Factbox: Western ban on Russian gold imports is largely symbolic

Polymetal International PK

27/06/2022 11:46

* This content was produced in Russia where the law
restricts
coverage of Russian military operations in Ukraine

    MOSCOW, June 27 (Reuters) - A move by Britain, the United
States, Japan and Canada to ban new imports of Russian gold is
being seen as largely symbolic within the global gold market as
Russian exports to the West have already dried up.
    Britain said on Sunday the ban was intended to limit
Russia's ability to fund its military operation in Ukraine. 
    It was not clear whether there was a consensus within the
Group of Seven wealthy democracies on the plan, with European
Council President Charles Michel and German Chancellor Olaf
Scholz saying it needed to be discussed further.  urn:newsml:reuters.com:*:nS8N2XQ04Z
    Gold prices were up 0.5% at around $1,835 an ounce on
Monday.  XAU= 
    
    HOW MUCH GOLD DOES RUSSIA PRODUCE?
    Russia is one of the world's largest producers of gold,
along with China and Australia. 
    Last year, it mined 314 tonnes of gold, according to the
Russian finance ministry, accounting for nearly 10% of the metal
dug up globally. That gold is worth around $19 billion at
current prices.  XAU=     
    Polyus  PLZL.MM  is the country's largest gold producer, 
followed by Polymetal  POLYP.L .
    
    WHERE DID RUSSIAN GOLD EXPORTS GO BEFORE THE CONFLICT?
    Russian gold miners mainly sold their gold to Russian
commercial banks, which typically either sold to the Russian
central bank or exported it. 
    In recent years, the vast majority of Russia's gold was sent
to Britain, the world's biggest bullion trade and storage
centre. 
    Britain imported $15.2 billion worth of Russian gold last
year, UK customs data show. From there, it can be re-exported to
other markets. 
    Russia also sent some gold in recent years to countries
including Switzerland, Turkey and Kazakhstan, according to
Russian customs data. 
    
    WHAT HAPPENED AFTER RUSSIA SENT TROOPS INTO UKRAINE?
    Since Feb. 24, Russian gold exports to the West have largely
stopped. 
    Western governments sanctioned Russia's main gold-trading
banks, including VTB, Otkritie, and Sberbank, and many
international banks, refiners and shippers stopped dealing with
Russian bullion.  
    On March 7, the London Bullion Market Association (LBMA)
suspended its accreditation of Russian precious metals refiners,
barring them from selling new production in London.  urn:newsml:reuters.com:*:nL2N2VA1K4
    Britain imported 29 tonnes of gold worth $1.7 billion from
Russia in February, UK customs data on the U.N. Comtrade
database show. In March, the last month for which data was
available, Britain imported just 26 kilograms from Russia. 
    
    WHERE DOES RUSSIAN GOLD GO NOW? 
    Russia's customs service and central bank have suspended
publication of import and export data and information about
state gold holdings. 
    Buyers for Russia's gold now include the country's central
bank, people inside Russia who want a safe investment and buyers
in Asia, where most countries have not sanctioned Russia,
Russian miners, bankers and analysts say.
    " Russia's  gold exports have already been rerouted since
the start of the war, flowing eastwards rather than westwards,
reflecting self-sanctioning from Western world gold market
participants," said Julius Baer analyst Carsten Menke.
    "The implications of a ban on the gold market are likely
very limited," he said. 

 (Reporting by Reuters
Editing by Mark Potter)