The possibility has been made real by a new law on prospecting activities, which is currently under consideration in the Russian State Duma. The experiment of combining tourism with “voluntary contribution” (private gold mining) will begin in the Magadan region. The regional authorities want to introduce “prospecting tourism” not only to improve the tourist image of the Kolyma region, but also to have a positive impact on the region’s economy as a whole. Could Kolyma become the new “Klondike of the people” and how does this model apply to other gold-rich regions in Russia? – Read more in our article.
The initiative was timed to coincide with the first reading in the State Duma of the law on the individual extraction of precious metals, which will allow for the private mining of gold. Discussions on this issue date back to President Medvedev’s time: a special draft law was prepared at that time, but it never passed parliamentary readings.
Nevertheless, recently, Alexander Basansky, the head of the “Arbat” mining concern, suggested to Vladimir Putin to legalize the work of prospectors and bring their relations with the state into the legal realm. Following the discussion, the president approved the businessman’s initiative. Afterwards, things went smoothly – according to Yuri Trutnev, Plenipotentiary Representative of the President of the Far Eastern Federal District, the law is expected to come into force by March next year. However, the draft law still needs to be brought into line with other legal norms, in particular the provisions of the Administrative and Criminal Codes, as market participants have pointed out.
Russia still maintains Article 191 of the Criminal Code, “Illegal circulation of amber, jade or other semi-precious stones, precious metals, precious stones or pearls”,
– points out Alexey Vyazovsky, vice-president of “Golden Payment”. Amendments to this article are needed, he suggests, along with the creation of private or state purchasing agencies to which mined gold can be legally submitted.
That’s something authentic
The idea of combining tourism with the private extraction of precious metals has been in the air for a long time. Experience from other countries, where tourists mine their own gold, leaving the host country with significantly more currency than the value of the gold mined – serves as additional confirmation.
And the economic model here is quite simple. Companies are allocated plots of land where industrial gold mining is unprofitable, but the rock still contains a small amount of precious metal that can be extracted through individual effort. The main source of income then becomes the tourist infrastructure that needs to be created for the “gold rush” enthusiasts: organizing their leisure time, providing comfortable accommodation, food and security.
– “Since not every claim can be used for industrial purposes, private entities could take them under their wing and engage in their development. Again, this requires a thoughtful approach and, of course, stimulation from the state. But it all depends on the goal set by the authorities,” says Inna Anisimova, general director of the PR Partner agency.
The decision to start developing “golden” tourism in the Magadan region was dictated by several factors. First of all, the image component of the Kolyma Oblast as the Klondike of Russia, where the majority of the country’s gold is currently being mined (51.4 tonnes in 2022).
Secondly, at the local level, the regional administration has long been trying to turn gold mining into a show, regularly holding amateur gold-washing competitions called “Staryatelsky Luck”. For the new initiative, the regional governor, Sergei Nosov, proposed allocating gold-bearing areas where tourist prospecting for the precious metal would take place. According to him, this would make it possible to combine business with pleasure.
– Gold will be mined, and there probably won’t be a shortage of tourists, as many want to experience such intense sensations, – he told to “Interfax” in an interview.
– This attraction could become part of a comprehensive tour, along with sightseeing and ethnic tourism, as well as fishing and getting to know the nature of the Kolyma region, – believes Alexey Cherepakhin, founder and head of the booking service – TVIL.RU. Such an offer could be the final touch that convinces tourists already inclined towards the North to decide to visit the Magadan region.
Russia may allow private gold mining
Photo: Yandex
The route is set
After the head of the region joined the project, the first details of the ‘golden’ routes emerged. Future tour packages will include visits to gold mining complexes in Susuman and Omsukchan, as well as a jewellery factory in Palatka that specialises in making jewellery from nuggets. Furthermore, guests will be introduced to the beauty of the Kolyma region, including Nagayeva bay and Jack London’s lakes, served traditional dishes such as stroganina (sliced frozen fish), yukola (dried and wilted fish or reindeer meat), kilik (grayling soup – a genus of fish of the grayling subfamily of the salmon family) and khelty (dried venison), and taken on a tour of the famous Nuklya cape. Areas for prospecting activities are planned to be allocated in the Susuman Municipality, where almost 1,500 hectares have already been reserved for this project.
– Today, the popularity of Arctic tourism in Russia is growing steadily. According to the Russian holiday accommodation booking service TVIL.RU, in October-December 2023, 2% of bookings were for areas in the Arctic zone. In total, the demand for them increased by 9.5% compared to the previous year, – Alexei Cherepakhin cites statistics.
The authorities have little expectation of mass tourism in the early stages. The focus is mainly on event tourism, where tour packages are tailored to customer requirements or corporate travel. In the second case, the emphasis is on business requests from large companies whose employees come to the Far East region for business purposes.
An essential factor in the popularization of the new initiative should be the fixing the cost of flights on regular routes to Magadan, where the gold tours will begin. Obviously, at some point the host will face the question of state subsidization of passenger transport in this direction – it is the airfare that will be the most expensive part of such trip.
– Even at the startup stage, it is clear that such a package cannot be easily organised: the product is specific and not designed for the masses. It will be a narrow segment of the targeted audience, and to make it grow in volume it will be necessary to promote values that imply interest in industry, history and mining, – suggests marketing expert Yulia Maletskaya of IBC Corporate Travel.
Over the horizon
Nowadays, industrial gold mining takes place in 30 regions of the country, not counting small areas suitable only for prospectors. Some of the mines are located in scenic areas and have the potential to become new tourist attractions. Among the most prospective places, experts mention Altai, Buryatia, Primorye, Khabarovsk Krai and Kamchatka. All these places have areas of alluvial gold, which are ideal for prospecting.
– There are many small gold placers in Russia that are not suitable for large-scale production and generate practically zero income for the state. However, they can be profitable, provide employment for the local population and make a significant contribution to regional budgets. So the idea of extending the “golden initiative” to other regions could work, – agrees Alexey Cherepakhin.
However, the Magadan experience will be crucial to this new venture, as it will show how the romance of the prospector can be adapted to local conditions. An attractive image and emotional appeal are not enough. The future of this project depends on the effectiveness of investment in infrastructure projects, which are necessary to launch this new type of business in the country.
Furthermore, there is the specificity of working in each region, which depends on the climate, the distance from logistics centres and the ability to comply with environmental regulations. The remoteness of these places creates a specific romance, but at the same time makes it difficult to coordinate safety issues and comply with existing standards and laws.