly from enterprises' own resources, share sales and foreign cash injections, he said.