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WORLD GOLD COUNCIL
Thursday, November 15, 2001
NEWS RELEASE
Vital role of gold mining in the economies
of Central Asia and Russia highlighted by new report.
LONDON: Thursday, 15 November 2001 - Gold mining will have an increasingly
important role in the development of some former Soviet republics and
several of them, especially those in Central Asia, have the potential
to become some of the world's largest producers.
The Kyrgyz Republic, the Russian Federation and Uzbekistan are already
among the world's top twenty gold producing countries with gold accounting
for over a third of the Kyrgyz Republic's exports and 6% of Uzbekistan's.
There is substantial potential for further increases in gold production
in these three countries and also in Kazakhstan and Tajikistan, it is
reported in a new study published in London today by the World Gold Council
on the eve of an important conference in Berlin on Challenges for Europe:
the Euro, the Dollar and Gold organised by the Council.
Extractive industries already play a major role in several economies
in central Asia, often accounting for 30-50% of total output. Some of
these countries are among the poorest in the world with annual GDP per
head under $500. Realising the potential of their natural resources including
gold is crucial to their further development.
New mine development in central Asia has often been held back by the
lack of foreign investment. Foreign investors have been reluctant to commit
funds for new mining developments in these countries because of an unfavourable
business climate, economic and political difficulties and in some cases
the remote and harsh environment where many gold deposits are located,
it is said in the report. Efforts are now being made to improve the business
environment and more realistic privatisation rules are being implemented
but a number of gold mining developments were stopped when the price of
gold fell in the late 1990s.
Russia, which is currently the world's sixth largest gold producer, has
the potential to double its output over the next five years to around
300 tonnes a year. Russia has more than 1,000 tonnes of gold in low grade
resources in Siberia and Russian geologists have identified deposits in
the Far East economic region which are estimated to contain around 650
tonnes of gold. Political issues have delayed development of the Siberian
deposits, but the authorities in the Far East region have been more successful
in concluding deals with foreign investors and several new mines are now
in production or about to start.
The study entitled "Golden Road - the importance of gold mining
in the CIS and Eastern Europe" is the fourth in a series of studies
commissioned by the World Gold Council into the importance of gold mining
to different areas of the world. The countries covered in the report produced
285 tonnes of gold in 2000, equal to 11% of world. The three previous
studies looked at the situation in sub-Saharan Africa and the Heavily
Indebted Poor Countries, gold's importance to countries in Latin America,
and to countries in the Far East.
This latest report was prepared by Dr Mina Toksoz, an international economist
with wide experience of Emerging Europe and the Middle East from her work
at the Economist Intelligence Unit between 1985 and 1997 and, more recently,
in the London banking and securities industry. In this report Dr Toksoz
focuses on the Balkan states of Bulgaria, Romania and Yugoslavia, Russia
and Central Asia. She reviews current gold mining activities in each of
the countries studied, indicates their potential for new production and
outlines reasons why development has been slow to start in many countries,
ten years after the break-up of the Soviet Union.
Ends
Enquiries to:
Jill Leyland, Senior Economic Adviser, +44 (0) 20 7766 2709
E-mail: jill.leyland@wgclon.gold.org
Keith Irons, Bankside Consultants, London 020 7444 4155 / 07885 356 639
 There
is a pdf file available of the "Golden Road - the importance of gold
mining in the CIS and Eastern Europe" which is availabale here
or can be e-mailed on request from Lorna Corrie at Bankside Consultants
- lorna.corrie@bankside.com
A hard copy of the report can be obtained from the World Gold Council
at 45 Pall Mall, London, SW1Y 5JG Telephone: 020 7930 5171
A Glittering Future? - The
importance of gold mining to sub-Saharan Africa and the Heavily Indebted
Poor Countries (June 1999)
The New El Dorado - The importance
of gold mining to Latin America ( March 2001)
Burning Bright - The importance
of gold mining to the Asia-Pacific region (September 2001)
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