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Kazakh Central bank to buy all locally mined gold

Wednesday 24 August 2011

ALMATY (MarketWatch) – The National Bank of Kazakhstan said Tuesday it will exercise its right to buy all locally produced gold to replenish its reserves, a move expected to reduce the mineral-rich Central Asian country’s gold exports.

The central bank’s statement, which was e-mailed to reporters but not posted on its website, said the bank would exercise its pre-emptive right to gold purchases “in full”, but it didn’t say gold exports would cease. The statement was released late in the day, and no spokesman could immediately be reached.

Central banks are expanding their gold reserves for the first time in a generation as bullion rises for an 11th consecutive year, the longest winning streak since at least 1920, as investors seek to diversify their holdings away from equities and some currencies. Venezuelan President Hugo Chavez last week ordered the central bank to repatriate US$11 billion of gold reserves held in developed nations’ institutions.

Kazakhstan’s gold holdings were valued at $3.5 billion at the end of last month and accounted for about 9.5% of the nation’s gross international reserves, central bank data show.

Kazakhstan ranked 20th in world gold production in 2010, with output of 26.9 tons, compared with 2,688.9 tons worldwide, according to GFMS.

Large gold producers in Kazakhstan include Polyus Gold International Ltd. (POLG.LN), Kazzinc, a copper, gold and zinc producer owned by commodities titan Glencore International PLC (GLEN.LN), and Kazakhmys PLC (KAZ.LN), to name a few of the largest producers.

Kazakhstan boosted its gold output to 18.832 tons of gold in the first half of 2011, according to state statistics.

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