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Silver bars pile up Russia's Polymetal as it seeks export routes

Kitco News

June 23 (Reuters) - Silver bars have piled up at Russia's Polymetal as it seeks new export destinations to replace Europe, it said on Thursday, adding the bullion accounts for 5% of its annual sales.

Polymetal has not been directly targeted by Western sanctions imposed on Moscow after it sent thousands of troops into Ukraine on Feb. 24.

But in common with other Russian commodity producers it has suffered an impact as Western banks and shippers have reduced dealing with Russian companies even if they are not legally bound by sanctions law.

"Silver bullion inventory continues to accumulate absent reliable export channels and a non-existent domestic market. Discussions are under way with a variety of commercial and industrial international buyers," Polymetal said in a statement.

The company's sales of gold bullion and concentrate from Kazakhstan continue as usual and sales of gold bullion and concentrates from Russia to Asia have returned to regular schedules after a significant COVID-related slowdown in April-May, it said.

The logistics challenges have slowed inventory turnover and inflated selling costs for Polymetal, the miner said, adding it expected the gap between its production and sales to peak in September.

A strong rouble, which is near a seven-year high versus the U.S. dollar - following capital controls and a sharp drop in imports of goods - and logistical challenges have increased Polymetal's capital expenditure, the miner said.

Polymetal said it is on track to produce 1.7 million troy ounces of gold equivalent, a mix of gold and other metals, in 2022.

It does not sell any of its products to the Russian central bank, directly or indirectly, it added.

(Reporting by Reuters; Editing by David Goodman and Barbara Lewis)
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