Russian law worries regional gold miners

Gold production in Russia’s Magadan region will drop by 9 tonnes this year as a result of a new precious metals law that restricts contracts between Russian miners and mills, says the regional government’s industry department.

The region’s 107 gold operations say that they will continue to mine and do business with local mills, a move described by Magadan authorities as “illegal entrepreneurial activity.” The law cuts to the heart of gold production in the region, where most development licences are owned by mills and mines are operated by subsidiaries of the mills.

The regional legislature has answered the call of mining lobbyists, and a bill amending Magadan’s precious metals law to permit Magadan’s mills and miners to maintain their former relationship has passed first reading.

The Magadan region, in northeastern Russia, is the country’s largest gold producer, having churned out 26.1 tonnes of the yellow metal in 1997.

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