After reaching record gold production in 2013, Russia will likely see a 5% drop in gold output this year as miners hit the breaks on high-cost operations.
Russia's output of the yellow metal rose by 12.6% year on year in 2013, Reuters reported. Total gold production – including output from mining, scrap and smelting of other metals – was 254 tonnes; this is 14 tonnes higher than what the Russian Gold Industrialists' Union had expected.
But according to the Union head who spoke with Reuters, the country's gold miners are slowing down production due to low gold prices.
Following a 28% gold price drop in 2013, producers have postponed or sold off more costly projects.
"The miners were mining at the highest possible cost because the gold price was going up and when it stopped going up, they had to reduce that," Peter Hambro, Petropavlovsk chairman, told Reuters last month. "So that means that they will mine less gold,"
One of the biggest contributors to 2014's anticipated output drop will be the delayed launch of Natalka – a mined planned by Russia's biggest gold producer, Polyus Gold (LSE:PGIL).
Natalka was supposed to begin operations in the summer of 2014 but this has been delayed by one year.
Russian miners Petropavlovsk (LSE:POG) and Nord Gold (LSE:NORD) announced in January that they would reduce costs and cut production.
Petropavlovsk reported a 2014 output target of 625,000 ounces of gold – compared with 741,200 ounces produced in 2013.
Nord Gold is forecasting between 870,000 and 920,000 ounces of gold production for the year. The company produced 924,400 ounces in 2013.