MOSCOW(BullionStreet): World's fourth largest gold producer Russia is all set to overtake the U.S as No 3 in gold ranking next year, analysts said.

In 2012, nearly all of Russia’s gold-producing areas reported growth in production. Numbers were particularly strong in the Krasnoyarsk Territory and the Irkutsk, Magadan and Chelyabinsk Regions.

There was a drop in output at the Kupol Deposit in the Chukotka Autonomous Region in the Far East, but the decrease was a result of a known reduction of gold content in processed ore there.

Russian companies increased year-on-year gold production by 8.3 percent last year, said Russia’s state statistics agency, Rosstat.

Country's largest gold producer polyus increased production by 12 percent to 1.68 million ounces in 2012 and is anticipating even better numbers for 2013 at 1.8 million ounces.

The lion’s share of Russia’s gold comes from the extraction of mineral resources, which was up 6.3 percent in 2012 to 200 tons. Gold also comes into circulation through the recycling of scrap and waste.

However, some analysts said general market instability and the volatility of the gold market in particular have thwarted a number of major deals in Russia.

They added that the merger of Polyus Gold and Polymetal International, for example, failed to go ahead, and not a single mining or metals company issued an I.P.O. in 2012.

The government also shelved an auction for Sukhoi Log, one of the country’s largest undeveloped gold deposits.