Russia's largest gold producer, Polyus, announced on Wednesday its plan to suspend dividend payments until 2030. This move is designed to fully concentrate capital and ensure the construction of its major strategic investment projects. The news sent the company's shares tumbling nearly 20% on the Moscow Exchange that day.
Polyus management stated that this decision was made following an in-depth assessment of the current macro market environment. Soaring financing costs, rising production expenses, the retreat in international gold prices, and the uncertainty risks surrounding the construction cycles of major investment projects collectively necessitated this financial strategy adjustment. Data shows that after hitting a historic high of around $5,600 per ounce in late January this year, the international gold price has since retreated by a cumulative 26%, though it remains approximately 75% higher than the price level two years ago.
Market analysis suggests the core intent behind Polyus's dividend policy adjustment is to secure the funding chain for its flagship Sukhoi Log gold mine development project in Siberia, which carries a total investment of $6 billion. This flagship project is now entering the substantive construction phase. According to the company's prior assessments, once this and other expansion projects are fully operational, Polyus's gold output is expected to double. Data from industry consultancy Metals Focus shows that Russia was the world's second-largest gold producer after China in 2025, accounting for about 9% of global mine production. The full-scale production of projects like Sukhoi Log could potentially enable Russia to surpass China as the world's largest gold producer.
As an industry leader, Polyus's financially prudent strategy also indirectly reflects the long-term defensive preparations being made by Russia's gold mining sector under external geopolitical pressure. Since the US, UK, and EU announced bans on imports of Russian gold in 2022, Russia's major gold miners, including Polyus, have been under severe Western sanctions. Previously, benefiting from high gold prices, the company resumed dividend payments in the first nine months of 2024 after a hiatus of over two years and revised its dividend policy in the spring of 2025. Management had already clearly emphasized at that time that if market conditions deteriorated or major projects faced delay risks, the company would firmly prioritize development, placing the funding needs of strategic growth projects above dividend distributions.
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