The metallurgical process of purifying precious metals from contaminants is called refining. This process is used to obtain pure precious metals of a wide variety of samples for the jewelry industry, the production of bank bullion, and government reserves. Refineries are enterprises with the necessary equipment and technologies, specializing in the processing of industrial semi-finished products, concentrates and alloys in order to extract high-purity precious metals.
Refining of primary raw materials
Refining is carried out using several chemical methods depending on the type of precious metal. Electrolysis, cupellation, reactions of chemical solutions and acids are used. The silver content in the material obtained after refining reaches 99.9%, gold – 99.65%. Raw materials are supplied to refineries from concentration factories, mining and metallurgical and processing plants, and recycling plants. The choice of a refining enterprise by a supplier is purely subjective and mainly depends on the cost of refining, which is not the same for all such industries. The location of the enterprise in this case does not matter.
Export of refined gold
According to the chemical composition, the gold content in the bars must be at least 99.99%. This composition is achieved through the process of refining the metal - separating it from the rock or purifying it from impurities.
The ore that gold mining companies receive varies in composition and its gold content varies. At processing plants, the ore is purified and gold of the highest standard (999.9) is obtained.
According to Russian legislation, it is allowed to export precious metals (including gold) in refined measured and standard bars. It is allowed to export ingots if they are made in Russia.
In cases where bars are manufactured in other countries, a certificate and stamp of the country (of gold origin) is required.
Refined gold bars must meet international quality standards adopted by the LBMA.
Ingots are exported through special customs posts. At customs, all rules of customs clearance and control must be observed.
Recognized refining companies in Russia
Recognized producers of high-purity gold are those Russian refineries that are included in the list of companies of the London Precious Metals Market Association (LBMA). Recognized enterprises authorized to produce high-purity precious metals:
- Krasnoyarsk Non-Ferrous Metals Plant (refinery). The enterprise was built in the early 40s of the twentieth century for the processing of copper and nickel ores of the Norilsk deposit and the refining of platinum metals. Today, this is the only enterprise in the Russian Federation that produces all types of precious metals. Krastsvetmet's raw material base consists of 70% concentrates from the Norilsk plant. The plant's products are certified and meet international standards. The company is listed as a producer of precious metals on the New York, Tokyo and London stock exchanges.
- One of the oldest enterprises in Russia is the Yekaterinburg Non-Ferrous Metals Processing Plant. The plant was built in 1916 for the refining of platinum. Today the plant processes spot gold, alloys and secondary precious metals. The company produces both technical and jewelry products from pure precious metals. Like the Krasnoyarsk plant, EzOCM has an international certificate for its Good Delivery products.
Sales for export
Recently, the volume of purchases of gold by the Central Bank on the Russian domestic market has significantly decreased, and in this situation, export directions have become a priority for gold mining companies and manufacturing plants.
From April 1, 2021, the Central Bank stopped purchasing physical gold, and therefore, already in the same month, the volume of export sales of gold increased significantly and amounted to about 42 tons. The level of export operations has increased several times.
Today, the main volume of purchases of Russian gold comes from the UK, although not so long ago the main exporter of gold bars from Russia was Switzerland. The volume of export purchases was affected by the UK's exit from the European Union.
In addition, the following companies purchase gold bars from the Russian Federation on an ongoing basis:
- Germany;
- Poland;
- Spain;
- Belgium;
- India;
- Hong Kong;
- Italy;
- United Arab Emirates;
- Indonesia;
- United States of America.
Russian producers of pure precious metals
Refineries whose products do not have an international certificate:
- Prioksky Non-Ferrous Metals Plant. The enterprise was put into operation in 1974 in the city of Kasimov, Ryazan region. Until 1991, the plant produced metals and alloys; subsequently it was repurposed to produce gold of the highest standard (99.99) for state reserves.
- The Novosibirsk Refinery is the oldest gold processing plant in Russia. Until 1991, the enterprise was a monopolist in providing state gold reserves (Gokhran) and processed 60% of all mined gold. The plant is famous for its traditions, high production standards and products of the highest quality.
- Shchelkovo secondary precious metals plant. A Moscow region enterprise specializing in the processing of relatively rich secondary raw materials with a gold content of at least 2% and silver of at least 5%. It is worth noting that the quantity of such secondary precious metals (RPM) is quite limited in the commodity market.
- JSC Uralelectromed is an enterprise specializing in the processing of copper concentrates, the so-called “copper gold”. The company, located in the Sverdlovsk region, was previously one of the key suppliers of Gokhran. A large proportion of the raw material structure is secondary alloys based on copper.
- The Kolyma Refinery is one of the newest enterprises, launched in 1998. The main purpose of the plant is the refining of local material.
- The Kyshtym Copper Electrolyte Plant, located in the Chelyabinsk region, produces gold and silver from low-grade scrap.
Export license
In April 2021, the government took the initiative to allow companies producing refined gold and gold mining companies to issue full general licenses for export operations
Previously, gold mining companies and factories involved in refining precious metals were allowed to export gold under one-time permits (licenses), which were issued and tied to a specific agreement with a foreign counterparty. The Ministry of Industry and Trade issued general licenses only to banks after receiving a license from the Central Bank for the relevant operations.
One-time licenses from the Ministry of Industry and Trade were a deterrent to export operations with precious metals, so gold mining companies and manufacturing plants enthusiastically accepted the government’s decision.
This was a necessary and timely step in conditions when the volume of purchases from the Central Bank decreased, and the demand for gold bullion increased in export markets. Domestic gold exporting companies believe that issuing state licenses will free them from unnecessary bureaucratic obstacles and expand export opportunities.
Hand washes hand
For many years, Mikhail Diaghilev, who is significant for the country’s economy, has been in charge. But issues related to the acceptance of raw materials and determining the purchase price for them are resolved directly by the deputy head of refining, Sergei Belov. At the end of last year, an agreement was concluded between Katalizatoroff Group of Companies and the plant for the supply of raw materials containing precious metals. And almost immediately a conflict began to flare up between the parties, according to data from a letter from the holding’s management to Izvestia.
“Currently, our group of companies is faced with facts of outright lawlessness and illegal activities on the part of Deputy General Director of Krastsvetmet OJSC Belov S.V. and employees of Directorate “K” of the SEB FSB of the Russian Federation Serdyukova A.S. and his boss A.I. Burlakov, who illegally organized and carried out general patronage of commercial and other enterprises in this area. For our refusal to work with Belov S.V. according to the “kickback” system by an employee of the Directorate “K” of the SEB FSB of the Russian Federation, A.S. Serdyukov. Over the past year and a half, goods and material assets worth more than 120 million rubles have been confiscated from our group of companies without any clear legal justification. The last raids of Serdyukov A.S. took place in mid-August 2021 in the warehouses of all enterprises included in the Katalizatoroff group, with the participation of special forces officers. The purpose of these illegal actions is obvious to us - to intimidate, paralyze our activities, squeeze out the collection and disposal of used automobile catalysts from the market, and clear the way for suppliers close to S.V. Belov,” the company’s letter to the publication says.
According to the holding’s management, Sergei Belov, together with persons under his control, using his position and the plant’s dominance in the industrial waste market, sets different purchase prices for the same waste for different suppliers. The letter emphasizes that when setting purchase prices there are no clear and transparent conditions, indicators, tariffs depending on the volume of supplies, etc., equal for all suppliers. That is, the procedure for maintaining records and reporting in this area is deliberately not observed or violated.
All this activity, as indicated in the letter, is carried out in the personal interests of S.V. Belov. and for the benefit of related companies. As a result of this intentional and illegal restriction of the range of suppliers by the plant, the amount of waste collected is also reduced. Moreover, from the plant employees, personally subordinate to S.V. Belov, under the threat of stopping waste collection, terminating contracts, reducing purchase prices, illegal demands were repeatedly received for the gratuitous transfer of shares in the business and additional “kickbacks” to them, i.e. illegal return to them of part of the funds in cash received by us from OJSC Krastsvetmet as payment for consumer and industrial waste.
According to the holding's managers, Katalizatoroff's problems began after they refused to fulfill the conditions. OJSC Krastsvetmet tried to unilaterally change the terms of the concluded contract and significantly reduce the rates for the purchase of raw materials, trying to exert additional pressure. In addition, Krastsvetmet OJSC stopped paying for raw materials already shipped to the plant,” the letter says.
Thus, the plant management illegally withheld a large batch of raw materials totaling more than 70 million rubles, delivered to the plant in June and for which the plant never paid. Without explanation, batches processed by the plant in the amount of 41 million rubles are not paid for. As a result, Partner LLC and Progress LLC, members of the group, were forced to appeal to the Arbitration Court of the Krasnoyarsk Territory (copies of the statements of claim are at the disposal of Izvestia), attaching to the claims the necessary documents on the supply of raw materials. The court of first instance has begun considering these cases, and hearings are scheduled for mid-September.
In July of this year, the company was forced to turn to the head of the Federal Antimonopoly Service of Russia, Maxim Shaskolsky (the statement is available to Izvestia). In their complaint, the applicants indicate: “Currently, the management of OJSC Krastsvetmet, under the leadership of Deputy General Director S.V. Belov, who oversees the refining department, has created unequal conditions for paying for raw materials for suppliers; there are regular delays in payment for supplied raw materials to individual suppliers who are not within the circle of interests of S.V. Belov; preferences are provided to individual suppliers close to S.V. Belov.”
