One of the indicators of economic development and financial stability of countries is the volume of gold production or reserves. There are also gold mines in Azerbaijan. The amount of gold produced from those mines varies over certain periods. Current statistics are decreasing.
The State Statistics Committee reports that 2,614 kilograms of gold were produced in Azerbaijan in 2023. These numbers are 17.7 percent less than the indicators of 2022. But what is the reason for the decline in production? Has the production process started in the gold mines in our liberated territories?
This sector is new for Azerbaijan
MP Vugar Bayramov, a member of the Committee on Economic Policy, Industry and Entrepreneurship of the Milli Majlis, said that it is necessary to involve high technologies in order to increase production: “In all cases, we must take into account that this sector is new for Azerbaijan. Therefore, we can regularly observe the change of annual indicators. This is due to the fact that the sector is new and requires more technology.
But we must take into account that our reserves in Zangilan and Kalbajar are quite large. The large reserves of our territories freed from occupation will make it possible to increase gold production. Gold production in Azerbaijan is expected to increase in the coming years. Because it is possible to extract gold more intensively in our territories freed from occupation.”
Beds are planned to be revised
Economist Elmir Safarli said that after increasing our gold production, it will be possible to enter the world stock market: “The production of gold in Azerbaijan mostly falls in Dashkasan, especially in the Karabakh zone. It is intended that in the future, in order to increase gold production in the Karabakh zone, those deposits will be re-examined and the possibilities of resources will be investigated. In the future, the development of gold deposits will be started in the territories freed from occupation. After the launch, the excess production will also increase. After the increase in production, we will be able to meet local demand, and at the same time, it will be possible to carry out activities related to gold in world exchanges.”
The demand for gold is decreasing
According to E. Safarli, production factors and cost are important in the price of gold. But the price of gold is regulated on the world exchange regardless of its cost: “In recent times, increases in the price of gold have been observed. Near the end of 2023, the price of gold on the world exchange reached its peak. We may even see the $2,000 threshold in the first quarter of 2024. Of course, as the price rises, the demand for gold also decreases. As the price rises, people use gold only for investment purposes. Due to the decrease in demand, the production of gold also decreases.
Will it affect the jewelry industry?
Togrul Abbasguliyev, chairman of the Azerbaijan Jewelers’ Association, noted that the decrease in production will not affect the jewelry sector because it is impossible to obtain raw gold from producers: “Yes, compared to the previous period, gold production has decreased relatively. There are certain objective reasons that affect this. But the decrease in production is not expected to have a serious impact on the production of jewelry. Because not much raw gold is obtained from local producers. Therefore, the decrease in production cannot be considered as a serious factor affecting the jewelry industry.
Jewelry will become more expensive
According to the chairman, the price of crude gold, which was previously at a maximum of 62 dollars per gram, has now risen to 66 dollars: “Production does not affect the increase in prices. If there is an increase in the stock price of precious metals, then there may be an increase in prices. Today we observe the increase in prices. The price of one gram of 999 carat gold is around 65-66 dollars. However, it was around 58-60 dollars for a long time. In some cases, it went up to $62. But for the last few months, it has been stable at 65-66 dollars. This will play a role in increasing the price of jewelry.”
Regarding the issue, “AzerGold” JSC reported that there is no problem in their gold production. In 2023, the company produced 63.7 thousand ounces of gold. This is the highest annual indicator during the period of activity of “AzerGold”: “Thus, gold production exceeded the plan by 2%, and silver production by 6%. Compared to 2022, gold production in 2023 was 1.7 thousand ounces or 3 % increase was registered”. (Kaspi newspaper)
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