Managing Director
State policy improvement in geological exploration and mineral reserves replacement (MRR) has become the main subject of discussion at the round table on October 27 within the VIII Congress of geologists in Moscow. VYGON Consulting Managing Director Grigory Vygon dedicated his presentation to the economic aspects of the mineral resources complex development. He noted that the ultimate goal of MRR Strategy is establishing conditions to provide sustainable mineral resources supply and sales revenue for the Russian economy. He also emphasized, that within the Strategy development it is necessary to set the development thrust by mineral products considering external and internal challenges.
“During the last 5 years all of you have been watching trends of growing competition in the international markets”, - claimed Vygon. This is due to the minerals supply increase, especially from unconventional reservoirs, and moderate demand growth as the result of economic slowdown and structural changes, which occur in the industry.
Among other factors were energy and resource efficiency increase, renewable energy sources deployment. One of the most unfavorable contemporary challenges for the Russian government and production companies are economic and technological sanctions, which should also be considered in the Strategy, mentioned Vygon.
Internal problems, according to the expert, result in reducing competiveness of the mining sector, such as MRR deterioration due to exploration backlog, falling geological exploration, reduced scale and quality of new discoveries, reserves structure and quality degradation. This process is followed by rising production costs. An important focus of the Strategy, as Vygon noticed, should be recovery rate improvement, since over 45% discovered reserves in Russia are not developed. Annex to the Strategy should contain a road map of arrangements with certain deadlines for the next 5 years, he said.