13 July 2022
A roundtable discussion on the development of the mining industry in the Far Eastern Federal District was held as part of preparations for the industry-specific session of the 7th Eastern Economic Forum. It was organized by the Russian Ministry for the Development of the Far East and Arctic and the Far East and Arctic Development Corporation (FEADC, a state sponsored development institution). EEF 2022 will be held on 5–8 September in Vladivostok. The Forum operator is the Roscongress Foundation.
The discussion brought together representatives of mining companies, industry unions, regional authorities and development institutions, experts, as well as residents of the Far Eastern and Arctic preferential regimes, who invest in mining, extraction and processing minerals.
Roundtable Chairman Anatoly Bobrakov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic, noted that the Far Eastern subsoil users are forming a long-term mineral reserve, developing industry and the national economy: “The share of the mining industry in the gross regional product of the Far Eastern Federal District is about 30%. Mineral exports in 2021 were worth over RUB 552 billion (against the rate of the US dollar as of 31 December 2021), a nearly 23% increase on the previous year. The FEFD dominates in terms of explored reserves of diamonds, uranium, tin, gold, silver, antimony, brucite and boron ores”.
Anatoly Bobrakov said that as part of the plan of priority measures to support the economy, the Russian Government has adopted more than 300 measures to speed up procedures and support business. The Russian Ministry for the Development of the Far East and Arctic is implementing a programme to subsidize interest rates on investment loans this year (Russian Government Resolution No. 811 of 4 May 22). Eighteen projects have already been approved by government commissions for the development of the Far East and the Arctic chaired by Yury Trutnev, Deputy Prime Minister of the Russian Federation and Plenipotentiary Representative of the Russian President in the Far Eastern Federal District. Private investment in these projects will amount to almost RUB 2 trillion, and their implementation is expected to create over 22 thousand jobs.
“Our country has faced unprecedented sanctions pressure from the collective West. The usual supply chains have been altered, and access to technology and equipment has been restricted. I am confident that, together with business, we will find the necessary solutions to support the current operations of mining companies. We will form a reserve for the future, which will ensure both localization of mineral processing in the country and localization of necessary machinery, equipment and technology production, ensuring the technological sovereignty of Russia,” said the Deputy Minister for the Development of the Far East and the Arctic.
The roundtable moderator Daria Kiryanova, Deputy Director General for Economic Development of FEADC, invited participants to share their views on what is needed to develop the gold and coal mining sectors and rare earth metal deposits, taking into account the regional features of subsoil use.
Sergey Kashuba, Chairman of the Union of Gold Producers of Russia, drew attention to the problem of gold discounts on foreign and domestic markets and ways to overcome it.
“For three years in a row, Russia’s gold mining industry has been the world’s second-largest producer of gold from the subsoil. On average, 330 tonnes of gold a year are produced in the country. This year, that rate of production is certainly put under a very big question mark. Now the rouble price of gold has fallen by 20–25% compared to last year. On the domestic market, the Bank of Russia is buying gold at a discount of 10 to 20%. Most banks have fallen under sanctions and can no longer export gold abroad. Independent attempts by gold producers to export have so far been unsuccessful. The government urgently needs to go back to buying gold at world prices and buying back all the gold that remains in reserve after consumption by the public and industrial demand,” thinks Sergey Kashuba.
Pyotr Popov, Deputy Governor and Head of Zabaikalye Territory Government Office under the Government of the Russian Federation, said that he was ready to support gold mining. According to him, the region, which ranks third in Russia by the amount of gold reserves, currently has deposits that require licenses. Potential investors could develop them, given the preferences of the current ASEZ regime and the work of federal and regional development institutions. The speaker offered assistance in developing pricing and reducing state barriers that may arise due to changes in gold mining legislation, particularly with respect to Zabaikalye Territory.
Oleg Kosolapov, Minister of Natural Resources and Ecology of Magadan Region (the Region’s budget directly depends on the price of gold sales) also confirmed that this is a serious problem. He voiced the wishes of local gold miners, who are in favour of the state buying gold for its reserve (which is not as big as in the USA and other developing countries) in the next two or three years. According to Mr. Kosolapov, the gold mining industry has quite serious production and financial potential, so the Region is interested in gold miners taking a more differentiated approach to developing the mines.
“There should be certain preferences for investors who want to engage in other mining activities. It is also worth considering and deciding on a site where you could start building a plant for the production of heavy machinery. These are very promising areas. I propose to draw up a programme for the development of the gold mining industry taking into account all the problems and to organize a working group to work out joint solutions," said Oleg Kosolapov.
In this regard, Dmitry Govorov, Russian Copper Company’s Vice President for Government Relations and Strategic Communications, emphasized the importance of establishing and developing horizontal ties among federal agencies.
Konstantin Sokolov, First Deputy General Director for Corporate Functions of Seligdar (it includes Russias largest tin producer – Rusolovo) and Igor Demidov, Advisor to General Director of Atomredmetzoloto, Chairman of the Rare and Rare Earth Metals Producers and Consumers Association, continued the topic of active development of our own mineral resource base.
A representative of Seligdar (the polymetallic holding invests in the development of the tin mining industry in Khabarovsk Territory – developing the Solnechny mine, the Pravo-Urmiskoye deposit and the Pyrkakayskiy Stockworks deposit in Chukotka Autonomous District), believes that certain tools can increase the attractiveness of an investment project if used. These include lower start-up fees when licensing fields, preferential lending for long-term projects, subsidies for field infrastructure development, and a tax deferral until the project reaches payoff stage.
“To bring the tin industry back to life, we need economic feasibility of deposit development, government contracts and clear payback periods for investment projects that should not exceed 10–12 years. The government needs to have a viable industry to produce one of the strategic metals. It is necessary to create an environment in which an investor will be interested in implementing long-term projects in an environment of high volatility in the prices of produced metals,” summarized Konstantin Sokolov, who suggested creating a tin cluster in the Far East, as well as developing a strategy for the tin mining industry.
Igor Demidov spoke about the potential of the rare earth metals industry, which has “long been in the shadow of the brilliance of gold”. Today it is a growth driver and a new raw material base for high-tech industries. However, the development of the industry requires budgetary funds ahead of the construction of infrastructure, rather than subsidies and compensation upon completion of construction. At the same time, he noted the positive role of the new investor support mechanism – the Far Eastern Concession.
“The industry also needs upgrading technologies and government contracts. We would like to get a government contract to determine what we need, how much we need, what quality we need, and what time frame is. It is not easy, but it is a conceptual task,” said the Chairman of the Rare Earth Metals Producers and Consumers Association.
The issue of qualified personnel for the mining industry was raised by Alexey Belov, Chairman of the Educational and Methodological Council for Mining and Geology Education at the Far Eastern Regional Educational and Methodological Centre of the Russian Ministry of Education and Science, Professor at the Far Eastern Federal University.
The need for personnel in the mining sector has increased by 25%, with about 28,000 people in solid mineral resources and 4,500 people in oil and gas. There is a shortage of mining engineers, mid-level specialists and blue-collar jobs such as mining electromechanics and mechanics. The reason is that in recent years, many universities have reduced enrolment for mining professions.
“We need to exclude the USE indicators from the university rankings. Now students use them to apply for majors that are yet non-prestigious, but necessary for the economy, such as mining engineering. And mining should be singled out not to be mixed with oil-related majors, when it comes to state-sponsored education. Take FEFU as an example: at an enrolment of about 100 people in the ‘Applied geology, mining, oil and gas engineering and geodesy’ group of majors over the past two years we have not accepted a single applicant for a mining engineering degree. As a result, all is well in terms of indicators, and then we face a shortage of specialists,’ summed up Alexey Belov.
In order to resolve this issue, FEFU, developed a concept for creating a Corporate Mining Centre in the Far East together with the state development institution – the Far East and Arctic Development Corporation. The Centre will coordinate and provide university competencies for training of mining specialists at regional universities.
More than 40 representatives of the extractive industries, regional authorities, experts, as well as Far Eastern investors took part in the roundtable, who submitted several dozen proposals for further elaboration and inclusion in the EEF 2022 industry-specific session.
18 January 2024
Bahrain Joins Framework Declaration on Conservation of Gyrfalcons
The Kingdom of Bahrain has become the seventh country to join the Declaration of Intent for the Conservation of the Gyrfalcon Population. The document was adopted by Russia, China, Kyrgyzstan, Kazakhstan, Mongolia, and the UAE as part the Falcon Day International Forum, which was first held in Vladivostok during the 8th Eastern Economic Forum. The event was managed by the Roscongress Foundation.
27 February 2024
Russia and Bahrain Look to Intensify Cultural and Humanitarian Cooperation
Advisor to the Russian President Anton Kobyakov held a meeting in Moscow with Ambassador Extraordinary and Plenipotentiary of the Kingdom of Bahrain to the Russian Federation Ahmed Al-Saati, during which the two officials discussed a wide range of issues concerning economic, cultural, and humanitarian cooperation between the two countries and reached a number of agreements.
07 March 2024
Moscow discussed promoting the potential of the Republic of Kalmykia for its development
A meeting between Anton Kobyakov, Adviser to the President of the Russian Federation, and Batu Khasikov, Head of the Republic of Kalmykia, was held in Moscow to discuss the implementation of a number of key projects and programmes designed to create a long-term basis for the structural development of the economy of the Republic of Kalmykia and the Caspian region.
