Gold mining in Russia by individuals: the legal framework, whether individuals need a license for gold mining or any other permit to mine legally

The lands of the Russian Federation have a huge gold-bearing potential, which was uncovered more than 200 years ago. Most of the plots have long been under development by specialized gold mining companies. But there are areas that cannot be used for industrial purposes. Such areas were allowed to be cultivated by private individuals, conducting searches gold holdings. 

Is gold mining by private individuals allowed in Russia - historical background on the legalization of mining

Until 2016, Russians were forbidden to mine gold themselves. As early as 2017, a bill was drafted to allow private miners to engage in extraction.

Turning to history, it should be noted that gold mining is considered a medieval craft for the people of Russia, Kazakhstan, Australia, the United States and many other countries. There used to be no prohibitions on prospecting. In the 19th century there were only a few known deposits in Siberia and the Urals. Gold prospectors came to Russia from remote regions to try their luck.

Beginning in 1917, mining by private individuals was forbidden. At that time, only mining enterprises could benefit economically. Since 1954 there was an official law forbidding private prospecting. The prohibition remained in force for another 60 years. There was a temporary repeal of the law from 1992 and lasted until 1998.

The main gold deposits in Russia

There are about 1,000 sites where gold is found throughout the Russian Federation. There are 15 regions allocated for industrial mining. 10 regions do not allow predicting the volume of mined metal. The largest gold deposits in the country are considered to be:

Table: The largest regions of the country in terms of gold production

Why and where individuals were allowed to mine gold

Previously, citizens were not allowed to excavate gold on their own. Now it is allowed, but with a number of restrictions. Individuals are required to obtain a license for such activities, which will allow them to launder metal on territories not exceeding 150 thousand square meters for 5 years. 

Russia has a huge potential for the development of gold mining tourism. In many regions there are mineralogical sites that are not of interest to legal entities in terms of industrial scale gold mining. But they could become a lure for prospectors.

Organization of tours on placesThe main reason for this is that a tourist attraction would mean new jobs and financial profits for the regional budget. While vacationers who bought a tour, would have the opportunity to search, launder gold и другие камни, оплачивая оборудование и лицензии. Кроме того золото и другие металлы и товары для ювелирной промышленности можно купить на ювелирном маркетплейсе Albay.

Of course, such searches are theoretically recreational in nature and would not allow tourists to get rich. Thus, it is possible to profit from small fields and long worked out territories on the example of foreign experience in this direction in Australia, Switzerland, USA and other countries.

Legal regulation of gold mining in Russia

Mining gold in Russia Individuals are regulated by Laws No. 2395-1 "On Subsoil" and No. 41-FZ "On Precious Metals and Precious Stones. The introduced amendments allow obtaining a license to develop small plots of up to 150 thousand square meters for individuals working as individual entrepreneurs. Such activities are allowed for 5 years after receipt of the documents.

Basic requirements for legal private gold mining

• IP registration. People wishing to independently The first one to be engaged in gold mining must obtain the status of an individual entrepreneur;
• obtaining a license. The document gives the right to choose an area of no more than 150 thousand square meters;
• Surface method of gold mining. Miners are forbidden to use heavy equipment, only surface search tools are allowed;
• a ban on blasting operations. Explosives are permitted only in the Far East as a pilot project;
• prohibition to use hired labor. An individual entrepreneur must excavate on his own, without hired employees;
• outside the area of industrial gold mining. Works are carried out only in areas that are not subject to industrial processing. There are such areas in the Magadan Region;
• restrictions on the amount of metal mined. An entrepreneur can extract no more than 10 kg of gold from one plot;
• submerging no more than 5 meters into the ground. This allows you to find only native goldThe gold is either on the surface of the ground or in scattered gold.

What is the threat of illegal mining

In Russia, approximately 10% of gold is mined by "black treasure hunters", and that is only by those identified. At the legislative level, such activities are prohibited and punishable. Any actions of "black miners" fall under Article 191 of the Criminal Code of the Russian Federation. Conducting work without permits entails a fine of 5,000 rubles with confiscation of the mined gold and tools.

Penalty for mining gold worth more than one million rubles

If gold mining in Russia by private individuals is carried out in the amount of 1 million 500 thousand rubles, the offender faces imprisonment and penalties. According to the law, trafficking, transportation, purchase and sale of precious metals on a particularly large scale is punishable:

• forced labor;
• imprisonment for 5 years and a fine of up to 500 thousand rubles;
• withholding of wages for 3 years.

If the offense is committed by a group of persons, a fine of 1 million rubles or imprisonment for up to 7 years is applied. Similar sanctions are also foreseen for accidental intrusion into someone else's gold mining site.

The procedure for obtaining an official permit

How to obtain a license to mine gold in an official way:

1. Registration as an individual entrepreneur and an official taxpayer. This requires:
2. application form for registration;
3. A photocopy of your passport.
4. Site selection through Rosnedra agencies. IE sends an application for a free area, and expects an answer within a month;
5. Payment of the state duty for obtaining a license - 7,500 rubles;
6. getting a license for private entrepreneurs through intermediaries. There are legal persons who help you get a license. This option speeds up the process of collecting and completing documentation. The cost of such a service for a sole proprietorship will be 100-200 thousand rubles.

When a license is not required

A gold license may not be required in the following cases:

• purchase or lease of an enterprise with all permits. In this case, a re-evaluation of the geological information about the deposit from state inspectors will be required;
• work by agreement at the dumps of the gold-mining company. Individuals can legally mine the precious metal by entering into an agreement with gold mining companies. Often companies sell for a percentage of the opportunity to develop their subsoil or areas where deposits do not allow commercial mining. But to cooperate with such companies It is difficult enough for newcomers. More often than not, all the "good" plots are taken apart by former employees and companions of the firms. 

Alternative ways of obtaining gold

To mine for gold can be done differently: by mixing the ore with mercury, which interacts with the gold and separates it. This method is called amalgamation. The resulting amalgam is collected and the gold is separated from the alloy.

Another method is. heap leaching. The method involves exposing gold to an aqueous cyanide solution. When the metal dissolves in the liquid, it has to be precipitated with special reagents.

Prospects for the development of private gold mining in Russia

According to the idea of the country's leadership, legalization of mining should bring the "black" market out of the shadows. The country's budget will be able to officially replenish gold reserves and the financial part, thanks to duty payments. At the same time:

• There will be many new jobs;
• earnings of citizens will grow;
• the population will begin to participate more actively in one of the most profitable industries.

Shortcomings of the amendments made to the Russian Law "On Subsoil

The amended law allows entrepreneurs to engage in formal gold mining, but does not allow them to choose the site they like. An individual entrepreneur may carry out such work only on the territory of the Magadan Oblast and using the surface method. However, the gold reserve on the Russian territory is enormous.

Obviously, not everyone accepted the terms of the law, which led to the development of the illegal gold mining market. As a result, the state does not receive additional taxes, about 10% of illegal gold passes by the treasury, and the "black" miners have no social protection.

Non-industrial gold mining in other countries

Australia is considered an example for many countries in the world. There, a gold prospector can get his own permit in a few minutes. Such a license costs only $30. Many tourists try their luck with even a small chance of finding the precious metal.

Question and answer section

How to mine gold legally in Russia?

Dmitry Dovgopolov

Geologist

Individuals are allowed to extract gold reserves from the bowels of the earth with licenses and on plots allocated by Rosnedra agencies. It is mandatory to have the status of an individual entrepreneur.

Why can't we mine gold in Russia?

Dmitry Dovgopolov

Geologist

All gold reserves are the property of the state. This means that extraction of such metal without documentation is tantamount to the ruin of state property. Especially since all minerals obtained in the process of industrial activity replenish the gold reserve of the state budget and cannot be a means of enrichment of individuals.

The cost of a gold mining license?

Dmitry Dovgopolov

Geologist

You can get the permits yourself or through intermediaries. The cost depends directly on the chosen method.

Video: legislation on free-mining of precious metal in Russia: how and where gold can be laundered

Reviews of miners

The private sector is allowed to work in areas where there is no industrial activity. At the same time, the restrictions do not allow to maximize the development of independent search, to fully establish mining. Of course, one does not have to spend money on expensive equipment, obtaining project documents and hired employees, but the resulting income does not always justify the time spent.

IE can mine volumes of gold, which are far from industrial. But the proposed sites do not allow the full development of mining. Those who received a permit can work on waste dumps, handle the waste of mining companies, substandard ore, ore deposits and wash gold sand in the rivers. But this does not allow them to compete with the corporations. As a result, the time and effort spent on processing all the paperwork is not justified financially. 

Lawyer's Commentary

Avanesyan Grisha Karenovich

Lawyer, head of the law firm "Avanesyan and Co.

Ask a question

The amendments to the law allowing private mining are aimed at supporting small businesses in certain regions of the country. Their activities should additionally replenish the treasury with gold. But one should not forget that this law may be the beginning of corruption and banditry. The gold mining industry has always attracted adventurers and swindlers. By legalizing the mining, the state gives a chance to come up with new schemes of enrichment for executives.