Russia will start granting perpetual licences for miners to export gold instead of one-off rights, a decree showed on Monday, to support them in shipping metal overseas independently as demand in its regular trade chain is hit by the coronavirus.
Russian commercial banks, usually the main gold buyers from miners, have found it more difficult to export gold as the virus outbreak has grounded passenger flights.
“We have spent over a year on this process and we are happy that gold miners will now be entitled to export the metal under general licences,” Sergei Kashuba, the head of Russia’s Gold Industrialists’ Union, a non-government producers’ lobby group, told Reuters.
Russian banks have said that domestic demand for gold has also been curbed by the central bank’s decision at the start of the month to suspend its gold purchases from banks.
“We believe that, while the Central Bank has suspended purchases of gold in the domestic market, the presence of general licences will allow gold producers to have greater control over where to sell the metal,” Kashuba added.
An immediate jump in gold exports by gold miners is unlikely, however, as it will take several month to tune up the process. Miners need to find buyers abroad and decide how much precious metal they can offer to them, Kashuba said.
Russian Polyus, Polymetal, Petropavlovsk , GV Gold, Nord Gold and Canada’s Kinross are among the top miners of gold in Russia, the world’s third-largest producer behind China and Australia.
“This step equalizes us in rights with local commercial banks and further improves market infrastructure, which is supportive in an environment of elevated demand for gold on global markets,” Polyus, the largest gold miner in Russia, told Reuters.
It said it was now in talks with several potential buyers abroad and would decide to export the bullion if those buyers offered a better net-back price, which includes delivery costs, than Russian commercial banks at home.
(Reporting by Polina Devitt and Darya Korsunskaya; Editing by Edmund Blair and Alex Richardson)