Vedomosti: "The Last to Come"
Alexandra Denisova
The gold-mining sector is asking Vladimir Putin for help.
The Union of Gold Producers and the Union of Gold Prospectors have asked Prime Minister Vladimir Putin to support their sector. The paper has received the text of their December 23 letter. One of their main requests is that the Government differentiate severance-tax rates now totaling 6% for all gold deposits.
Valery Braiko, head of the Union of Gold Producers, said zero severance tax should be charged on all alluvial-gold deposits throughout their entire operation and on all gold-ore deposits during the first and last 3-5 years of their operation.
Otherwise, severance-tax rates should be reduced to 3%; and a minimal 1% tax is envisioned for remote gold deposits.
The Union of Gold Producers also proposed reinstating seasonal loans to companies operating alluvial-gold deposits. Moreover, such loans should be guaranteed by regional budgets. This measure was abolished in 1998, Braiko said. Alluvial-gold producers need target state bank loans with 14-15% interest, rather than 25% interest, he said.
Braiko said alluvial-gold production has been dropping by five tons each year. In 2009, alluvial gold output could drop by as much as 7.5 tonnes, unless the state supports producers, Braiko told the paper. Last year, Russia produced about 50 tonnes of alluvial gold.
Gold producers also want the Government to stop charging value-added tax during the sale of gold bullion to private individuals. This would make it possible to sell 100 metric tons, rather than the current 25-30 metric tons, on the domestic market, said Vitaly Nesis, CEO of Polimetall, Russia's second-largest gold mining company. Russia now produces 160 metric tons of gold.
A spokesman for Polyus Gold, the largest national gold producer, said reduced severance-tax rates on gold producers during the first 3-5 years of operations would ease their financial burden during the repayment of previously borrowed loans.
On December 25, Prime Minister Putin's spokesman did not reply to phone calls. A Finance Ministry spokesperson said no letter had been received. The Union of Gold Prospectors could not be reached for comment either.
The gold-ore industry is only slightly affected by the crisis, Troika Dialog analyst Mikhail Stiskin told the paper. A tonne of gold costs $836, while corporate profitability will be maintained even if gold prices drop to $450-600 per tonne.
