Russia Seeks New Markets for Its Gold as Sanctions
Post# of 388
(Total Views: 283)
Posted On: 04/08/2022 6:04:09 PM
Russia Seeks New Markets for Its Gold as Sanctions Bite
The gold industry in Russia is looking for new ways to sell this metal, including by exporting more of the precious metal to the Middle East and China.This comes as sanctions restrict its traditional sales routes after the Eastern European country invaded Ukraine in February.
Russia, which is the second-largest gold miner in the world, is finding it hard to sell gold in the United States and European markets, which were closed after a ban on newly produced gold from Russia was imposed. Miners in the country usually sell gold to a number of state-run local banks, including Bank Otkritie and VTB Bank PJSC, which then export the precious metal. However, the imposed sanctions have removed the option to sell gold to these banks.
The Bank of Russia recently revealed that it would begin to buy gold again after a two-year hiatus. Before it stopped buying gold in early 2020, the Russian central bank was the largest sovereign buyer of gold, purchasing almost all of Russia’s mined output. Even so, it isn’t expected to purchase as much gold as it did in the past. Its pledge will, however, absorb a share of the supply that can’t be exported.
While few miners in the country possess general export licenses that allow them to export directly, this is bound to change soon, as both lenders and producers explore sales in the Middle East and Asia. One such producer is Polymetal International Plc, which is considering the use of direct exports, given the sales opportunities to China and the UAE. The company’s spokesman stated that the company had observed a considerable increase in the demand for gold in retail, noting that banks were ready to pay for the precious metal using global benchmark prices, instead of 5,000 rubles.
Other large miners in the country have also begun talks with UAE- and China-based firms. The Bank of Russia is capping the price at which it is willing to purchase gold at 5,000 rubles per gram, which equates to about $1,880 per ounce at the present exchange rate. This figure is lower than the international prices.
Russia mines about 340 tons of gold annually, which is worth roughly $20 billion. These are large volumes that cannot be handled by most nonsanctioned financial institutions. The bank’s planned purchases will help support the sales of gold miners given that the domestic market will not be able to absorb these volumes amid the current export difficulties.
The war in Ukraine hasn’t affected only gold. Uranium prices are also on the rise due to this instability, and the upward price pressures caused by supply concerns are likely to result in better earnings for uranium miners such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) based in North America.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
The gold industry in Russia is looking for new ways to sell this metal, including by exporting more of the precious metal to the Middle East and China.This comes as sanctions restrict its traditional sales routes after the Eastern European country invaded Ukraine in February.
Russia, which is the second-largest gold miner in the world, is finding it hard to sell gold in the United States and European markets, which were closed after a ban on newly produced gold from Russia was imposed. Miners in the country usually sell gold to a number of state-run local banks, including Bank Otkritie and VTB Bank PJSC, which then export the precious metal. However, the imposed sanctions have removed the option to sell gold to these banks.
The Bank of Russia recently revealed that it would begin to buy gold again after a two-year hiatus. Before it stopped buying gold in early 2020, the Russian central bank was the largest sovereign buyer of gold, purchasing almost all of Russia’s mined output. Even so, it isn’t expected to purchase as much gold as it did in the past. Its pledge will, however, absorb a share of the supply that can’t be exported.
While few miners in the country possess general export licenses that allow them to export directly, this is bound to change soon, as both lenders and producers explore sales in the Middle East and Asia. One such producer is Polymetal International Plc, which is considering the use of direct exports, given the sales opportunities to China and the UAE. The company’s spokesman stated that the company had observed a considerable increase in the demand for gold in retail, noting that banks were ready to pay for the precious metal using global benchmark prices, instead of 5,000 rubles.
Other large miners in the country have also begun talks with UAE- and China-based firms. The Bank of Russia is capping the price at which it is willing to purchase gold at 5,000 rubles per gram, which equates to about $1,880 per ounce at the present exchange rate. This figure is lower than the international prices.
Russia mines about 340 tons of gold annually, which is worth roughly $20 billion. These are large volumes that cannot be handled by most nonsanctioned financial institutions. The bank’s planned purchases will help support the sales of gold miners given that the domestic market will not be able to absorb these volumes amid the current export difficulties.
The war in Ukraine hasn’t affected only gold. Uranium prices are also on the rise due to this instability, and the upward price pressures caused by supply concerns are likely to result in better earnings for uranium miners such as Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) based in North America.
NOTE TO INVESTORS: The latest news and updates relating to Energy Fuels Inc. (NYSE American: UUUU) (TSX: EFR) are available in the company’s newsroom at http://ibn.fm/UUUU
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
(0)
(0)