Together with oil, copper, silver and iron ore, one of the main natural resources of Azerbaijan is gold. Although Azerbaijan can not rank amongst the world leaders for the volume of gold reserves, there are a number of unique deposits in the country. In the south-west of the country, there are Gedabey, Gosh, Ordubad group Soyudlyu, Gizilbulag and Vyadjnali. Deposits of gold, with potential reserves of about 100 tons: the indigenous gold deposit Chovdar in Dashkesan region, alluvial gold deposits Bashkend and Kurekchay in the Nakhichivan Autonomous Republic.
Already this season, Azerbaijan will begin to develop gold deposits. There are plans to produce the first gold Gyadabek deposit in the west of the country in co-operation with Anglo Asian Mining Plc, which hold a license to develop the six fields in the south-west of Azerbaijan - Gyadabek, Ordubad, Gosha Bulagi, Gizil Bulagi, Vezhnali and Soyutlu. Another consortium begin may be with Chovdar.
Currently two consortiums - R.V.Investment and Azerbaijan International Mineral Resources Operating Co.Ltd (AIMROC) - develop gold deposits in Azerbaijan.
According to official forecasts, in case of a successful combination of circumstances, in the end of this year, the country will begin exporting gold to the world market. Gold is the risk-free investment instrument. Unlike securities, gold does not burn and does not change in the financial and international crises and wars.
The trust in the precious metals was not ensured by rating agencies, but historic choice of gold as an equivalent value of the economy of the state.
The high interest of investors had positive impact on the gold market. The reason for this is the status of gold as a "life-saving haven" in the times of difficulty, as well as its protective function during inflation. Moreover, there is an opinion that the yellow metal must be qualified in the portfolio of each investor, i.e. part of the funds must always be invested in gold.
Each successful country must have gold reserves. The condition of the gold reserves must be one of the important indicators of the financial situation of the state. The volume of the gold reserves is especially principal for the developing countries.
Today the world market price of precious metal, skipping a record milestone of $900 per troy ounce in the beginning of last year, is now moving steadily higher. Thus, in the period from 2000 to 2008 troy ounce of gold rose three times (from $300 to $900).
Gold commentators try to surplus each other gradually predicting higher gold prices, which are expected to attain $2,000 per ounce in its peak. Some of them even indicate the figure at Доw (Dow Jones index) to reach $3,000 per ounce. Peter Hambro, one of founders and head of Board Director of Peter Hambro Mining, a gold producer in Russia, predicted gold prices to reach $1,000 per ounce in 2009. He said there are preconditions for its increase to $1,500 and even $2,000 per ounce.
At the same time, the existing situation is very favorable for Azerbaijan, a potential producer and exporter of gold, due to market support to gold. This is the cut in production of this precious metal in South Africa, the world second gold producer after China. Breaks in electricity supply in this region in January and February reduced productivity by 17 percent and 28 percent respectively in annual calculation. Given that peak in electricity consumption in South Africa occurs in June and July (it is winter in the southern hemisphere in that period) and deficit in electricity will be hardly overcome by that period, previous volumes will be restored no sooner.
Azerbaijan, along with using industrial gold production, has vast opportunities to launch and develop its non-industrial production.
The point is that Azerbaijan's field reserves are mainly in the form of alluvial gold, while production of alluvial gold has some priorities compared to mining in huge fields: it is possible to obtain gold of high quality, avoiding expenses for cell-division, enrichment and development of technological processes, and save electricity. Furthermore, alluvial gold production is safer due to absence of explosive work.
All these priorities enable to develop successfully the non-industrial gold production, opening new opportunities to increase revenues from this type of activities.
The country possesses large reserves of alluvial gold, which in most cases economically unprofitable for processing with existing industrial technologies. Big gold producing enterprises are not interested in alluvial gold mines with the reserves of less than 100 and even 200 kilograms. They are well aware of the cost of field development. Development of small alluvial gold in small workshops could bring high profits. Even the smallest gold mines with the reserves of less than 50 kilograms and even without reserves could replenish considerably the regional budgets. Profitable technology to develop small fields is well designed abroad, using the alluvial gold with worse peculiarities.
International experience shows that gold price can be increased even by attracting tourists to gold mining. For instance, tourism with gold mining is very popular in the U.S., Australia, Switzerland, and Italy. Tourists pay tremendous funds for an opportunity of autobiographic gold mining. Every tourist brings several thousands of dollars, leave them in the country and in exchange fetches in average 1 gram of gold. In this case even a small field turns out to be profitable and ensures stable transfers to the public budget, new jobs for local people in service field, good commodity turnovers, promotes constructing hotels, roads, and land improvement.