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Unacceptable to have gold ore processed abroad - Putin (Part 3)(Interfax News Agency Via Thomson Dialog NewsEdge)MOSCOW. Jan 31 (Interfax) - It is unacceptable to have gold ore processed abroad, Russian President Vladimir Putin said at a press conference in the Kremlin. "There are things that I consider to be unacceptable for us, and shipping gold ore abroad to be processed is one of them. We see neither taxes nor gold here. This can't happen," Putin said. "Everything else will be carried out in keeping with the understandings reached and the instructions set down at the meeting in Magadan," he said. Some Russian and foreign companies have aired plans to ship concentrate to Kazakhstan and other countries, but they are not doing so in practice. Ore mined at the Dukat field was processed this way in Soviet times, though. Putin chaired a meeting on the gold industry's development in Magadan in November. Then he called for fiscal measures to make mining gold fields in remote areas more appealing, and for lowering taxes for members of the public wishing to invest in gold. He also called for increasing the weighting of gold in the country's gold and currency reserves. The Russian government has, in fulfillment of Putin's instructions, set deadlines for agencies to draft reports on measures to stimulate gold production and the domestic gold market, a source in the government's administration told Interfax. The source said Russian Prime Minister Mikhail Fradkov had signed the instruction. The agencies have until February 15 to present a report on measures aimed at stimulating exploratory work to discover new gold fields. They also have until February 15 to present a report on the expediency of exempting the sale of gold ingots to members of the public from VAT and lifting restrictions that keep them from possessing such precious metals. By May 15, agencies must submit a report on setting up transport and energy infrastructure in Siberia and the Far East to stimulate the development of mineral deposits with funding from the federal budget, regional budgets and private investors. The actual measures attached to the first two aspects of the gold market must be drafted by March 1, and the government is due to resolve the infrastructure problem by June 1. In addition, the Central Bank has been given until April 1 to consider a possible increase in the share of gold in the country's gold and Forex reserves, including by acquiring gold on the domestic precious metals market. One of the Russian gold industry's senior executives said he agreed with Putin's stance on not letting gold ore be processed abroad. "We back the head of state's position and consider the necessity to use Russian technology to process ore on Russian territory to beabsolutely right," Vitaly Nesis, general director of Polymetal, Russia's biggest silver producer and second biggest gold producer, told Interfax. Polymetal has invested a lot of money implementing its own unique technology to process concentrate from ore mined at the Dukat andLunnoye fields in the Magadan region. The Dukat ore was processed in Kazakhstan in Soviet times, and the mine's previous owner planned to have it processed in Canada or Japan. But Nesis said that if the task before the industry is to continue to process complex ores, then a radically new approach to concentrates is must be considered. "It should be remembered that this position could slow the development of silver-polymetal fields which also contain lead and zinc down considerably because Russia does not have the necessary metallurgical plants. Deposits like that would have to wait until these plants are built, or the state's position with respect to concentrate will have to be reconsidered," Nesis said. "If concentrate is allowed to be processed abroad [in the CIS] then duties could be charged in order to top the Russian budget up [offset the lost taxes]," Nesis said. "Mineral extraction tax is charged on the metal in ore anyway," he said. |