Government approves a bill on gold mining by individuals
© RIA Novosti. Evgeny Epanchintsev

Government approves a bill on gold mining by individuals

The Russian Government has approved a bill on gold mining ("free delivery"), which will allow individuals to mine gold, and it will soon be submitted to the State Duma. Thus, gold mining by individuals will be allowed in the first three years after the law is passed in the Far East and the Arctic, and later in other regions of the country.

The bill also includes amendments to the Russian Tax Code relating to VAT payments, not by miners but by gold purchasers, and a personal income tax exemption for individuals who mine less than one kilogram of gold within the income tax reporting period.

Now in Russia, only legal entities, which have received a permit to use mineral resources under an auction or tender are allowed to mine gold. The bill on free gold delivery was prepared by the Ministry for the Development of the Russian Far East and Arctic on presidential instructions. The new program will be launched on a three-year pilot basis in the Far Eastern and Arctic regions, and then throughout Russia.

Thanks to the initiative, residents in the Far East and the Arctic will be able to register as individual entrepreneurs through a specially created online system, and receive a prospecting area for free use based on an application submitted to the local authorized body. The land, not to exceed ten hectares, will be issued for three years with the possibility of extending it for another three years by agreement of the parties.

The bill also stipulates a number of restrictions for individual miners:

·        A gold miner can work only one plot, remove a layer of soil up to five metres and may not employ more than 10 hired workers;

·        The maximum amount of gold mined during the whole period of entrepreneurial activity on the plot cannot exceed 30 kg;

·        Blasting operations, the use of polluting or environmentally hazardous substances, the use of chemical methods of gold mining or equipment with power exceeding 5 kW (with the exception of vehicles weighing up to 3,500 kg) are not allowed on the plot;

·        The site cannot be located in territories with deposits of precious stones;

·        Miners will be required to keep accounts of their activities "with site photography and video recording," to submit declarations on this activity and on  restoration of a site.

According to the explanatory note in the bill, the positive effect for the regional budgets is estimated at 15.1 billion to 29.99 billion rubles cumulatively over three years. Legalization of prospecting activity could help create over 10,000 new jobs, says the note. According to the Union of Miners, there are 247 placer gold mining enterprises in Russia, each producing less than 30 kilograms a year. Their cumulative production is two tons per year, and the total placer deposits in Russia have been producing about 82 tons of gold per year over the past three years.