MOSCOW- After Russia bought more gold than worldwide in 2018, Russian gold mining gives new impetus this year, “offsetting” falling assets in dollars.
In 2018, Russia began to reduce its reliance on dollar-denominated assets by selling virtually most of its US Treasury bonds for decades. At the same time, it began to increase its gold reserves, becoming the largest buyer of precious metal in 2018.
Russian gold production increased over the first nine months of 2019 by almost 11% compared to the previous year, according to data from the Russian Gold Producers Union.
The increase was detected across the entire spectrum of precious metal production, both in gold scrap recycling and in direct and follow-up mining. Direct gold mining alone increased by 9.6% to 213,518 tonnes. The boost in production was mainly driven by existing mills, which increased their production capacity, and by two new companies reaching full operating capacity, the Natalkinsky mining complex and Nordgold’s Gross mine.
In light of this, the Russian Gold Producers Union confirmed its forecast for the global amount of gold to be mined by Russia by the end of 2019, 350 tonnes. Russia produced a total of 330 tons in 2018.
Russia has been increasing its gold reserves lately, mainly through buying gold domestically, becoming the largest buyer of the metal in 2018 and aiming to do it again in 2019. This trend started at about the same time in Russia began selling US Treasuries, reducing its value in US assets from US $92 billion to US $10.07 billion in US debt.
This tendency to reduce the amount of dollar-denominated assets is in line with Vladimir Putin’s warnings that the dollar may lose its dominant position and reserve currency status. The Russian president linked this possibility to a strategy recently adopted by the US authorities to impose unilateral sanctions and use the dollar as a political lever to force other countries to bow to Washington’s will.