FACTS ‘N’ FIGURES — Gold output from East to rise in ’98

In 1998, net gold exports from the Commonwealth of Independent States (CIS), China, Vietnam and North Korea could increase by 8.3% to 13 million oz., according to a report by CPM Group of New York, N.Y. However these projections may prove to be conservative, given the recent introduction of new regulations on gold exports in Russia.

In July 1997, Russian President Boris Yeltsin signed a decree to end the government’s monopoly of gold and silver exports. Starting Oct. 1, 1997, licensed commercial banks were allowed to export both gold and silver to the international market. The action is in line with the government’s plan to deregulate the precious metals markets, though it is still too early to determine how the new regulations will affect Russia’s gold export levels.

In 1996, net gold exports from the CIS, China, Vietnam and North Korea climbed 4.5% to 11.5 million oz. according to CPM’s Gold Survey 1997. For the current year, exports are expected to increase by 4.3% to 12 million oz.

Last year, gold output from the CIS totalled 7.9 million oz., down 5.5% from 8.4 million oz. in 1995. Lower production from Russia, Uzbekistan, Kazakstan, Armenia, Georgia and Tajikistan all contributed to the decline.

Only Kyrgyzstan reported a rise in production.

o Russia — Russia accounted for an estimated 4.3 million oz., or 54.1%, of total CIS production in 1996. The bulk of the country’s gold is mined from primary deposits; the rest is produced as a byproduct of copper and lead mining. In 1996, primary gold production fell 8.4% to 3.9 million oz., while byproduct output declined 4.6% to 371,000 oz. Combined total gold production in 1996 was 8.1% lower than the 4.7 million oz. produced in 1995. There are indications that Russian output could rise at least 1.5-2% in 1997 as a result of the startup of operations at the Kubaka mine, in the Magadan region.

o Uzbekistan — The second-largest gold-producing country in the CIS yielded about 2.6 million oz. in 1996, down 2,000 oz. from the previous year. Most of this output came from primary gold deposits. In 1996, output at these mines was estimated at 2.5 million oz.; gold mined as a byproduct of copper and lead totalled 100,000 oz.

o Kazakstan — Gold output in this former Soviet republic fell 12% to 818,000 oz. in 1996, marked by a 19.4% drop in primary gold production to 473,000 oz. Gold produced as a byproduct of copper rose 2.6% to 200,000 oz., whereas byproduct lead output increased 2% to 145,000 oz. The current year could see the beginning of a rebound, resulting from the scheduled startup of a gold-silver-copper tailings project. Also, production at the 12.3-million-oz. Vasilkovskoye deposit will be expanded in 1998.

o Kyrgyzstan — Gold in Kyrgyzstan is produced only from primary operations.

Total output in 1996 reached 175,000 oz., up 32.6% from 1995. At the start of 1996, the state registry listed 28 primary gold deposits and five byproduct deposits. Production from the Kumtor mine may reach 400,000 oz.

this year.

* China — Chinese gold output continued to grow in 1996. CPM Group estimates that the country produced 4.7 million oz. gold last year, up 9.4% from 4.3 million oz. in 1995. Figures released by the Chinese government show that primary mine output rose to 3.9 million oz. in 1996, an increase of 14.8% from the 3.4 million oz. produced in the previous year. (These figures exclude byproduct gold; nor do they reflect the significant amount of Chinese gold that is sold on the black market.)

* Vietnam — Most of Vietnam’s gold is mined from artisanal operations that are scattered across the country’s eight goldfields. In 1996, the country produced an estimated 134,250 oz., up 7.4% from the previous year’s 125,000 oz.

* North Korea — The North Korean government still regards information on gold production a state secret, though CPM Group estimates the country produced 160,000 oz. in 1996, chiefly from both primary and byproduct lead and zinc mining operations.