Russia's Klondike? Not yet

Thu Dec 20, 2012 5:46am EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Clara Ferreira-Marques

BODAIBO, Russia Dec 20 (Reuters) - It looks like any one of remote eastern Siberia's low-lying, peat-coloured hills: only the thin trenches that scar Sukhoi Log hint at the work of generations of geologists to measure the riches beneath.

This bleak expanse, uninviting against a steel grey sky, is probably the world's largest virgin gold deposit, with mineral wealth to rival the world's largest, at Grasberg in Indonesia.

Yet it has remained untapped for half a century, held back by its remoteness, state restrictions and, in recent years, a lack of interest on the part of a Moscow government riding the wave of energy profits and holding out for higher gold prices.

"(The government) would love more gold, but they have no time to think about these issues at the top level," said Sergei Guriev, rector of the New Economic School in Moscow.

"At the lower level, people are happy with the status quo."

Soviet geologists surveyed Sukhoi Log intensively in the 1970s yet little came of it. But now the Russian government has stirred long-dormant interest, suggesting it might invite bids to mine the gold. While such talk has come and gone in the past - and no details of any tender have been given - there is new debate on how, and at what cost, the ore might be exploited.

Beyond the future of Sukhoi Log itself, the outcome could be a litmus test for Moscow's willingness to embrace changes some have been lobbying for in the mining sector - whether lifting a bar to foreigners' involvement in strategic assets or simply showing any appetite at all for turning earth into bullion.

For all the gold fever of pioneers who claimed Russia's wild east for the tsars in the 19th century, Sukhoi Log - the name means Dry Gully - remains a symbol of a more recent lack of drive to mine the riches beneath the world's biggest country.   Continued...