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On Ways to Increase Russia’s Gold Reserves

Recently, some economists have stated that the US dollar will lose its status as the world's most reliable and liquid means of exchange, with gold set to take the place of the American currency. They say this will happen due to the future global financial turmoil, noting that gold prices will then go up sharply. Forpost Press does not know whether this will be the case and does not urge its readers to purchase the precious metal. It is, however, evident that the share of gold in export revenues and its importance as a highly liquid asset will gradually increase.

Russia's annual gold output in 2020 surpassed 300 tonnes, enough to secure a top-3 spot in the list of countries by gold production. Are we able to stay there or even improve our position, though? What role do staff competencies and cooperation with scientists play in achieving this goal? And finally, does the industry embrace the principles of a green economy? Alexey Noskov, Managing Director of Polyus Aldan, agreed to answer these and other questions.

Mr Noskov, in 2020, despite the pandemic, the Kuranakh ore field developed by Polyus Aldan outputted 238,000 ounces of gold. That'sThat's 6% more than in 2019. How did you achieve such figures because the country was living under lockdown conditions for several months?

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The lockdown was a severe challenge for everybody, and Polyus, of course, is no exception. However, we managed to cope with this challenge, among other things, at the expense of mobilising substantial financial resources invested in the regions where we operate. Hospitals in the Aldan district, for example, are actively using ventilators that we bought last year.

Most importantly, we immediately developed strategies that considered various development scenarios, even the most pessimistic ones. So when the town of Aldan was completely blocked off, and we lost about 100 employees who lived there for a month, it was not an insurmountable problem. We were prepared for it to happen and understood how we would act.

Will production continue to rise this year?

No, the plan is to stay at the same level as last year. There are two reasons for this. First, even though our processing volumes are at a high level, the content of the valuable component in the ore is decreasing. And secondly, we are starting the fourth stage of technical re-equipment of the Kuranakh gold mill. We have developed an action plan that does not provide a prolonged suspension of production, but it is not possible to increase the work rate either.

Nevertheless, this particular upgrade will allow us to significantly increase our processing capacity to 7.5 million tonnes of ore annually in the future. During the previous stages of reconstruction, it rose from 4 to 6 million tonnes.

You say that the gold grade of the ore is going down – down to what figure?

Now each tonne of ore, which we supply to the plant, contains 1.2 grams of gold.

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But that's very little. How is it possible to work with such deposits?

If we had nothing but the knowledge from the 00s, we probably wouldn't be developing deposits efficiently nowadays. We use both foreign experience and our own, and we conduct various studies which allow us to maintain extraction at the same level, despite falling grades. Due to cooperation with scientists and the introduction of new technologies, we extract maximum gold even from low-grade ores. Our proven and probable reserves are growing, so working with such deposits is not only possible but necessary.

At our previous meeting, you said that you had increased gold production, among other things, by introducing heap leaching technology. This technology made it possible to recycle waste dumps. In essence, this is the waste from the previous years, which had a minimum content of gold and was previously called waste rock. They are laid out on the specially prepared sloping ground, irrigated, and the precious metal flows together with the solution into special troughs. Is the heap leaching pad developing? What are the production volumes there?

Starting from 2018, we put out 1.5 million tonnes of ore there every year. It has an average gold content of 0.6 grams per tonne, and we extract more than 70% of the valuable component. It is a profitable project, which we aim to develop, of course. Therefore, today we are finishing a feasibility study to increase this heap to 5 million tonnes a year and reach a figure of 10 million within the next five years.

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Naturally, this would not be possible without scientific support. We are working, for example, with the St. Petersburg Mining University, whose scientists have done some significant research for us. They relate to increasing the stability of stacks, increasing their height, and their permeability when irrigated with solutions.

The management of Polyus has repeatedly stated that it understands its responsibility for the environment and the rational use of natural resources. What green projects are you implementing at the facilities of Polyus Aldan?

Polyus, like all large companies, is guided by a severe sustainable development program. And we, locally, are undoubtedly involved in its implementation. As you know, Yakutia was ravaged by extreme fires this year. So to compensate for some of the forest losses, we planted 781 hectares of pine seedlings. Moreover, we involved specialists from Khabarovsk who are engaged professionally in this work. For three years, they will supervise the project and oversee the planting so that the trees can take root. In 2022, we plan to plant about 120 hectares more.

We are also thoroughly engaged in recycling waste: waste oil, metal. We cooperate with Yakutia'sYakutia's enterprises in terms of stocking rivers, and we finance programmes for rearing young fish, especially pelyad. This programme has been running for four years.

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Today, almost all mining companies experience personnel shortages. Is there such a problem in your company? If yes, how are you coping with it?

The personnel shortage is enormous – most graduates of technical & engineering universities never even get employed by industry enterprises. The youth prefer to stay in big cities and work as waiters or anyone else rather than go to Siberia and the Far East, where most of the fields are concentrated. Some are afraid of the harsh climate. Some do not want to take responsibility. The rest – they have no idea how highly demanded they are.

Therefore, managers of mining companies need to pay much more attention to attracting students for internships, stimulating their interest in further employment, and working to popularise the profession in general.

As for our company, we have had some success. If six years ago, only about 15 students from various higher education establishments did an internship at Kuranakh, there are about 130 now. But it is still not enough. It would be good to increase the number of trainees and, equally important, the terms of their stay at the enterprises. At least up to two months a year.

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I am glad that students from St. Petersburg Mining University also come. This year we had 12 students from there, all from different areas of training. The guys are earnest and interested. There was even a precedent when one of the girls decided to change her field of study to heap leaching. It is essential for me.

If we don't deal with students today, we won't have anyone to work for us tomorrow. We need not only to carry out programmes aimed at improving performance "here and now", but also to educate promising young people and show them that there are powerful, strong businesses in Russia that are as good as those abroad. Otherwise, the future performance of mining and the implementation of green concepts will not be as impressive as we would all like it to be.