The cost of gold in the world is average. The cost of gold mining in the world and Russia
Gold is one of the most valuable metals, which is famous all over the world and is quite difficult to get. In the Middle Ages, gold was a monetary equivalent, and now many exchange rates are directly dependent on fluctuations in the value of this precious metal.
Despite the fact that the first information about the places of gold mining in Russia appeared in the 5th century, industrial attempts to remove gold from the earth appeared only at the beginning of the 18th century.
Today, two types of gemstone mining are popular: large-scale industry with the construction of combines and gold processing plants; solitary trips to the golden springs.
Due to its size and a huge number of gold sources, Russia has become the 5th state in the ranking of gold mining countries in the world. Russia is in step with the US, China, Germany, Australia and India.
There are several regions where you can stumble upon a golden source absolutely by accident, because almost the entire region is listed in the golden map. So, if you want to go on a trip to search for gold deposits in Russia, then pay attention not to the map and to such territories:
- Magadan;
- Khabarovsk and Krasnoyarsk Territories;
- Sverdlovsk, Amur and Irkutsk regions;
- Republic of Sakha, Buryatia;
- JSC Chukotka.
There are springs everywhere, and precious metals are literally under your feet. When embarking on a profitable journey, take note of a few facts about where and how gold is mined.
The mechanism of organization, how gold is mined in Russia
We have already said that there is a large-scale production. I would like to note that there are not as many gold processing plants throughout Russia as we would like, and most of them are concentrated in the Ural region.
This situation is explained by the fact that this is a very expensive project, which does not always pay off. Unfortunately, our equipment is quite outdated, which leads to unprofitable production. Scientists from research institutes are working on the development of new methods for extracting the yellow metal, but no innovations have been presented.
In such a situation, amateur ways of how gold is mined in Russia are becoming increasingly popular. In order to go in search of gold reserves and not be held legally liable, you need to follow just a few rules:
As you can see, it is necessary to settle only small bureaucratic issues, and you can safely start profitable activities. The second option for mining gold is aimed at much smaller volumes, and, accordingly, the profit will be much less. On the other hand, there are many advantages:
- minimum financial costs for equipment;
- there is no need to hire a large staff of workers;
- fewer permits and other bureaucratic issues are required.
So, let's move on to studying the question of where exactly gold is mined in Russia.
In most cases, gold is found in mountain rivers or sand pits.
Mountain rivers are the most favorite place for gold seekers. If you want, then pay attention to such features of the area:
- the river must begin in a mountain range;
- the total length of the stream should be no more than 15 km .;
- the area should be maximally abstracted from the population;
- not very strong current.
Since gold is many times heavier than water, the current simply pushes it out of the rocks, but does not carry it far. Most often, gold grains or nuggets become littered in soil, sand or pebbles. Fine grains of precious metal create a "golden pit", which catches the eye, being among the gray stones.
Golden sand settles at a depth of up to 5 cm from ground level. Dropping a little deeper (up to 20 cm), you can find small nuggets weighing up to 50 grams. If you dream of 100-200 grams of pure gold, then you will have to dig up to half a meter, which is quite difficult to do, given the peculiarity of mountain rivers.
Sand quarries are rich in golden sand. If you find a nice sheen and reflection in the sand, then this may signal the presence of quartz, which often goes hand in hand with gold.
It will take much longer and more difficult to extract gold from sand, because the probability of stumbling upon a nugget is scanty. On the other hand, it is possible to extract large volumes of gold from the sand, because there is much more of it than in mountain reservoirs.
In any case, knowing about the places of gold mining in Russia, you just need to buy certain equipment, tools, or use the materials at hand (they save the budget, but spend a lot of time).
The cheapest way is to buy a bag and pour sand into it. After opening the bag, allow water to enter it, which will ensure that the existing sand is washed out. Since a grain of gold is 20 times heavier than sand, the metal will remain inside the bag, and the sand will wash away the stream of water. Accordingly, this method is applicable only to search for gold in water.
Plastic patch and sand. The meaning of this method is approximately the same as the first option. The only difference is that you will sift the sand and the golden crumbs will remain in the tray. The method is used in mining quarries, but is ineffective, because ten hours are spent processing at least 1 ton of sand.
. Perhaps one of the most effective ways to help find places where you can get gold. The tool gives signals 20 cm deep into the ground, which helps to find both grains of sand and large stones. In addition, it is possible to set the metal detector so that the instrument reacts exclusively to gold, completely ignoring other metals. A convenient and quick way to view the desired area for gold sources. Of course, the use of this equipment is possible only on land.
Minidrag. A small machine equipped with a hose that delivers water with sand and stones to a bumpy conveyor, where the stones are selected. Unnecessary stones and water roll back into the river.
Mini gateways. Visually, it resembles a fine, strong mesh, which is installed as close as possible to the bottom of the river and the flow of water simply brings sand into the lock.
Perhaps the most effective option is to use a metal detector. Of course, you can mine gold in any of the above ways, if you treat this activity not as a source of income, but as a way of entertainment or a wonderful hobby. Since we have already considered where and how gold is mined, let's pay attention to the financial component of the issue.
Cost of gold mining
Since the gold mining industry belongs to the class of heavy ones, it automatically falls into the classification of costly ones. This wording means that most of the amount from the sold products (jewelry, accessories, piece of furniture, interior or just gold bars) will go to pay off all the costs associated with the extraction of the yellow metal.
Big profits are obtained from those factories and combines where precious stones can be mined using modern innovative technologies.
If we are talking about "amateur mining", then it is difficult to make specific forecasts, since no one can guarantee that you will find at least a gram of gold, and equipment, uniforms will be bought, time spent and staff hired. Mining on your own is beneficial only in those places where there are definitely gold sources.
In 2016, 10% more gold was mined than in the previous period. The cost of production decreased by 19%, which was the result of the introduction of modern technology for processing land, sand and water.
The cost of an ounce of gold on the interbank exchange decreased by 20% (the more gold is mined, the cheaper it is on the exchange), but the pricing policy for finished products from this precious stone increased by 5-7%. Despite the crisis in the economy, the demand for gold jewelry, items or bank bars not only did not decrease, but also increased by almost 30%.
website: Platinum is one of the most expensive precious metals. Historically, the price of platinum has always surpassed the value of gold. At the moment, the price of a troy ounce of gold on the stock exchange averages $1,200, while a troy ounce of platinum costs about $1,160.
That is, there is historical paradox - gold is more expensive than platinum. To what extent is the current situation justified from the point of view of economic analysis and conventional logic?
Why is gold cheaper than platinum?
Sergey Kochergin, EXNESS analyst: The value of a particular metal is determined, among other things, by its rarity and production cost. Platinum is about 15 times rarer than gold. On average, about 200 tons of platinum and more than 2,500 tons of gold are mined per year. To extract one ounce of platinum (31.1 grams), you need to process about ten tons of ore. It takes only three tons to extract the same amount of gold. In terms of exploration and production costs, platinum should be worth more than gold.
It should be taken into account that the costs of producers of platinum and gold in different countries vary greatly. Ore mining and processing technologies, transaction costs (for example, when transporting metal from South Africa to China), and even the exchange rate of the national currency have a significant impact on the cost of precious metals production.
In fact, the platinum market is an oligopolistic market. 90% of this metal is mined by South Africa (the absolute leader) and the Russian Federation. And only 60% of gold production is controlled by about 7 countries (China, Australia, South Africa, USA, Russia, etc.). Due to the greater competition of producers in the gold market, the latter should cost less than platinum. These are supply factors.
China boosts demand for platinum
In terms of demand, gold and platinum are widely used not only in the jewelry industry. More than half of the annual production of platinum is bought for the automotive industry. The growth of the latter indicator, for example in China, causes a greater consumption of platinum in the world. Traditionally, India is in high demand for jewelry during the wedding season, which lasts from about the end of September to January. Thus, there are quite a few nuances that affect the prices of precious metals.
Forecast for gold and platinum prices
We attribute the decline in prices for gold and platinum last week to the reduction of geopolitical risks in relation to Ukraine and Greece, as well as the Chinese New Year (when demand for these metals is low). Currently worth considering purchases of these metals with targets of $1,255 (for gold) and $1,217 (for platinum). will support them. In the next year or two, we expect the spread between the cost of platinum and gold to return to the positive area.
Fortrader Suite 11, Second Floor, Sound & Vision House, Francis Rachel Str. Victoria Victoria, Mahe, Seychelles +7 10 248 2640568On all continents, gold is found in various geological formations., and to varying degrees in various compounds. It is sometimes found in compounds with other metals, especially copper. Much of it is found in the oceans, but for economic reasons it is currently very difficult to extract. Land gold reserves, which are defined as gold reserves used at current prices using modern technology, are more dependent on current prices.
Unfavorable price levels in the second half of the 1990s did not immediately affect production, although its growth was less noticeable than in conditions of stable metal prices. The owners of the mines being developed reacted instantly to changes in prices on the gold market. If the gold is below the acceptable level of the cost of processing, then it can be closed. However, closing costs can also be quite high. Therefore, the best way out for the mines is to exhaust all their resources.
However, much can be done to avoid closure. Mining may be associated with an increase in the quality of the ore and the degree of availability to the reserves. The influence of economic factors can also contribute to cost reduction. according to Gold Fields Mineral Ltd. (GFMS), gold mining costs in Western countries have decreased by an average of 22% (in dollar terms) over the past 2 years. At the same time, this process was also affected by the depreciation of currencies in producing countries against the dollar. The ability to control gold production in the future has also improved the financial performance of mining companies. As a result, their use of such principles only led to a halt in growth in 2000.
Since the level of production depends on prices, it should be noted that this has been observed not so long ago. The unfavorable price conditions of the 1990s, and especially the last four years of the last decade, have only now reduced the rate of decline in production.
Most of the study of the value of gold adheres to the market price, that is, the basic selling price of an ounce of gold or silver (to which is added a margin of intermediaries of a few percent). For an accurate analysis of quotes, it is important to know the costs of mining.
The main reason for this is to evaluate the strength of a given company. Knowing the market price (hence the price for which the ore is sold) and knowing the cost of extracting the metal, one can determine how much a given company remains in profit. If the cost of extraction is close to the market price, its financial results will not be good just because there will be no funds to pay dividends, let alone investments. If extraction costs are, in turn, very low, even a fall in the share price will allow the company to make a profit. It can share profits with investors, make new investments, and so on.
What does this mean for an investor investing directly in bars and coins? In the event of a drop in prices, availability will only be guaranteed by those mines whose cost per ounce of metal will be significantly lower. Currently USA. If it turns out that the price drops to 950 mines, the cost of which will be 1100 ounces, will begin to make losses. And the mines, whose production costs will be well below 950 US dollars, will supply the market with metal.
Types of extraction costs
As with many projects, estimating production costs is not an easy task. In the case of ingot production, this is relatively simple because we are dealing with a sequence of processes: melting, rolling, roasting, polishing, stamping, packaging. Each of these processes consists of payroll deductions and electricity needed to supply devices, supplies and packaging (which costs are easy to determine), losses, storage and transportation.
In the case of mining, things are much more complicated. A mine is not only mining, which is already extremely complex, but also opening a mine and closing it. The opening of the mine covers the costs associated with exploration and other geological activities. Finally, there are permits, concessions and preparations. Once a site has been used, it must be properly mothballed, which also generates costs that cannot always be accurately estimated at the outset.
Since the mid-1990s, gold mining companies have been using so-called cash costs. This measure has been used by the industry, but has also been referred to as GAAP (generally accepted accounting principles), meaning that it has not been formally endorsed for use by the general industry. Norms designated by GAAP or alternatives such as International Financial Reporting Standards (IFRS) are not mandatory. While the first was created primarily for American mines, IFRS was designed for companies around the world.
This in itself creates controversy in the use of uniform cost methods. Generally, GAAP and IFRS measures are not mandatory for everyone, so some mines may use specific measures and others may not. The organizations decided to cooperate in 2002, whereby their indicators, although not identical in methodology, achieved a certain consistency.
In any case, cash valuation has become a popular method and is used by some companies today. However, its shortcomings were so significant that a new methodology had to be introduced.
The introduction of the cost of cash per ounce was aimed at creating transparency and order in the field of reporting related to the activities of companies producing gold and silver. Despite good intentions, the index did not include certain expenses and fixed assets, which in practice affected the company's real financial results. Accounting tricks have even led to the fact that the cost of extracting an ounce of metal (for example, silver) can be ... negative. This was due to the categorization of the nature of mining, in which they looked differently at the production of companies where the main metal was 80% taxation, and otherwise, when the taxation of the main raw material did not exceed this 80%. In general, cash costs are not a satisfying factor on which to base one's desire to make a good investment decision.
AISC method
A new method that corrected the errors of the above appeared in 2013. It was connected with the World Gold Council. Thus, the index covers all operating expenses that form the basis of cash costs (those that are associated with daily work, such as labor costs for people, operation of equipment, royalties, administrative costs, technology costs, transportation costs, etc.). What are the additional factors? These are completely different costs than the current costs directly related to the extraction of minerals. Here we can mention permits and costs related to social responsibility, exploration and research costs, investment costs, restoration and closure of the mine and, finally, remuneration of the board.
AISC is not perfect and can sometimes even be distorted. Why might it be distorted? For example, mining companies want to show the best results and prospects, and since AISC is a job for accountants, fraud is possible. But the indicator itself gives at least an approximate value when it comes to the cost of mining gold.
It's time to get into the numbers, but it's worth noting that not all major mines report and announce their AISC. Some of them still insist on a much lower informational cash outlay.
The cost of extracting an ounce of gold
It makes perfect sense that some mines have lower costs while others have higher costs. It is enough that the gold-bearing capacity of the ore is high and the costs are sharply reduced. Moreover, it is very common for an individual company to have various mines, some of which have higher or lower AISCs.
Summarizing
About a dozen mines associated with the largest gold producers in the world were explored. The total volume of their production is more than 20 percent of the total production. It's a lot.
The remaining mines (there are hundreds of them in the world) certainly do not differ in AISC from the above. Of course, rich ore, good management and low taxes can affect AISC, while ending stocks, poor knowledge or uncomfortable working conditions make it difficult to obtain low production costs. However, there are some common transactions in which the vast majority of mines are in the cost of gold production.
Based on this and other information, it can be assumed that the production of gold has an approximate cost of 550 - 1050 $ / ounce.
This is a fairly wide range. If the amounts quoted reflect reality, gold mines do generate income, many of which are significant. If the market price of gold falls, the supply of gold does not have to decrease. Even if the price of gold falls below $1,000, to $900, for example, a significant portion of the mines will not only continue to produce it, but also earn it.
Gold is a precious metal, the basis of the financial system of all mankind and any individual country at almost all times. That is why gold mining is the most important occupation from ancient times to our time.
Today, gold is mined in Russia by individuals, a license for this type of activity is required. However, this area has undergone many changes.
Gold mining in Russia today and in the past
In our country, it is officially considered that gold mining in Russia by private individuals, finding mines, and the activities of entire corporations have been carried out on an industrial scale since the 18th century. Obviously, small amounts of gold were also mined in previous centuries. And this is no coincidence. Nature has provided Russia with many rich alluvial deposits available for development in almost all parts of the country.
Modern Russia is one of the leaders in gold mining. Gold is found in all parts of the country. Since the Middle Ages, the Urals, Siberia, the Far East, etc. have been famous. There is gold in closer regions, although in smaller volumes - in the Moscow region, the Leningrad region. Gold mining in Russia at the present stage is more than 250 tons per year. According to the results of last year, our country has established itself in one of the leading places in the overall production of precious metals.
Forms of activity of gold miners
The field of activity of active and energetic people has always been vast and varied. Gold mining, although sometimes dangerous, does not necessarily require a high-tech base and large financial resources. Gold mining can be done by individuals, large firms, and government agencies. At the same time, the Russian state either took an active role in gold mining, or gave gold mining in Russia to individuals. At the present stage, corporations such as Kinross Gold, Yuzhuralzoloto OJSC, Severstal OJSC, etc. are mainly involved in gold. Until recently, gold mining in Russia by individuals has been practiced in much smaller volumes.
Passivity of private gold mining
The reasons that contributed to the passivity of free prospectors:
- Technical. In the modern technological world, gold is mined, first of all, in the course of the daily activities of mining and processing plants and individual special machines - dredges. Industrial gold mining is much more efficient, manual labor can not be compared with machine.
- Legal. The state and in the newest period for a long time limited the activities of non-governmental small organizations and individuals. Until recent years, the law was openly on the side of large companies.
Reasons for the continuation of the work of private gold miners
Nevertheless, technical and legal restrictions could not and cannot stop private gold miners. First, not all deposits are suitable for industrial development. Some of them are simply unprofitable - their cost is higher than the cost of production due to relief, geographical and economic conditions. Large enterprises will not be engaged in gold in this case. Gold mining in Russia by individuals in small shares is more relevant than large-scale. There are many deposits with a small concentration of the precious metal, the state not only cannot control them, but sometimes it is not even able to register them. At the beginning of the 21st century, small deposits of gold are being discovered even in regions where gold has never been panned.
Secondly, the laundering of gold by unorganized miners in abandoned deposits undoubtedly highlights the positive aspects: the "web" of automobile routes to mining sites, low demands on the professional level of workers, the potential for using a more primitive, inexpensive tool. There is an officially non-working field in the Amur Territory. Gold prospecting has been going on there for more than a hundred years. However, a large amount of precious metal has been lifted from the ground, so that free prospectors will find something to look for. Gold mining in Russia by individuals in abandoned mines is currently increasing.
The history of private gold mining during the Soviet era
A certain problem is the lack of significant experience in private gold mining. Gold mining in Russia by individuals has not been allowed since 1954. The Stalin era was more free. The state for gold diggers included additional payments, was given the right to develop the richest gold mines. To intensify labor, they distributed housing, vouchers to sanatoriums, etc. Before the Great Patriotic War, every resident of the country over 18 years of age who had not previously received criminal punishment had the right to work as a miner. The number of gold diggers, acting separately or in non-governmental organizations, reached 120 thousand.
The resulting gold was handed over to countless specialized points. Gold mining in Russia at the mines by private individuals, their presence has brought significant benefits. Then the deposits became state-owned. Mostly the precious metal in Russia was obtained in the east: in the Urals, in Siberia, where the Bolsheviks did not immediately find themselves after the revolution. Gold mining enterprises turned out to be in the hands of one political force, then another. The losers, leaving, destroyed the equipment, disabled the mines, and did not allow the workers to function.
Decline of private gold mining during the Civil War
In the era of the Civil War, gold mining was almost completely disabled. If on the eve of the revolution, gold mining in the country decreased, then with the beginning of the civil confrontation, it fell further. In 1918, a total of 30 tons of gold was mined, and on the eve of the war, the total amount was 64 tons per year. There was no private gold mining law (or any other gold mining law).
In subsequent years, gold was received less and less. In 1920, 2.8 tons were mined, and in 1921 - only 2.5 tons. However, during the years of the existence of free miners (1932-1941), the volume of the received precious metal increased several times.
As already noted, in 1954, by decision of the Soviet state, the work of free miners in the extraction of precious metal was prohibited. After the collapse of the USSR, the illegal production of precious metals annually amounted to about 15-20 tons - 10% of the legal volume.
Newest time
In recent decades, some changes in the field of gold mining have nevertheless occurred. Against the backdrop of the ongoing changes at the present stage, it does not look quite logical and understandable, severe restrictions in gold mining. Gold mining in Russia by individuals required a license. Gold mining and its licensing are limited by the federal law "On Subsoil" No. 2395-1, which became part of the effective ones in the first year of the existence of the Russian state, and the federal law "On Precious Metals and Precious Stones" No. 41-FZ, launched in 1998 .
The law on gold mining in Russia by individuals provides that the receipt of gold is realized only by legal entities who have taken a permit (license). The state structure that distributes licenses is the Federal Agency for Subsoil Use - Rosnedra and its organizations in the province. A permit is required for gold mining in Russia by individuals.
Obtaining a license for gold mining
The instruction for obtaining a permit document consists of the following mandatory steps:
- Terrain reconnaissance, the subsoil of which is recommended by the state for sale at an auction or tender (such information is available on the Internet on government websites, all messages are publicly available on the website of Rosnedra and regional offices).
- Submission of a demand for participation in a public auction or tender, obtaining a number of official documents determined by the competitive (auction) conditions.
- The participant who received the first place in the bidding (auction), and win a gold mining license.
As a rule, gold mining in Russia by individuals (a license is needed) is allowed for 20-25 years or for the period of completed gold mining at the mine. The document can be officially recognized from the moment of state registration.
In our country from 1992 to 1998. this precious metal received permission to explore any residents of Russia even without a proper official document of the state structure. Since 1998, free miners have lost many of their rights: they could only work in organizations that took out licenses for gold mining. In particular, gold mining in Russia is now carried out by individuals with a license.
Legislative changes
Only in 2016, Dmitry Medvedev, marking the next stage of liberalization in the field of gold mining, approved amendments to the law "On Subsoil". They concerned gold mining in Russia by individuals (2016 - new edition).
According to this legislative document, from the beginning of 2017, private gold mining in Russia was once again allowed. The law provided for the possibility of renting a land area of 0.15 square meters for a certain period of time. m, which, according to professionals, can produce up to ten kilograms of gold. However, when mining gold, it must be taken into account that there are several requirements:
- it is necessary to obtain metal only by the surface method;
- it is forbidden to use explosives in work;
- you can use a layer of earth up to five meters deep.
Today, gold mining in Russia by private individuals (a license will avoid problems with the law) may result in a fine of several thousand rubles. At the same time, the miner will also be left without a tool purchased specifically for obtaining the precious metal. And if it turns out that the suspect has gold worth more than one million rubles, there is also criminal liability. A similar case applies to the development of a mine, which is the property of a company that mines gold.
Positive aspects of changes in the Law "On Subsoil"
Even taking into account all these facts, many believe that the adopted law has many positive consequences:
- additional revenues to the budget - it is assumed that the government will earn about 300 kg of gold annually;
- good support for strengthening small and medium-sized businesses in provincial areas;
- creation of additional jobs and growth of self-employment of the population;
- growth of inhabitants in settlements of sparsely populated regions.
However, the growth in the number of private miners leads to the danger of increasing corruption and banditry, since this is a very convenient environment for committing crimes. Tight state control and a clear legal framework will be able to stop such a process.
The procedure for the delivery of the mined precious metal will be determined after the legislative and regulatory act is approved at the federal level. Later, on the ground, the authorities will be able to make the necessary changes to the regional legislation.
Finally
With the adoption of the law, Russia can be ranked among the leading countries where not only the industrial production of the precious metal is developed, but gold is also being mined (in Russia, i.e. on the territory) by individuals. The growth of gold mining is possible, but not only because of the large deposits of the precious metal, but also because fresh gold deposits are being steadily explored in Russia, the latest technologies are emerging, and the needs of individual entrepreneurs and small organizations are taken into account.