Russia’s oil and gold reserves close to exhaustion
Russia’s economic gold reserves will be exhausted in 2011, Natural Resources Minister Yury Trutnev said at a
government meeting. According to Mr Trutnev, commercially exploitable reserves of some minerals are close to
exhaustion. In particular, he said the country’s exploitable reserves of oil, uranium, copper and vein gold
would be exhausted in 2015.
"At first glance, this date does not raise concern," he said. At the same time, the Minister noted that "if there is a pause in the replacement of mineral reserves, we would be unable to overcome a deficit of mineral resources later", due to the specifics of geological preparation of deposits.
At its meeting, the Russian Cabinet approved in principle a long term program for the examination of Russia’s
mineral resources and their replacement. According to the document, annual allocations for mineral replacement will
rise to RUR 16.5 bn by 2010, and to RUR 20.5 bn -- by 2012.
According to Mr Trutnev, this will ensure balance between consumption and replacement of mineral resources. Private investments in the mineral sector will not decline, the Minister stressed, as the government carried out pre-market development of deposits.
For his part, Deputy Prime Minister Alexander Zhukov noted that the funding of precious metal exploration should be
considered separately. According to him, there is a "significant imbalance" in the funding of precious metal
exploration compared with other mineral resources.
At the same time, gold and platinum played a smaller role in the country’s economy compared to raw materials, Mr Zhukov said. In view of this, he suggested cutting spending on precious metal exploration from RUR 42.3 bn to RUR 20 bn a year.
Cabinet ministers also discussed who should carry out strategic exploration. In the opinion of Alexander Belyakov,
Chairman of the State Duma Committee for Natural Resources, this right should be reserved for the government. He said
private companies were not interested in reporting the actual size of deposits.
"Businesses will report the actual amount of reserves at the second stage; at the first stage, they will report lower figures," Mr Belyakov said. If the government reserves the right to carry out strategic exploration, it will be aware of the actual amount of reserves, according to him. A waiver of this right would be a big mistake, Mr Belyakov added. In his opinion, the government should also reserve the right to control mineral producers.
For his part, Mr Trutnev stressed the importance of protecting investor rights in this sphere.
"Today, state investments are ten times lower compared with private investments," he said. If the government wants to continue this situation, it is necessary to fully protect investor rights.
The mineral sector plays an important role in the Russian economy. In 2003, it accounted for RUR 1.43 tn, or 56 %, of Russia’s federal budget revenues (RUR 2.5 tn). In addition, it makes up 70 % of the country’s exports.