26 Jan 2023 09:55

Russian gold market might be more attractive than global market in 2023 - Polymetal CEO

MOSCOW. Jan 26 (Interfax) - The Russian gold market might turn out to be more attractive in 2023 than international markets, the CEO of gold and silver miner Polymetal , Vitaly Nesis said.

"Actually, considering the latest changes in Russia, domestic sales look increasingly attractive. First of all, domestic demand for bars surged in the second half of last year after the elimination of the VAT on gold for retail investors. Retail sales of bars grew from 5 tonnes in the fourth quarter of 2021 to 45 tonnes in the fourth quarter of 2022. This crushed discounts on the domestic market compared to exports," Nesis said at his company's Investor Day.

Secondly, the new statutory structure of the National Welfare Fund (NWF) allows for investing up to 40% of funds in gold, he said.

Most of Polymetal's exports last year went to Asia. Polymetal CFO said in an interview with Interfax earlier that exports "turned out well" with the Middle East and India, and there were also shipments to East Asia, but a smaller share.

Sales have now slowed as usual, because refineries in Russia and Kazakhstan are doing scheduled inventories, and the company is reassessing its options in terms of sales channels, Nesis said.

"For now we're sitting quietly and will continue to for another few weeks in order to see what the dynamic will be on the domestic market. And it might turn out that the domestic market in 2023 will be considerably more attractive compared to international ones," Nesis said.

Polymetal, Russia's largest silver producer and one of the country's biggest gold miners, has operations in Magadan and Sverdlovsk regions, Khabarovsk Territory, Chukotka, Yakutia and Kazakhstan. Polymetal's largest shareholder is the ICT Group of Alexander Nesis and his partners with about 24%.