UPDATE 2-Russia may become No.3 gold miner in 2015 - lobby
Tue, 12th Feb 2013 13:47
* Expects Russia to increase gold output by 5 percent in 2013
* Gold sector set for consolidation - lobby
* Russia to tender Sukhoi Log in coming years
MOSCOW, Feb 12 (Reuters) - Increased output by Russia could see it surpass the United States as the world's third largest gold miner by 2015, Sergei Kashuba, head of the Russian Gold Industrialists' Union, said on Tuesday.
Russia has the world's second largest gold reserves after South Africa, an estimated 10 percent of global reserves, and production is nipping at the heels of China, Australia and the United States.
"If gold prices remain at a high level, gold output in Russia will continue to grow by 4-5 percent per year, which will allow it to become the third largest producer in the world in 2015," Kashuba told a conference in Moscow.
Gold has underperformed other precious metals this year as signs of improved economic recovery have deterred investors who favoured riskier assets such equities and more industrial metals like platinum and palladium.
Gold fell to $1,639 an ounce early on Tuesday, its lowest since Jan. 4, and around 15 percent below its all-time high reached in Sept. 2011.
Russia in 2012 was the fourth largest gold producer with output of 226 tonnes, up 7 percent year on year. Kashuba forecast that output would rise by 5 percent in 2013.
Over the next decade, its gold sector also faces consolidation, Kashuba said.
"During the coming 10 years the consolidation of Russia's five or six (largest) gold mining companies will continue. The process is inevitable, natural," he said.
Speculation has focused on a proposed ownership shake-up at the country's largest precious metal miner Polyus, which could open the door to a possible tie-up with Polymetal , Russia's largest silver miner.
Two Russian billionaires have been shortlisted to buy businessman Mikhail Prokhorov's 38 percent stake in UK-listed Polyus Gold International Plc, worth $4 billion, and the proposed deal is being reviewed by the UK Takeover Panel, sources say.
If approved, a deal could put Russian tycoon Suleiman Kerimov, who owns 40 percent of Polyus, in a position to launch a merger with Polymetal that would create a Russian gold mining national champion.
An industry leader would be a potential contender to develop Russia's largest untapped deposit of the metal, Siberia's Sukhoi Log, as a partner of the government if progress is made in awarding the long-awaited tender.
"We think the government will allow the development of Sukhoi Log and will create a joint venture with a large private gold company for it," Kashuba said.
Sukhoi Log is estimated to contain more than 60 million ounces of gold.
Russia could push ahead with the tender "in the near future", a government official said last year
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