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O C T O B E R / N O V E M B E R 2 0 1 9 www.resourceworld.com 59 Russia to ease access of foreigners for domestic gold resources by Eugene Gerden T he Russian government plans to sig- nificantly ease access to foreigners for the development of its domestic gold mining resources this year by lifting federal status from those fields where resources do not exceed 200 tonnes, according to an offi- cial spokesman, Dmitry Kobylkin, Russia's Minister of Natural Resources. This will be achieved by the introduction of amend- ments to the existing federal bill on Subsoils that took place in July. The Russian government hopes the introduction of such measures will cre- ate conditions for a significant increase in investments, including foreign, in the domestic gold mining industry and con- tribute to the overall improvement of the business climate in that sector. Lifting of federal status also means that potential investors in Russian gold mining will no longer be obliged to gain special governmental approvals for the devel- opment of the majority of gold mining projects. In the meantime, the latest state plans have already been welcomed by the major- ity of global mining companies operating in Russia, which, in fact, have lobbied for the introduction of these amendments for years. Since 2009, companies have submitted numerous petitions to the Russian govern- ment, asking to ease their access to Russia's gold mining fields. Probably the latest of them was sent by Canadian miner Kinross Gold Corp. [K-TSX; KGC-NYSE] to Russia's Prime Minister Dmitry Medvedev in November, 2018. As the company said at that time, the Russian gold mining industry may attract up to US $1.2 billion in direct foreign investment to its gold mining sector by 2041 with liberalization of its gold min- ing legislation. In addition, the state plan provides other benefits for foreign gold mining investors that involve provisions of additional funding for exploration as well as simplification of the licensing system. Moreover, the government plans to allo- cate 2 billion rubles (US $40 million) for the study of subsoils with the aim of fur- ther distribution of potential sites among investors. Finally, the Russian state plans to con- tinue the use the declarative principle of licensing, which means that low geologi- cal knowledge sites will be provided to investors without competition. The same mechanism will be also applied to areas with medium and good exploration status in the middle-term. An official spokesman of the Russian Presidential Administration said that the provision of additional benefits for gold mining is acutely needed; it has been caused by declining gold production in some major producing regions of the coun- try, particularly Chukotka. According to recent statements by Roman Kopin, Governor of Chukotka, the volume of gold production in the region has significantly decreased primarily due to the exhaustion of reserves of some of the largest local fields, particularly Kupol and Dvoinoye. Kopin said that last year gold production in the region amounted to only 24.130 tonnes (9% in overall Russian pro- duction), which is one of the lowest figures for the region in several years. The decline of production was also observed in the case of some global majors operating in the region. For example, Kinross Gold posted a 20% drop of its pro- duction in 2018, compared to 2017 with 14,150 tonnes. In Chukotka, in addition to Kinrossbeing, among the largest gold min- ers in the region, there are Polymetal (the Mayskoye deposit in the Amur hub) and the Valunisty Mine, both of which also reported a drop in production last year. The biggest depletion of reserves was observed for the Kinross Kupol Mine. Currently, the company is conducting exploration at the Moroshka field, located 4 km away from Kupol, and is considering ramping up work in the near future. Leading Russian gold mining analysts believe Russia has a shortage of large gold mining fields, similar to Sukhoi Log, where reserves were initially estimated at 1,953 tonnes of gold. Consequently, the major- ity of Russian gold mining companies as The Kinross Gold Kupol gold-silver mine located in Chukotka, northeast Russia. Photo courtesy Kinross Gold Corp. continued on page 68