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Message: PDAC 2012: Russia eyes rule changes to draw investment
PDAC 2012: Russia eyes rule changes to draw investment
Peter Koven Mar 6, 2012 – 5:49 PM ET
Andrey Rudakov/Bloomberg
Alexei Orel, who co-chairs a government mining working group, said Russia is looking at regulatory changes that would make it much more attractive for foreign investors.
When it comes to exploration, Russia is one of the great untouched frontiers. The resource potential is enormous, but foreign investment there still lags far behind most of the rest of the world as companies don’t trust the political or regulatory environment.
Alexei Orel, who co-chairs a government mining working group, wants to change that. He said Russia is looking at regulatory changes that would make it much more attractive for foreign investors.
One important one is changing the definition of a “strategic” asset so that far fewer projects meet the criteria. This is important, because once an asset is considered “strategic,” there are big limitations on foreign investment, and they require special approvals to get around.
To take gold as an example, Mr, Orel said that a discovery of more than 50 tonnes is currently viewed as strategic, and foreign ownership is capped at 10%. He said the plan is to increase the cut-off to 250 tonnes.
The most successful foreign miner in Russia is unquestionably Kinross Gold Corp., which is operating one mine in the country and developing another. Mr. Orel said Kinross has done a good job of promoting the benefits of Russia’s mining sector.
“The key to get investment here is to make public the success stories,” he said.
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