Gold remains the most widely discussed metal due to its prominent role in both the investment and consumer world. Although it is no longer a primary form of currency in developed nations, it continues to have a strong impact on the value of those currencies. Moreover, there is a strong correlation between its value and the strength of currencies trading on foreign exchanges.
Among strategic minerals gold remains one of the most priority and highly liquid raw materials along with fuel and energy resources for Azerbaijan. The country produced 3,605 kg of gold in January to July, up 3.2-fold YoY, according to the State Statistics Committee.
The price of gold, which acts as a “safe haven” every time stocks crash around the world, has shown a rising trend in recent days.
Current gold prices (around $1200-1300) are attractive for the gold mining business, says Anastasia Redko, an analyst with the Russian consulting company Sogra.
Confirmation of this, according to her, is the fact that gold mining companies that calculated their losses last year could improve their financial performance.
“Taking into account the exhaustion and deterioration of the quality of gold reserves, the expert community is getting stronger in opinion that the trend of the global gold mining can be expected to turn around already in 2017 – the growth will be replaced by a moderate reduction, which, of course, will support prices already in the medium term, especially in the long term,” Redko said.
Investing.com portal reported that in the first half of 2017, the value of gold increased only by 8%, from $1,151 to $1,242, while during the first half of 2016 by more than 20%.
Azerbaijan commenced industrial production of gold in July 2009. About 900 fields were registered in Azerbaijan’s state and territorial balance of reserves of mineral resources.
The process of integration of the domestic gold mining business into the world economic processes began in 1997 with the signing of an agreement between Azerbaijan and the R.V. Investment company in the PSA for development of six deposits of gold, silver and copper in the south-west of the country.
This was the first agreement of the PSA type in the non-oil sector of Azerbaijan. However, the first seven years after the signing of the contract, the company did not conduct any work in these fields, explaining its inaction by the fall of world gold prices and, accordingly, unprofitability. The positive trends that began at the end of 2005 on the precious metals market stimulated preparatory work. At the end of May 2009, Anglo Asian Mining PLC, a subsidiary of RV Investment, began commercial production of gold at the Gadabay field.
The gold mining in Azerbaijan is currently being implemented in fields of Gadabay (Anglo-Asian Mining PLC) and Dashkasan (AzerGold) regions.
Given that the country is the producer-exporter of gold, rising prices will bring more money to the state budget. So, in the fourth quarter of 2017 Anglo Asian Mining plans to commence gold production on the Ugur field, which was discovered in 2016. The gold reserves in this field are about 195,000 ounces, according to preliminary data.
The state-owned company AzerGold was established on February 11, 2015. By late 2017, the company plans to have increased the volume of gold and silver mined for export to 160,000 ounces (70,000 ounces of gold, 90,000 ounces of silver). (AzerNews/Ukrainian metal)