Grigory Vygon moderated a key session "MINERAL WEALTH: EXTRACTION AND PROCESSING” at the Eastern Economic Forum 2015.

Dialogue about prospective solid mineral investment projects was hold at the first Eastern Economic Forum, 3-5 September on Russky Island in the Far Eastern Federal University in Vladivostok. The VYGON Consulting company was an intellectual partner of the "Mineral wealth: extraction and processing" session, moderated by the Managing director Grigory Vygon.

The Minister of Natural Resources and Environment of the Russian Federation Sergei Donskoy, Chukotka Autonomous Area Governor  Roman Kopin, the Governor of the Magadan region Vladimir Pecheny, CEO of Polyus Gold International Ltd. Pavel Grachev, Managing Director of JSC Yakutugol of "Mechel" Igor Khaphizov, CEO of Tigers Realm Coal Limited Craig Parry, Vice-president of "Norilsk Nickel "Andrey Bugrov, Regional Vice-president for Russian projects Kinross Gold Corporation Claude Schimper, First Vice-president of PJSC ALROSA  Ilya Ryashchin, General Director of Rosgeologia Roman Panov, First Deputy Minister of Natural Resources and Environment of the Russian Federation Denis Khramov, Deputy Head of the Federal Agency for Subsoil Use Yevgeny Kiselyov discussed industry issues such as mineral resource development in the Far East and plans to increase infrastructure availability to encourage new fields production.

Today additional mechanisms of state support in the Far East are being established to accelerate the inflow of foreign investors and partners from Asia-Pacific Region. The Minister of Natural Resources and Environment of the Russian Federation Sergei Donskoy noted that the federal budget funds for mineral exploration under the state program are expected to increase by 40% in Eastern Siberia and in the Far East since 2015-2016. He also pointed out that the measures to increase Trans-Siberian and Baikal-Amur Railways capacity, as well as enhancing energy provision of projects, will increase the investment attractiveness of solid mineral exploration and extraction. Due to the current industry challenges (the deterioration of the mineral resource base on liquid feedstocks, depletion of newly opened deposits, increasing monopolization of the industry, complexity of the geological features, current global and domestic economic environment, etc.), state funding for exploration decreased from Rub 35.2 to 28.4 bln in 2015. According to S.Donskoy, the industry growth pace could be maintained by the replacement of lacking public investments by private ones. In his view, maintaining production at the developed fields, new areas exploration and development of hard-to-recover, exhausted mineral reserves (as a powerful source to keep production level) are the key directions to focus on.

The governor Vladimir Pechyony told about the investment attractiveness of the Magadan region. Significant resource potential is underpinned by favorable legal conditions for doing business that creates a good investment climate. Thus, the largest domestic and foreign companies, such as "Polyus Gold", "Polymetal", "Cyprus Amax", "Kinross" and "Ovoka Gold" are developing mineral deposits in the region, these companies are. To improve the efficiency of the state system of subsoil use licensing, the governor announced a proposal to amend Article 13.1 of the "Subsoil Law ", on admitting only one participant to be the winner of the mineral use auction if there is no other applicants. He stressed that today at list two participants should be presented during the auction, however, as practice shows, a real investor cannot get a license because often only one applicant intends to participate in the auction..

The governor of the Chukotka Autonomous District Roman Kopin in his report said that exploration intensification in the priority fields is a necessary condition. Resumption of exploration works by private investors enabled to increase the number of successful operations and reveal potential for precious and base metals in the region. It is also necessary to overcome some infrastructural constrains, especially in the energy sector and to ensure the transport availability for new deposits development (for instance, the construction of the "Omolon-Anadyr" road to access Bilibino, Komsomolsk, Egvekinot).

Regional Vice President for Russian projects of the Canadian gold mining corporation Kinross Gold Claude Schimper reported on "Effective investments in the Russian Far East ". The company has exploration activities in Russia since 1995 and today is the largest foreign investor in the Russian gold mining industry. The Corporation has invested more than 3 bln dollars in the Russian mining and produced more than 4 million ounces of gold and 40 million ounces of silver since 2008, which stands for 29% of its global production. It is a successful example of a foreign company, which acquired 100% of the strategic mining asset with the Russian government approval (gold-silver deposit "Dvoinoee" and the area "Vodorazdelnaya" deposit "Kupol").

First Vice-President of PJSC ALROSA Ilya Ryashchin noted in his report that the diamond production of "ALROSA" Group in 2014 reached 36.2 million carats, or 28% of the global production. The last discoveries of large diamonds deposits of were about 15-20 years ago and it is unlikely to discover them in coming years. Thus, in terms of rising costs and complexity in applied production technologies, diversified manufacturing platform and mineral resource base of the "ALROSA" Group become a significant competitive advantage. ALROSA Long-term investment program until 2023 suggests for 382 billion rubles spending, including 239 billion rubles for the  diamond projects, 96 billion rubles investment in funds maintenance , 19 billion rubles for exploration, 27 billion rubles - for social and infrastructure projects. The development of geologically complex and geographically distant diamond projects (Verhnyaya Muna, Zaria and others.) requires the government support.

"Norilsk Nickel" Vice-President Andrey Bugrov, reported on the development status of Bystrinsky field, providing the construction of Bystrinsky Mining and Processing Plant to produce copper gold-bearing, magnetite and gold concentrates. Total construction costs (excluding transportation costs) is 51.6 billion rubles. As of 1 August 2015, total funding is estimated at 23.9 billion rubles. The company is considering various options to attract strategic Chinese partners.

The Minister of Natural Resources and Environment of the Russian Federation Sergei Donskoy summed up the plenary session, stressing that the Russian Federation holds leading positions on key and mostly required in the global industry mineral resources. He also emphasized the Ministry's interest of both private domestic and foreign investors broad participation in the subsoil tenders.