China, Russia mull setting joint gold mining fund

State-owned China National Gold Group and Russia's Far East Development Fund (FEDF) are said to be in negotiations to set up a new investment fund focused on financing gold projects in eastern Russia.

According to Sputnik News, Chinese investors would contribute up to 90% of the funds needed to cover 10% of the project’s estimated cost, with the rest coming from the venture's initiators and lenders.

Deal would allow the Russian fund to move forward with projects that have been stalled due to lack of investment.

Russia’s Far East Development Fund owns nearly half of the country's total gold deposits, as well as 40% of copper and large deposits of rare earths, the article says. The deal would allow the fund to move forward with projects that have been stalled for lack of investment.

China has been looking for opportunities close to home this year. State-backed companies have already invested around $2.4 billion in projects in the Russian Far East, the region’s development Minister Alexander Galushka said this week.

Other Chinese firms, such as state-backed Silk Road Fund — a $40 billion venture that invests along the nation’s ancient trade routes with Central Asia—, are said to be eying gold mining in the region currently up for sale. The latest rumour indicates that Silk Road and China National are evaluating a $2 billion-joint bid for Glencore’s Vasilkovskoye gold mine in Kazakhstan.

China is one of Russia’s most important partners in the Far East and Asia-Pacific.