Serbia mining: Foreign companies dominant owners of gold-copper exploration concessions

9. March 2017. / Mining

In Serbia, the richest gold deposits are located in the eastern part of the country, primarily in the vicinity of Bor, Majdanpek, Zajecar and Negotin, but also in the vicinity of Raska and Medvedja.

The so-called Timok Magmatic Complex has been a subject of interest of all the “big players” in the mining industry for a long time, but because of the rich deposits of mineral resources, Serbia is currently “drilled up and down” by many foreign companies.

According to unofficial estimates Serbia owns USD 263 billion in unused mineral resources, out of which it uses only USD 3.7 billion.

Decades of neglect of mining in Serbia and closing the largest number of then successful producers led to systematic lack of plan and funding sources for explorations and exploitation of mineral resources of Serbia, which was used by the foreign companies.

At the same time, large investments are needed for the exploration of mineral resources and therefore the way was opened for foreign companies.

With the Mineral Resources Management Strategy of Serbia in 2011 and the adoption of the Law there was an opportunity to explore mineral resources in Serbia and make the procedure for obtaining exploration permits easer.

Multinational companies in this field have very quickly shown great interest, and the most interested parties were from Canada and America.

Serbia has 250 mining fields where mining activities are conducted and 100 exploration fields where some of the largest mining companies in the world operate. These foreign companies invest USD 10 to 100 million in geological exploration per year.

How gold is interesting to foreign investors is showed by the fact that the company “Life Stone Capital“ from Dubai leased mine Lece, near Medvedja, where only last year gold worth EUR 50 million was excavated.

It is assumed that about 50 foreign companies have been exploring gold deposits in Serbia, but we were not able to find out the precise data on the number of companies and exploration sites where researches are carried out, because despite our several attempts the Ministry of Mining remained unavailable for comment.

RTB Bor annually produces a ton of gold

According to official data, Serbia is ranked on the 59th place in the world when it comes to amount of gold and almost all the gold bars deposited in the National Bank of Serbia were produced in a plant for the production of gold in Serbia, RTB Bor, which annually produces around ton of gold.

RTB Bor General Manager Blagoje Spaskovski points out for Sputnik that the gold produced in RTB stays in Serbia.

“RTB Bor is obliged to offer first all produced amounts of gold to the National Bank of Serbia, and only if they refuse to purchase gold from Bor at exchange price and that never happened so far, we could ask for the special permission for export. Therefore, gold remains in Serbia, and it is a very good decision of the State”, says Spasovski.

According to the latest analysis of the World Gold Council, Serbia with 17 tons of gold bullion, which amounts to nearly five percent of total foreign exchange reserves, is the leading country in the region in the amounts of that precious metal deposited in the vaults of the National Bank. It is followed by Macedonia with 6.8 tons of gold reserves, Slovenia with 3.2 tons and Bosnia and Herzegovina, which has three tons. Albania is on the last place with 1.6 tons of gold, while Croatia and Montenegro are not on the list of top hundred ranked countries.

According to official statistics on the production of precious metals which is kept in Bor since 1938, RTB produced 160 tons of gold until today.

Commenting on the fact that the Serbian legislations enable foreign companies to explore and exploit gold deposits, Spaskovski points out that he is against such decisions and that it would be best if gold remained in Serbia.

“I cannot argue against the applicable regulations, but Bor deposit Cukaru Peki, which was drilled by our forces and RTB Bor initiated it was then sold to a foreign company at very low price. Personally I am not a supporter of giving away gold mines to foreigners. Metals, lead, zinc, copper in my opinion can be given away, but gold should be kept for us.

It should be exploited by our own forces, and gold from primary sources should be exploited by our state companies or private companies and enterprises from Serbia and then be given to the National Bank of Serbia”, assesses Spaskovski.

The largest deposit on the planet in the hands of foreigners

It was recently reported that in the area of  “Cukari Peki” near Bor, Canadian company Nevsun found the largest deposit of gold in the world and that it will begin preparations for the opening of the copper and gold mine by the end of the year.

At a depth of 559 meters, a content of up to 50.3 grams of gold per ton of ore was discovered.

According to a preliminary economic study, the value of deposit near Bor is estimated to – seven billion dollars, while the costs of mine opening are estimated at USD 500 million. In a study in which it is specified that this deposit, at the moment is the world’s richest resource of copper and gold, it was stated as a mitigating fact that the proximity of facilities for ore processing in Mining and Smelting Plant “Bor”, as well as the new, modern smelting plant built within that company, would further contribute to lower rates of extraction and processing of ore from the Cukaru Peki deposit.

It is also stated that from the mine exploitation, Serbia would take five percent of the net income tax for the use of mineral resources, as well as additional 15 percent on behalf of taxes.

According to the announcement that could be heard for the past days, processing of gold in RTB Bor will also be taken over by the foreign companies, in this case, most likely one of the largest Chinese companies from the mining complex, which has been interested for a long time in buying Serbian smelting plant of gold.

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