A ship carrying nine people and 700 tons of gold ore has become missing in stormy seas off Russia’s Pacific Coast.
A distress signal went out from the ship on October 28, 2012 as it was sailing from the coastal town of Neran to Feklistov Island in the Sea of Okhotsk. Feklistova Island lies about 20 km to the west of Bolshoy Shantar Island, and is covered with taiga forest. Sea of Okhotsk is named after Okhotsk, the first Russian settlement in the Far East.
In the winter, navigation on the Sea of Okhotsk becomes impossible at times because of the formation of ice flows. A large amount of freshwater from the Amur River lowers the salinity, which in turn lowers the freezing point of the sea.
The ship, hired by mining company Polymetal, had on board 700 tons of gold ore from a deposit. The vessel was transferring the gold ore to a place to process. Gold ore is the substance from which gold is extracted and has only a small percentage of the expensive metal.
Polymetal is a Russian company. It recently posted high quarterly gold equivalent production. A Polymetal’s spokesman did not let the press know an estimated the value of the cargo on the vessel.
The company stated it shipped gold ore with the route previously, and there was nothing unusual in shipping it by the sea this time. In its third quarter 2012 report, Polymetal announced sales ahead of production.
Besides gold, the company deals with silver. For the third quarter, its product in silver was significant, representing a reduction in inventory and contributing to stronger operating cash flows. Silver is a precious metal with unique properties including anti-bacterial qualities and corrosion resistance. Silver is often used in jewelry and photography.
The company’s operates in a competitive precious metals market where no single producer has a significant influence over selling prices. There is complexity in mining and processing of ores as the resources become depleted worldwide. The largest portion of gold supplied into the market comes from mine production. Success depends on the ability to increase the resource base and production, while maintaining control of capital spending and operations costs.
The main uses of gold are for jewelry and bullion investment. Gold has unique metallic properties such as resistance to corrosion, electrical and thermal conductivity, heat reflectivity, and low toxicity. Besides jewelry, gold is used in manufacturing coins and electronic components in medicine, and governmental sectors supply gold through central banks in hedging or forward selling of gold activities.