Security Services Target Major Russian Gold Producer Amidst Environmental and Safety Scandals

Russian security agencies conducted searches at the offices and facilities of Yuzhnouralzoloto (South Ural Gold), the nation’s third-biggest gold producer, as part of an ongoing inquiry into environmental compliance and safety violations, the state-operated TASS news agency reported on Wednesday.

The TASS report stated that officers from the Federal Security Service (FSB) examined the company’s headquarters located in the Chelyabinsk region, as well as its central mining operation and associated entities.

An FSB spokesperson informed TASS that investigators “identified breaches of environmental protection laws and safety protocols.”

They also uncovered the functioning of industrial sites in the Plastovsky and Yetkulsky districts that were responsible for pollution in protected water areas, leading to a «deterioration of environmental conditions.»

Yuzhnouralzoloto, which operates in the Chelyabinsk and Krasnoyarsk regions along with the Khakassia republic, had previously disputed a penalty from the Federal Service for Environmental Supervision (Rostechnadzor) concerning safety infractions, according to the FSB source cited by TASS.

In 2024, the firm reported production of 10.6 tons of gold and earnings of 25 billion rubles ($320 million), but it also incurred a net loss of 7.2 billion rubles ($90 million).

An RBC news website source revealed that FSB agents also searched the office of Konstantin Strukov, the billionaire owner and president of the firm.

Yuzhnouralzoloto has not yet released any public statement regarding the raids.

A law enforcement source told the Kommersant business daily that the company has been associated with six fatal workplace incidents in recent years, indicating a potential “negligent approach” to industrial safety.

One of the most severe environmental incidents linked to the company occurred in April 2024, when a dam at a technical reservoir at the Svetlinsky deposit collapsed.

This event unleashed industrial waste containing arsenic into the Baturovka and Sanarka rivers, contaminating approximately 3.5 million square feet of farmland.

The Chelyabinsk regional prosecutor’s office estimated the damages at 3 billion rubles ($38 million) and has initiated legal action against the company to recover these costs.

Further inquiries revealed that the dam was constructed in violation of safety regulations and was operating without the required permits.

In addition to the FSB’s investigation, the Plastovsky city court is currently examining seven lawsuits filed by the environmental prosecutor’s office against Yuzhnouralzoloto. Two of these have been partially settled, with the firm paying 113 million rubles ($1.5 million) in compensation. The total amount sought across all lawsuits exceeds 654 million rubles ($8 million).

Additionally, last year, Rostechnadzor halted activities at four of the company’s primary mines for three months due to “systemic violations of industrial safety.”