History of gold mining in the Russian Federation
This is not an innovation in the history of the Russian Federation - from 1992 to 1998, any interested adult citizen of Russia could legally become a prospector, but later the law was revoked, and mining was allowed only to enterprises after receiving the appropriate license.
Even earlier, in Soviet Russia, private gold mining was allowed from October 1921 until 1956. At that time, there were about 120 thousand people as free miners and members of artels, who accounted for up to 50% of the total gold mining volume.
Discussions about the legalization of private gold mining by individuals have been going on for a long time; a corresponding bill has existed since 2010, however, for a long time there was no progress in its adoption and entry into force.
Why was private mining allowed?
Many officials spoke in favor of introducing amendments to the Russian Law “On Subsoil” to legalize gold mining by individuals. Private mining does not promise any problems for the activities of large gold miners, but it will increase budget allocations. Moreover, the shadow turnover from illegal gold mining is huge - presumably about 10% of the entire production of the precious metal worth trillions of rubles.
In addition, with a significant number of deposits, not all of them are profitable in industrial quantities. It’s a different matter for a private owner who does not incur the costs of expensive equipment and related project documentation. For him, the expected income may be quite acceptable.
State income before and after the amendment
According to some forecasts, at the expense of individuals, an increase in gold mining is expected by 3000 kg. annually, but I do not undertake to make assumptions until a bill is presented on the procedure for organizing the purchase of mined metal and setting the price for it at collection points, because this could radically affect the situation.
But if we rely on data from past years, then bringing this activity out of the shadows will certainly provide Russia with an increase in budget revenues through licensing payments and tax deductions. The official volume of precious metal production will also increase.
World gold production and Russia’s role in it
The total volume of gold mined worldwide in 2022 was 3,246.6 tons. The undisputed leader in extracting precious metals from the ground for the eleventh year in a row is China. Its production in 2022 amounted to 426.1 tons. Australia took second place, albeit with a significant margin - its volumes are 295 thousand kg. And Russia closes the top three – 270.7 tons.
Quantity of gold as a political tool
Having your own gold reserves is an economic instrument and does not in itself ensure political independence. Japan serves as a clear example - having the world's second largest gold and foreign exchange reserves, this country is an unconditional satellite of the United States of America, which is not even in the top ten in terms of reserve accumulations.
But there is an opposite example - Germany, which placed its own reserves in the United States and is now a hostage to the situation and an object of outright political blackmail, unable to return gold to its territory, or even conduct an audit of its property.
One conclusion suggests itself - it is not the tool that is important, but the hand of the master who uses it.
Prospects for precious metals mining
As mentioned above, gold is the basis of today's economy. Every year it is valued more and more. The jewelry industry is one of the most profitable areas in business today, and the items and products they provide are a high-status and expensive gift. This has been the case from time immemorial, and even in the age of industrial states and high information technologies, the tradition has retained its relevance. And now, with the adoption of amendments to the law, everyone can try themselves as a gold miner at the amateur level, or pave the way to the top of the most expensive industry in the world.
Punishment for illegal mining
Today, illegal gold mining in Russia leads to administrative liability for an individual, a fine of 5,000 rubles, and confiscation of the mined metal and tools.
If the value of the seized gold is greater than or equal to one million rubles, then the Criminal Code comes into force, providing for punishment in the form of imprisonment for a term of up to three years. Illegal gold mining by a group of persons can result in imprisonment for up to seven years with a fine of 1 to 3 million rubles.
Which organization should I contact?
The Department of Geology of Solid Minerals of the Federal Agency for Subsoil Use (Rosnedra) is in charge of issuing the relevant licenses. To obtain a permit it is not necessary to go to Moscow. The relevant papers can be prepared at any of the organization’s regional offices.
You should also not expect to get a plot of land in a rich deposit; individual entrepreneurs will be allowed to develop:
- Dumps and residual reserves in host rocks;
- Waste from mining companies;
- Inventories subject to write-off and substandard;
- Ore and sand that are not subject to industrial mining.
Reviews from miners
Private owners are allowed to work in areas where there is no industrial activity. At the same time, restrictions do not allow maximum development of independent search and full-fledged production. Of course, you don’t have to spend money on expensive equipment, obtaining project documents and hired employees, but the income received does not always justify the time spent.
Nikita German, Dmitrov
Andrey Panteleev, Krasnodar
An individual entrepreneur can produce volumes of gold that are far from industrial. But the proposed areas do not allow for full development of production. Persons who have received a permit can work on dumps, process waste from mining companies, substandard ore, ore deposits and launder gold dust in rivers. But this does not allow us to compete with corporations. As a result, the time and effort spent on preparing all the documents is not financially justified.
In what cases is it not necessary to obtain a license?
You can do without obtaining a license in two cases:
- Acquisition of an enterprise with already completed paperwork for gold mining;
- Signing a contract agreement with a gold mining organization for the development of areas under its jurisdiction.
For what period is a license issued?
The document gives the right to develop a plot of 15 acres to a depth of no more than 5 meters and extract gold weighing up to 10 kg for five years. After this period expires, the license can be renewed.
Types of license
For JSCs and LLCs, two types of licenses are provided: a gold mining permit for a period of 20 years and deposit development, which includes geological exploration with a validity period of 25 years.
Does the type of permit depend on the gold mining method?
An individual entrepreneur’s permit for the extraction of precious metal gives the right only to artisanal mining of metal in alluvial deposits.
In order to develop a mine using the mine method, or use modern methods of metal extraction, it will be necessary to register an enterprise and attend to obtaining a license for a legal entity. But, whatever the method of gold mining, the license will be the same.
Why and where individuals were allowed to mine gold
Previously, citizens were not allowed to excavate gold on their own. Now this is allowed, but with a number of restrictions. For such activities, individuals are required to obtain a license that will allow metal laundering in areas of no more than 150 thousand square meters. within 5 years.
Russia has enormous potential for the development of gold mining tourism. In many regions there are mineralogical areas that are not of interest to legal entities in terms of industrial scale gold mining. But they could become bait for prospectors.
Organizing tours to places attractive to tourists means the creation of new jobs and financial profit for the regional budget. While vacationers who bought a tour would have the opportunity to search and launder gold and other stones, paying for equipment and licenses.
How to get a license
Even if you have the necessary funds, obtaining a license for such activities is not so easy. Rosnedra announces an auction for the development of strictly defined deposits.
Individuals can also contact Rosnedra and receive one of the sites for development, a full list of which is publicly available. At the moment, there are already about a hundred such sites.
Required documents for individuals and individual entrepreneurs
To obtain a license, you must obtain the status of an individual entrepreneur; for this you will need:
- Application for registration in the prescribed form;
- Copy of the passport;
- Receipt for payment of state duty.
Procedure for obtaining permission
After registering an individual entrepreneur, an individual can submit an application for the corresponding plot. The decision to grant a license is made within 30 days.
Upon receipt of a license, an individual entrepreneur is required to register with the tax office as a payer of mineral extraction tax.
Approximate cost of LDZ
The cost of a license for a non-resident is from 5 billion rubles. The price for domestic companies is lower, but is also expressed in significant numbers, depending on the results of the auction.
Law firms offer intermediary services for obtaining licenses for the extraction of valuable metals, estimating their assistance at 100-200 thousand rubles.
Pitfalls of legislation
It is impossible to choose a plot of land somewhere in the Sverdlovsk region or Karelia. The law applies exclusively to the territory of the Magadan region. Mining by individuals in Russia is allowed only by the surface method without the use of any equipment other than hand tools. The use of hired workers is also prohibited.
How to save money
The main way to avoid additional expenses is to do the paperwork yourself, without resorting to the services of intermediaries. Longer and more troublesome, but cheaper.
For legal entities, a way to reduce costs is to participate in a competition. The state, acting as a customer, puts forward a number of demands, but the absence of tenders allows reducing the costs of organizing gold mining.
Individual gold mining is booming
The cost of the work performed exceeds the cost of the production obtained
Why do private gold miners continue to work despite numerous bans? Firstly, some deposits are completely unsuitable for industrial processing, since relief, economic and geographical conditions render them unprofitable.
The cost of the work performed exceeds the cost of the production obtained. Secondly, there are many mines with a small concentration of valuable raw materials. Thirdly, gold laundering by individual entrepreneurs also has advantages: the low professional level of workers, the use of inexpensive tools. These points greatly simplify the gold mining process.
The new law in favor of private individuals was adopted on the basis of a number of advantages in favor of the state:
- An additional 300 kg of precious metal is expected to be received annually into the budget;
- In the province, gold mining supports small and medium-sized businesses;
- Additional jobs appear;
- The number of residents in sparsely populated regions is growing.
One should not lose sight of the downside: corruption and banditry are increasing, since this industry creates the ground for committing crimes. Only the strictest government control and a clear legal framework can stop all violations of the law.
Main gold mines and deposits in Russia
If the practice of private gold mining gives a positive result, the question will arise about its distribution throughout the country, fortunately, there are plenty of promising places. Most of the richest mines in Russia have been developed for decades, and some deposits have a history of one and a half centuries, but the gold reserves in them show no signs of drying up.
The most famous of them:
- Solovyovsky mine, Amur region;
- Udeysky mine, Krasnoyarsk region;
- Nevyanovsky mine, Ural ridge;
- Gradsky mine, Chelyabinsk region;
- Dambuki field, Amur region;
- Conder, Khabarovsk Territory;
- Altai mine.
Developed fields
There are thousands of places in the Russian Federation where you can find gold. In 15 regions, mining is carried out on an industrial scale. Another 10 regions are characterized by variable gold production volumes. Most of the deposits being developed are secondary (alluvial). In terms of the number of large alluvial gold mines, Russia ranks first in the world.
Stockwork deposits
Such deposits contain excess sulfides and quartz. Gold inclusions look like thin veins, and the gold-bearing layer itself occupies a large area and stretches for tens of kilometers in length. These mines, with a relatively low content of noble metal, are quite suitable for open-pit mining.
Pitfalls of legislation
Whatever the path to permits, experts say that today there is a market for illegal mining of precious metals in Russia. At least 15-20 tons of gold are extracted from the ground every year by small-scale illegal miners.
Previously, the situation was explained by a ban on this type of activity for private entrepreneurs. After the adoption of the law, it became obvious that its conditions did not suit the majority of miners. Gold deposits on Russian territory are enormous.
Today, hundreds of deposits have been discovered throughout the country: from Magadan to the Moscow region. All of them tirelessly attract gold miners who work illegally at their own peril and risk. As a result, the share of gold mined without permission is almost 10% of the total annual volume.
Information on the largest volumes of gold production by region of the country can be seen in the table.
| Region name | Average annual production, tons |
| Krasnoyarsk region | 47600 |
| Amur region | 30600 |
| Chukotka | 24600 |
| Yakutia | 22300 |
| Magadan Region | 21400 |
| Khabarovsk region | 20700 |
The abolition of small artisanal cooperatives occurred during the Soviet Union. For almost 100 years, only large industrial enterprises received the right to develop subsoil. They started talking about a possible change in the situation only after the collapse of the USSR. However, over the past time, the experience of working interaction between the state and miners has been lost. After the adoption of the new law, the federal authorities will only have to restore the broken ties.
How is gold extracted from ore?
Before gold can be extracted from solid rock, the ore must first be crushed. But even after this, the washing method will not provide maximum metal recovery. The most effective will be the use of other methods.
Extraction methods
In addition to panning, gold is also mined using amalgamation - by mixing ore with mercury, which tends to interact with gold and separate it from the rock. After which the resulting amalgam (an alloy of gold and mercury) is collected and gold is separated from the alloy.
Another method is called heap leaching - exposing gold-bearing rock to an aqueous solution of cyanide, after which the precious metal dissolved in the liquid is precipitated using appropriate reagents.
Extraction method
If we take into account all the amendments and conditions for the extraction of gold by individuals, there are not many ways to master it. Namely, an open mining method. Tens, hundreds, thousands of kilograms of rock with gold veins pass through the hands of miners. The ore is crushed and exposed to water - a process of leaching. However, such a process is not the most productive, and even requires a lot of time and effort. Therefore, it can be replaced by amalgamation or heap leaching.
Experience of non-industrial gold mining in other countries
Australia is a positive example - a gold mining license here can be issued in a matter of minutes and will cost only $30. The service is extremely popular, and despite the low probability of finding gold, it attracts a lot of tourists to the country.
Finally, I suggest you watch a video on the topic:
In most gold mining countries, private miners are illegal. However, illegal fishing is widespread. There are no advantages from this - the state receives less taxes, and miners do not have any social protection and cannot count on help in case of accidents, which are quite common when organizing illegal mining using artisanal methods.
Passivity of private gold mining
Reasons that contributed to the passivity of free miners:
- Technical. In the modern technological world, gold is mined primarily during the daily activities of mining and processing plants and individual special machines - dredges. Industrial gold mining is much more efficient; manual labor cannot be compared with machine labor.
- Legal. Even in modern times, the state has for a long time limited the activities of small non-governmental organizations and individuals. Until recent years, the law openly sided with large companies.
