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Gold and more: how the Magadan region attracts investors

In 2020, more than 49 tons of gold were mined in Kolyma - the last time this was in 1974.

Oleg Kosolapov, Minister of Natural Resources and Environment of the Magadan Region, told EastRussia about the prospects for gold mining in Kolyma, and about what else the region is of interest to large investors.

Gold and more: how the Magadan region attracts investors
Photo: Press Service of the Government of the Magadan Region

- Oleg Veniaminovich, what attracts investors to Kolyma with its resources, despite the difficult climatic and logistical conditions?

- Companies implementing regional investment projects in the Magadan Region receive a number of preferences. The zero tax rate for corporate income tax is applied for ten tax periods, starting from the period in which the first profit is received from the sale of goods produced in the RIP regime.

The Law of the Magadan Region "On the Establishment of the Tax Rate on the Tax on Profit of Organizations for Organizations Implementing Regional Investment Projects in the Territory of the Magadan Region" to the regional budget, during five tax periods, starting with the one in which the first profit was made from the implementation of the RIP, and 1% during the next five tax periods. When determining the amount of tax on DPI, the RIP participants apply a coefficient characterizing the production area.

In the Magadan Region, the RIP register includes 3 organizations - JSC Polyus Magadan, LLC Primorskoe and LLC Evenskaya GRK.

- Kolyma is interested in the extraction of non-ferrous metals in the region. As part of a public-private partnership, the Regional Junior Geological Exploration Company conducts exploration work to identify objects with industrial reserves of copper, molybdenum, lead, zinc, tungsten and other metals. What are the results of the first season of her work?

- In 2020, field work on prospecting for copper objects within the Talnikovaya prospective area-1, Talnikovaya prospective area-2, Keitevanskaya revealed zones of sulfide mineralization, promising for the discovery of copper-molybdenum deposits. This year, prospecting drilling is underway in the first area to verify the identified sulfidized areas. On the rest, geological and geophysical research continues. Their total resource potential is estimated at 10,5 million tons of copper.

The Ural Mining and Metallurgical Company, the Russian Copper Company, KAZ Minerals, and foreign investors are showing interest in the development of the junior direction in the Magadan Region.

- Precious metals remain the backbone of the economy of the Magadan Region. How is the increase in proven reserves of gold and silver ensured?

The geological exploration program for solid minerals for 2021 at the expense of subsoil users contains 147 objects: one for coal, four for non-ferrous and rare, and 142 for precious metals. Expenditures are planned in the amount of 2 billion 796 million 974,8 thousand rubles, of which almost 93% of the total volume is spent on geological exploration for ore and placer gold. The increase in reserves and estimated inferred mineral resources in 2021 in Kolyma is 6 kg of alluvial gold, 258,6 kg of ore gold, and 11 tons of silver.

Information: In 2021, it is planned to produce 50 tons of chemically pure gold in the region. As of August 1, 2021, the subsoil users of the region mined 26,7 tons of gold (18,13 tons of ore and 8,57 tons of placer gold) and 356,68 tons of silver.

Until recently, exploration at the expense of the federal budget was carried out without taking into account the opinion of the government of the Magadan region. Federal financing of Kolyma in this direction of the total volume in the Far Eastern Federal District has decreased over 5 years by 8%. We consider it necessary to consider the issue of increasing federal funding for geological exploration in Kolyma within the framework of the RF state program "Reproduction and use of natural resources" in order to bring predicted resources not lower than category P1 in subsoil areas containing non-ferrous and ferrous metals, and provide for it in the site-by-site exploration plans for solid minerals.

- Kolyma is working on expanding the list of preferences for new members of the Special Economic Zone of the Magadan Region. Tell us about it.

The regime of the Special Economic Zone in the Magadan Region has been in effect since 1999, it allows creating conditions for the development of the region's economy, close to the national average, in order to compensate for the high transport and energy costs. For potential investors, the main thing is the duration of the SEZ functioning and the provision of benefits.

If a favorable environment is created, the conjuncture of prices for gold, etc., in Kolyma, gold production from alluvial deposits is predicted at the level of 14-15 tons within 10-12 years.

The region's gold mining industry is associated with the development of deposits in the Yano-Kolyma gold province, and its richest deposits Natalkinskoye and Pavlik. It is expected that by 2025 up to half of all gold in the region will be extracted from their bowels. The Natalka deposit is the largest in terms of reserves in the world, it can ensure the operation of a gold recovery plant for 50 years, and bring the level of gold production to 60 tons per year.

Information: According to official data, in January-March 2021, the volume of investments in the mining industry in the region amounted to more than 4,2 billion rubles, which is 110,1% compared to January-March 2020 in comparable figures.

There are also promising objects of non-ferrous and ferrous metals in the region. This is the Oroekskaya promising area with a total resource potential of 11 million tons of copper, 16 tons of silver, 500 thousand tons of lead and 550 thousand tons of zinc; Oldyaninsky ore cluster with a total resource potential of 700 thousand tons of molybdenum, 568 thousand tons of copper, 379 tons of gold, 20,8 tons of rhenium; South Omolon iron ore cluster with a total resource potential of iron ore - 19,0 million tons with an average iron content of 1990% (38 million tons).

Therefore, the Government of the region, together with the Ministry of Economic Development of Russia, is working to extend the regime of the Special Economic Zone in the territory of Kolyma for a period of at least 20 years and to expand the list of preferences provided to the participants of the SEZ.

Among them - the possibility not to pay the recycling fee in respect of vehicles, from the date of production of which has passed less than three years; apply reduced rates of insurance premiums by the SEZ member in relation to individuals registered at the place of residence in the territory of the Far Eastern Federal District, employed in new jobs associated with the implementation of an agreement on the implementation of activities, and others. These benefits are applied by residents of the Special Economic Zone of the Kaliningrad Region, TASED, FPV. When they are provided, the participants of the SEZ of the Magadan Region will not need to switch to other modes, since the list of benefits will be similar to those provided in the indicated modes for the entire period of participation in the SEZ.

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