Azerbaijan's gold steps
Along with oil, copper, silver and iron ore, one of the main natural resources of Azerbaijan is gold. Although the country is not referred as to one of the world leaders for its gold reserves, there are a number of unique fields on its territory. In the south-west of the country, there are Gedabey, Gosh, Ordubad Group, Soyudlyu, Gizylbulag and Viadzhnali fields. Gold fields with potential reserves of about 100 tons: native gold field Chovdar in Dashkesan district, placer gold field Bashkend and Kurekchay in Nakhichivan Autonomous Republic.
And therefore, Azerbaijan is interested in world gold prices not less. Stepping around $900 per troy ounce in the beginning of the year, today the world market price of the precious metal confidently moves towards $1,000. Thus, in the period from 2000 to 2009 troy ounce of gold rose in price more than three times (from $300 to $1000).
For Azerbaijan - already the producer and exporter of the metal - the situation is extremely favorable. Because together with the American company R.V.Investment Group Services LTD, which develops Gadabay gold field in the west of the country, this year Azerbaijan already began to export gold to world markets through the European exchanges. The first consignment of gold worth $977 per ounce was sent to world markets through the European exchanges. Exports began with a volume of 1200 - 2000 ounce of gold under the brand of Ayrim, and by the end of 2009 can reach 65,000 ounces (over 2.0 tons). In 2010, the volume will reach 75,000 ounces, a few years later - 100 000.
Reserves of the industrial fields in Azerbaijan are mainly in the form of alluvial gold. It is important to note that the exploitation of alluvial fields is quite perspective in the economic and technological terms. Development of placer gold has several advantages over the development of ore, carried out on large fields: it is possible to get high-grade gold, while avoiding the costs of fragmentation, enrichment and development of technological processes. In addition, electricity consumption is saved. Also production of placer gold is more secure because of the lack of blasting operations.
Experts estimate the amount of necessary investments in the development of placer gold fields approximately in such ratio: 1 ton of metal - $1 million in developed and well explored fields, then the investments will be repaid within one - two years.
Therefore, in the case of a successful combination of circumstances and considering the annual rise in prices of yellow metal, Azerbaijan can to earn good money even if the prices fall. Once again, experts predict that a rise in price of gold is expected in the end of 2009. Gold commentators try to outdo each other gradually in the higher gold price forecasts, which predict a rise to $ 2000 per ounce, and some even suggest that the price in the Dow (Dow Jones index) will come to $3000 per ounce. Peter Hambro, founder and chairman of the Board of Peter Hambro Mining, which produces gold in Russia, also expressed his opinion, who predicts that the price of gold in 2009 will total $1,000 per ounce, and indicate that there are preconditions for growth to the level of $1,500 and even $2,000 per ounce.
Today, in Azerbaijan the volume of total reserves of gold is 500 tons. If to compare Azerbaijan's gold reserves with the global giant gold exporting countries, for instance with Republic of South Africa, where the annual export amounts to some 500 million tons, Azerbaijan's reserves in this respect is rather less. Undoubtedly Azerbaijan will face with the competition of many developing countries in this regard. In today's market there are large producers of gold as Republic of South Africa, USA, Australia, Canada, China and Indonesia, which are steadily increasing production of gold and soon may catch up with major producers - Peru and Uzbekistan.
In this situation, the government directly or indirectly should support and encourage the development of this industry. For example, the situation can be mitigated by lowering the level of duty on the export of gold, which is now 15 percent in Azerbaijan. In Russia, the five-percent export duty on this precious metal, for example, was canceled. With this step, the Government of Azerbaijan would create a equal conditions for exporters. Reducing tariffs will have a positive impact on the gold market in general, because it will help attract the industry of cheap foreign financing, which is especially important for the development of ore fields.