4 September 2019
KEY CONCLUSIONS
State is actively adopting measures for improving investment attractiveness
of Russian industry
“What has been done recently, what support measures have been adopted:
these are co-financing of infrastructure construction as part of investment
projects approved by the government; subsidizing of interest rates for crediting;
provision of government guarantees,” Dmitry Kobylkin, Minister of Natural
Resources and Environment of the Russian Federation.
“I would like to congratulate all Russian legislative authorities, as
all new developments and proposed legislation are being adopted pretty fast,
including those referring to technologies and operations in industrial capacity
management,” Claude Schimper, Senior Vice-President, Russia Operations, Kinross
Gold Corporation.
“We can actually feel not just liberalization, but legislation becoming
more grounded, more satisfying, practical, more applicable. Undoubtedly, it is
the key factor for the industry development,” Pavel Grachev, Chief Executive
Officer, Polyus.
Far East has a huge investment potential
“An enormous territory, deposits that are unique in size and contents,
low competition, good regulation both on federal and regional levels: all these
aspects form a unique investment environment. There are no other places like
this in the world,” Roman Trotsenko, Founder, Chairman of the Board of
Directors, AEON Corporation.
“Since we have studied the global mining industry over the last 15
years, I believe that Russia, and particularly its Far Eastern region, is one
of the most promising in the world. <…> There are huge opportunities in
any field in the Far East: diamonds, gold, copper, coal, mineral fertilizers,”
Shiv Vikram Khemka, Vice Chairman, SUN Group.
PROBLEMS
Imperfection of regulatory control in the industry
“It is crucial that when a new investor comes, they clearly understand
what permits they should obtain from what authorities. Because for ages we have
had such legislation that new investors coming to the country not always
understand what permits they need, who is responsible for them, and how much
time it requires,” Oleg Novachuk, Chairman of the Board of Directors, KAZ
Minerals.
“If we compare legislation for liquid and for solid minerals, we see
that our colleagues from the ‘liquid’ legislation and those who lobbied for it,
have solved many issues. Working at the Federation Council, in our committee we
tried to transfer these novelties that make the life easier for those working
in oil and gas to solid minerals, but we never succeeded. <…> It would be
really groundbreaking and democratic to give us equal rights,” Pavel
Maslovskiy, Chairman of the Board of Directors, Petropavlovsk.
“The industry is under the common taxation scheme; it works in the form
of property tax. <…> If we talk about a new enterprise, it is huge amount
of money. <…> It is one of significant restrictions for the industry. In
fact, it is a tax for new property, which means that this tax demotivates
modernization,” Roman Trotsenko, Founder, Chairman of the Board of Directors,
AEON Corporation.
Lack of attention to geological exploration
“Exploration of a considerable part of resources was carried out in the
Soviet times. Many major Russian companies use those results. <…> Back
then technologies were far from what we have now. If we carried out proper
exploration in the Far East, I think we could mine 10 times more resources than
we do today,” Shiv Vikram Khemka, Vice Chairman, SUN Group.
SOLUTIONS
Ensuring stable and transparent regulation of the industry
“Another opportunity for attracting foreign investment is stability,
clear established rules for taxation and fiscal policies. It is a crucial
factor that we take into account when deciding on further investment in this
region,” Claude Schimper, Senior Vice-President, Russia Operations, Kinross
Gold Corporation.
Fostering geological exploration
“A double increasing co-efficient for expenses on exploration should be
introduced. Today increment of reserves is slower than their recovery. It means
that we lag behind. Therefore, companies should be interested in spending more
on exploration,” Roman Trotsenko, Founder, Chairman of the Board of Directors,
AEON Corporation.
“The abovementioned initiative on expanding the principle of declarative
order for receiving subsoil for geological exploration on P1 and P2 categories
<…> today is not fully used due to the existing restrictions on the size
of available plots: no more than three plots of 100 square kilometres. Given
current circumstances and the scale of the Far East, it is clearly not enough.
<…> At the stage of geological exploration, area may be and should be
much larger,” Pavel Grachev, Chief Executive Officer, Polyus.
Increasing regions’ interest in development of the
mining industry
“One of the areas that can be of interest for regions concerning the
industry development is dividing severance tax, increasing its part that
regions benefit from. Because today regions’ interest remains hypothetical,”
Roman Trotsenko, Founder, Chairman of the Board of Directors, AEON Corporation.
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Foundation’s Information and Analytical System at roscongress.org/en.