The event, organized by the Russian Union of Industrialists and Entrepreneurs (RUIE), took place on April 14, 2023 as part of the Russian Business Weeks. The key topics of the Forum were import substitution in the mining industry, as well as the mechanisms of investment activity of enterprises and measures of state support for the industry.
Within the framework of the Forum, meetings of four working groups were held:
- Special investment and tax regimes for the mining industry
- Cargo logistics: Prospects for the development of railway and port infrastructure
- Automation and digital transformation of mining enterprises
- Local energy supply of investment projects in the mining industry
The meetings were attended by top officials of leading mining companies and financial organizations: LLC Management Company Baimskaya, OK Rusal, LLC Raspadskaya Coal Company, JSC Rosgeologia, JSC AGD DIAMONDS, LLC Company Vostsibugol, LLC Management Company Metalloinvest, LLC PGMK, LLC EVRAZ, LLC COULSTAR, LLC CHETRA, JSC BELAZ, JSC TYAZHMASH, JSC RIMERA, JSC UMMC, JSC Management Company Kuzbassrazrezugol, JSC SUEK, LLC Razrez Tailepsky, PJSC Seligdar, VEB.RF, VTB Bank (PJSC) and others.
Within the framework of the Working Groups, the Forum participants formulated proposals to the Government of the Russian Federation on the development of the industry, including issues of additional measures of state support, attracting funding for new investment projects, introducing digital technologies in mining engineering, as well as removing regulatory barriers in the transportation of mining and metallurgical goods.
At the Forum, the Russian Far East and Arctic Development Corporation (RFEADC) and the Joint-Stock Company Rusatom Overseas (JSC RAOS, part of the State Atomic Energy Corporation Rosatom) signed an agreement on cooperation in the construction of the first Russian low-power nuclear power plant in the Republic of Sakha (Yakutia). As part of the interaction, the RFEADC will assist the State Corporation Rosatom in choosing the most effective measures of state support for this project in the Russian Arctic. The territory of the Ust-Yansky ulus in the northern part of Yakutia will become the location for the ground-based low-power nuclear power plant.
Following the results of the meetings of the working groups, a plenary meeting of the Forum was held, which was attended by Alexander Shokhin, President of the RUIE; Sergey Mochalnikov, Deputy Minister of Energy of the Russian Federation; Anatoly Bobrakov, Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic; Evgeny Petrov, Head of the Federal Agency for Subsoil Use; Sergey Gorkov, General Director - Chairman of the Management Board of Rosgeo JSC and other key industry participants. The plenary session was moderated by Igor Vdovin, Member of the Board of the RUIE, Chairman of the RUIE Committee on Investment Policy, Development Institutions and Export Support.
One of the key topics voiced during the Plenary session was support measures and investment instruments for mining projects. Today, far from all support mechanisms and institutions take into account the specifics of the industry.
Among the challenges faced by the industry today, forum participants named the need to reorient from familiar markets to new ones, as well as the inaccessibility of equipment, which is exacerbated by problems in the supply of spare parts, consumables and service provision. The demand from subsoil users for equipment is significant, and measures are needed to consolidate such demand. RUIE is ready to participate in this work. In addition, systemic support for import substitution is needed, including the development of an insurance mechanism for the purchase of pilot lots.
The participants also noted the need to amend the standards of the Industrial Development Fund (IDF). The existing mechanism for financing new projects through the IDF has a number of significant limitations that make it impossible to use it to implement the import substitution program: the list of industries financed from the development means does not include the companies with OKVED (Russian National Classifier of Types of Economic Activity) related to Ministry of Natural Resources, while most mining companies have such OKVEDs as their main ones.
In addition, during the plenary session, experts outlined the importance of accelerated infrastructure development and debottlenecking with the maximum attraction of private investment. Today, transport and logistics problems that are extremely acute for the sector - the growth of tariffs, problems at the Eastern Range limit the possibility of reorientation to new export destinations. Many tasks have been formulated in terms of digitalization and automation of the sector - the use of drones, robotics, digital twins, artificial intelligence and other solutions that will radically increase the efficiency of the sector and reach a new level of industrial safety.
The mechanism of agreements on the protection and promotion of capital investments has been significantly updated, but a number of issues still need to be improved. In particular, the vagueness of the rules for combining the Investment Protection and Promotion Agreement (IPPA) with other investment regimes and state support measures, the practice of evaluating a new investment project by the region, without which it is now impossible to conclude an IPPA (“regional barrier”), the lack of a well-formed practice of applying a stabilization clause, has not been fully formed.
The initiatives formulated within the framework of the Forum will be sent to the relevant commissions of the State Council of the Russian Federation to prepare a list of applications for the development and support of the industry.
Vladimir Malakhov, Rough&Polished
