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Russia’s largest gold producer Polyus said on Tuesday that the cost of developing the giant Sukhoi Log gold deposit in Siberia had nearly doubled to $6 billion due to Western sanctions.Polyus expects its flagship project in eastern Siberia, due to go into full operation in 2029, to help double its gold output to 6 million ounces by 2030. That would see the company leap to second from fourth in terms of global gold producers, behind only US-based Newmont.“On top of Polyus, we are adding another Polyus,” said Petr Prokuda, Polyus’ vice president for economics, finance and strategy.Polyus expects to produce 2.3-2.8 million ounces of gold at Sukhoi Log each year, with two other new projects set to boost annual production by 600,000-700,000 ounces.Western sanctions have cut many Russian industrial companies’ access to critical equipment and forced them to look to alternative import sources from countries like China.Russia has a 9% share of global gold production, second only to China. All major Russian gold miners, including Polyus, are under Western sanctions and in 2022, the United States, Britain and the European Union banned imports of Russian gold.Polyus has reevaluated its Sukhoi Log plans since 2022 as sanctions started to hit and foreign partners and suppliers left Russia. On Tuesday Polyus said it expected the project’s costs to reach $6 billion from $3.3 billion anticipated previously.Polyus says the Sukhoi Log deposit is the world’s biggest greenfield project in terms of gold reserves, with an estimated 43.5 million ounces.It said on Tuesday that it planned to build two lines of a gold processing plant with total capacity of 34 million tonnes of ore per year at a site in Irkutsk, with a start date in 2028-2029.Gold prices have surged more than 29% this year and are on track for their best annual performance since 2010, driven by central bank interest rate cuts and growing geopolitical tensions.Polyus produced 2.902 million ounces of gold in 2023 and sees 2024 production at 2.75-2.85 million ounces.(By Anastasia Lyrchikova, Lucy Papachristou and Alexander Marrow; Editing by Susan Fenton)

Polyus says sanctions will double cost of Siberian gold deposit

Gold could extend its record run into 2025 as further interest rate cuts from major central banks and the prospect of a weaker dollar will boost demand for the safe-haven asset, Heraeus Precious Metals said on Tuesday.Heraeus expects gold prices to range from $2,450 to $2,950 per ounce in 2025, influenced by continued buying by major central banks, albeit in lesser quantities than in 2024, geopolitical risks in Ukraine and the Middle East.Gold, often used as a safe store of value during times of political and financial uncertainty, tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding the non-yielding asset.“If the Chinese government’s economic stimulus measures boost the economy, China and India could provide a solid basis for gold demand in 2025,” the company said in a report.China’s central bank resumed buying gold for its reserves in November after a six-month pause, official data by the People’s Bank of China (PBOC) showed on Saturday.“With the return of Donald Trump as US president, there is likely to be more uncertainty regarding trade and tariffs, which should also support the gold price,” said Steffen Metzger and Stefan Staubach, who have been leading the precious metals division of Heraeus.Gold has surged more than 29% this year and is on track for its best annual performance since 2010, driven by central bank interest rate cuts and growing geopolitical tensions.Heraeus further noted that industrial demand for silver is expected to surge, propelled by the continued growth in solar photovoltaic demand.The current gold-silver ratio indicates silver’s undervaluation compared to gold, suggesting that silver may outperform gold in late bull markets, with expected prices between $28 and $40 an ounce, the report said. The platinum market is projected to remain in a deficit in 2025, the report said. Despite rising demand from the automotive and industrial sectors, Heraeus anticipates that platinum prices will remain within the $850 to $1,220 per ounce range.However, the report underscores that demand for palladium, which is heavily dependent on the automotive industry, might decline as internal combustion engines lose market share to electric vehicles.This shift could exert downward pressure on palladium prices, with Heraeus projecting a price range of $800 to $1,200 per ounce.(By Anmol Choubey and Brijesh Patel; Editing by Paul Simao)

Gold price could extend record run into 2025, Heraeus says

Russia’s Nornickel, the world’s largest producer of palladium and a major producer of refined nickel, said on Tuesday it sees the global nickel market maintaining a surplus of 150,000 metric tons in 2024-2025.The company said it expects the palladium market to approach balance in 2024 and reach balance in 2025. It said it had revised its previous estimate of the 2024 palladium market deficit, excluding investments, from 900,000 ounces.The market surplus in high-grade nickel was mainly due to the inflow of cathode nickel from China, the company said.Nornickel is not subject to direct Western sanctions, though sanctions against Moscow have prompted some Western producers to avoid buying Russian metal and complicated payments, leading Nornickel to redirect sales to Asia.(By Anastasia Lyrchikova and Lucy Papachristou; Editing by Louise Heavens)

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