Russia’s huge gold industry is searching for new ways to sell its metal, such as exporting more to China and the Middle East, as sanctions choke off its traditional sales routes.
The second-biggest bullion miner is finding European and U.S. markets largely closed because of a ban on newly produced Russian gold, and some refineries are refusing to remelt old bars. The country’s miners have typically sold to a few -- mostly state-run -- local banks such as VTB Bank PJSC and Bank Otkritie, which then export the metal, or until recent years to the central bank.
But sanctions mean that selling to those banks is now not an option, and although the Bank of Russia said it will start purchasing gold again after a two-year pause, it isn’t expected to buy as much as it used to.
That’s left Russia’s gold sector wondering how to sell the roughly 340 tons it mines each year that’s worth about $20 billion. There aren’t many non-sanctioned banks that can realistically handle such volumes. And while the government granted miners general export licenses two years ago that allow them to export directly, few have used the process so far because they’ve preferred to rely on banks’ sales infrastructure.
