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Russia remained the world’s third largest gold producer in 2016 behind China and Australia, data from the Finance Ministry showed on Tuesday.

Russia’s gold mining industry has benefited from strong gold prices, up 8.5% in dollar terms last year, and the impact of domestic currency weakness, hit by a fall in oil prices and Western sanctions over Moscow’s role in Ukrainian crisis.

“(The) weak ruble and relatively low costs have been supporting Russian gold production,” Sergei Kashuba, the head of the Gold Industrialists’ Union, told Reuters.

Russia produced 288.55 t of gold in 2016, down from 289.51 t a year before, the finance ministry said. That included 237.83 t of mined output, versus 234.31 t in 2015.

Russian producers usually sell the bulk of their gold to local banks which the latter then pass to Russia’s central bank, one of the world’s largest holders of bullion, leaving a smaller volume for supply to Asia and Europe.

The central bank added around 200 t of gold to its holdings in 2016 and posted 2% month-on-month increase in January.

The Gold Industrialists’ Union estimates Russian 2016 gold production at 297 t, including gold containing concentrate. It sees 2017 gold output at up to 305 t.

Kashuba told Reuters on Tuesday he expected Russia to remain the world’s third largest gold producer in 2017 as production in Australia is also rising.

Australian gold output hit a 17-year high of 298 t in 2016.

China’s 2016 gold output rose to 453.49 t, the China Gold Association said, adding that China is targeting up to 550 t of annual gold output in 2020.

While GFMS data showed global gold mine production declined last year, Russia has seen rising gold output from deposits and may launch two more in the coming years.

By the end of 2017, the country is expected to commission its large Natalka gold deposit in the east, the main greenfield project of Russia’s largest gold producer Polyus.

In the next three to four year Polyus will also study Sukhoi Log, one of the world’s largest untapped gold deposits, rights for which a Polyus-led joint venture has just won.

Spot gold prices in London have risen 9% so far this year and held steady on Tuesday at around $1,252 an ounce with investors looking towards a speech later in the day by US President Donald Trump.


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