A socially oriented non-financial development institution and a major organizer of international conventions, congress, exhibitions, business, social and sporting, public, and cultural events.

The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of international conventions; exhibitions; and business, public, sporting, and cultural events. It was established in pursuance of a decision by the President of the Russian Federation.

The Foundation was established in 2007 with the aim of facilitating the development of Russia’s economic potential, promoting its national interests, and strengthening the country’s image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

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The Resource Base of the Far East and the Arctic: Current State and Development Prospects
5 September 2019
09:30—11:00
KEY CONCLUSIONS
Rich mineral resources base is fundamental for economic development of the Arctic and the Far East

Extraction of mineral resources is fundamental for the Arctic and the Far East; and given the natural treasures of these two regions, mineral resources are playing and will continue to play the key role — Sergey Gorkov, General Director, Chairman of the management Board of «Rosgeologia».

There are no other drivers or alternatives for development of the Arctic territory and the Far East, except for extraction of a wide range of various mineral resources, including both crude hydrocarbons and solid mineral deposits. The task of the state policy in this sphere is to create conditions for these mineral resources to be involved into turnover. Perhaps, first of all, explored and developed in an economically viable way; and second, within a reasonable period that will allow the country to benefit from this competitive advantage – the mineral resource base — Denis Khramov, First Deputy Minister of Natural Resources and Environment of the Russian Federation.

As a regulator, the state participates in processes in the whole field that we work in, but at the moment our priority is the restoration of the mineral resource base and its replenishment — Kirill Molodtsov, Aide to the Chief of Staff, Presidential Executive Office .

Without developing the industry, first of all, the mining industry, we will not be able to ensure sustainable, dynamic economic growth; and we will not be able to solve social problems that we have identified — Andrey Fedotov, Permanent Representative of the Republic of Sakha (Yakutia) to the President of the Russian Federation; First Deputy Chairman of the Government of the Republic of Sakha (Yakutia).

Currently large companies have great opportunities for investment in geological exploration, and many major market players are actively involved in this — Vitaliy Nesis, Group Chief Executive Officer, Polymetal.

ISSUES
Lack of incentives for investment in geological exploration

The country that is the world’s treasury of these resources does not have its own legislative tools to stimulate geological exploration — Denis Khramov, First Deputy Minister of Natural Resources and Environment of the Russian Federation.

In geological exploration, expenses are still not the prime cost, they are taken from the profit. This issue is demotivating for most companies, and it prevents them from carrying out geological exploration in full — Sergey Gorkov, General Director, Chairman of the management Board of «Rosgeologia».

Our ill-fated mining legislation has led to a real delay, despite the richest resources. <…> Business can count money. <…> That is why it does not want to take risks, it does not want to explore new or projected deposits, because it is risky and there are no guarantees for further work with any specific deposit — Sergey Nosov, Governor of Magadan Region.

When carrying out regional projects and geological exploration, any investor suffers from highly excessive expenditure and very high geological risks, as, on average, only one out of ten explored areas yields positive outcomes — Dmitry Pristanskov, State Secretary – Vice-President, MMC NORILSK NICKEL.

High administrative barriers

The existing system of licenses and permits is working; industry players, major companies, they all know this system and feel comfortable with it. We also use it very successfully. But for juniors it is totally impassable. <…> The whole way from opening a deposit with an exploration license to devising a project takes 2.5–3 years. No juniors participate in this process. They just do not have money, and their investors do not have such long-term plans — Vitaliy Nesis, Group Chief Executive Officer, Polymetal.

Lack of infrastructure, financing and staff

For a country like India, the Far East can have a huge potential for investment and obtaining resources for our growth. <…> Of course, there are issues: infrastructure is not that simple, financing is not that simple, and the situation with people who would do all this work is not that simple — Shiv Vikram Khemka, Vice Chairman, SUN Group.

SOLUTIONS
Improvement of legislation

We need to create conditions, both economic and legislative, that will help attract investments, will help the whole country to use this competitive advantage, will help to involve them into exploration — Denis Khramov, First Deputy Minister of Natural Resources and Environment of the Russian Federation.

Working with foreign investors

Foreign players need more detailed geology, state support, and participation of state companies in the development of the Far East in joint projects — Aleksandr Volkov, Managing Director of Investment Department, Far East Investment and Export Agency.

Junior market will re-emerge in Russia very soon, because the tolerance of investors working with junior companies at global platforms towards country risks is very high — Alexey Chekunkov, Chief Executive Officer, Far East and Baikal Region Development Fund.

State support for investment in infrastructure

In order to have an economic incentive to continue our work in the Arctic, we need to look at the mechanisms that the state can offer to make Arctic projects more economically attractive. One of these elements is soft financing for facility and infrastructure construction at the deposit. This would support the project economy and allow to make final investment decisions. At the same time, the state has almost no risks, because when making final investment decisions, companies usually eliminate all risks related to geological exploration — Andrey Patrushev, Deputy Chief Executive Officer, Shelf Projects Development, Gazprom Neft.

Investment in infrastructure, in joint infrastructure, can help decrease economic costs for investors, and pull economic indicators of specific projects into an economically profitable zone — Denis Khramov, First Deputy Minister of Natural Resources and Environment of the Russian Federation.

Social development and environmental protection

Living well means not only good apartments or accessibility of remote areas. <…> It also means social welfare of residents of the Far East and the fact that the environment <…> should be minimally impacted by the industry — Andrey Fedotov, Permanent Representative of the Republic of Sakha (Yakutia) to the President of the Russian Federation; First Deputy Chairman of the Government of the Republic of Sakha (Yakutia).

Coal has become an issue in terms of environmental damage. <…> We are now opting out of transporting and using coal for hydrogen production — Tadashi Maeda, Governor of the Board of Directors, Japan Bank for International Cooperation (JBIC).

The material was prepared by the Russian news agency TASS