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Gold mining to be renewed

26.09.2011 | kyivweekly.com.ua

Ukraine is planning to renew mining of its own gold this year. The coast of production of gold extracted in Ukraine is expected not to be higher than UAH 150 per gram. Taking into account that the current market price of a gram of gold of 9999 purity in a bar costs around UAH 460, this guarantees a profit margin of more than 200%, reported the official website of Ukraines State Geology Service.

The industrial extraction of gold will be launched in two regions western Ukraine (the Muzhiyev deposit) and in the Kirovohrad oblast. According to the State Geology Service, Ukraine has about 2.5-3 thousand tons of gold deposits. This is a field in the Carpathian Mountains (reserves estimated at 400 tons), the Donbas (500 tones), the resources in the Kirovohrad, Dnipropetrovsk oblasts and Crimea. That´s a lot, considering that the world´s largest gold miner, China, produces annually more than 340 tones (in bars), Russia - up to 180 tons. At the moment, the National Bank of Ukraine gold reserves are estimated at 20 tons

This year the value of gold global markets shot up by approximately 40% to UAH 400/gram. According to Director of the State Geology Service Eduard Stavytskiy, Ukraine imports approximately 5 tones of gold a year. An own extraction of gold would allow cutting the import of this commodity by a third. However, Ukraine will hardly be able to reach the extraction volumes to 1 t/year sooner than in 3 or 5 years.

In the 1990s Ukraine attempted to set gold mining in the Muzhiyev deposit in the Zakarpattya oblast. In 1999, the first standard of 400 ounces of (12.44 kg) bars or ingots was cast. A total of 840 kg of commodity gold were extracted, but in 2003 extraction was curtailed as a gram of gold was more expensive than the cost of its extraction. But over 8 years the price of gold soared 8-fold, hence its extraction once again became profitable. In the opinions of experts, the projected coast of production at UAH 150/g is highly understated as this is in truth the production cost of gold sand that yet must be refined and turned into ingots.

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