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MOSCOW, July 8 (Reuters) - Russia's largest gold producer Polyus PLZL.MM said on Wednesday it plans to suspend dividend payments until 2030 to fund large-scale investment projects.

Management intends to recommend the move to the board of directors after conducting a "thorough analysis of the current market environment", the company said.

The planned dividend suspension reflects high borrowing costs, rising production expenses, lower gold prices and risks to investment project timelines.

Polyus shares were down nearly 20% on the Moscow Exchange.

After reaching a peak of about $5,600 per ounce at the end of January, gold prices have fallen 26%, but are still around 75% higher than two years ago.

Russia was the world's second-largest gold producer after China in 2025, accounting for about 9% of global mine production, according to consultancy Metals Focus.

Polyus' key project is the $6 billion Sukhoi Log development in Siberia. The project is entering its active construction phase and, together with other expansion projects, is expected to double the company's gold output, potentially allowing Russia to overtake China as the world's largest gold producer, according to company estimates.

All major Russian gold miners, including Polyus, are under Western sanctions. The United States, Britain and the European Union banned imports of Russian gold in 2022.

Polyus resumed dividend payments based on its results for the first nine months of 2024 after a hiatus of more than two years, supported by high gold prices.

In spring 2025, the company revised its dividend policy, making it more flexible to reflect market conditions and strategic objectives. Management warned that if conditions deteriorated and there was a risk of delaying the flagship Sukhoi Log project, the company would prioritize growth projects over dividends.