Changing the method for calculating the initial cost of lots at subsoil auctions could become an incentive for the development of the mining industry. This initiative was made by Deputy General Director of Uralchem Rinat Gizatulin at the international Mining World Summit.
The key problem hindering the development of new deposits, a company representative called the starting payment inflated. In his opinion, it is illogical to set a price based on 100% of the reserves indicated in the documents, when only a portion of the resources can actually be extracted. This discourages potential investors and leads to a lack of applications.
Gizatulin emphasized that when making calculations it is necessary to take into account technological loss standards for each specific type of raw material. This realistic approach will make auctions more attractive and transparent. This will allow those areas that are currently being neglected to be brought into economic circulation.
Another barrier to development is complex, multi-component deposits. In addition to the main resource, they contain associated minerals, the extraction of which is often mandatory, but economically unprofitable. The state has not yet developed clear priorities for their development, focusing funding on the search for scarce rare earth metals.
“Of course, national security issues are a priority,” Gizatulin noted. “However, we must not forget about large-scale resources such as coal, ores and non-ferrous metals. Their production provides jobs and significant budget revenues.”
To solve the problem of “idle” deposits, the deputy general director of Uralchem proposed conducting a full inventory of all reserves. In his opinion, those resources that cannot be extracted due to remoteness, lack of infrastructure or too high costs should be excluded from mandatory mining.
The proposals voiced at the summit are aimed at creating more flexible and pragmatic rules of the game in the extractive sector. Their implementation can revive investment activity, help in the development of new deposits and ultimately strengthen the country’s raw material security.
Source: @nedradvnews
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