Russia initiating US and Canadian investment interest (again)
Russia plans to create conditions for the return of the US and Canadian investors to the domestic market, which activities in the country have almost been suspended due to the beginning of sanctions wars between Russia and the West.
As part of these plans, particular hopes are put on the forthcoming St. Petersburg International Economic Forum, the most important business event in Russia and Eastern Europe, that will be held in St. Petersburg on June 1-3 of the current year.
According to Kirill Dmitriev, head of the Russian Direct Investment Fund, (a $10 billion fund established by the Russian government in June 2011 to make equity investments in high-growth sectors of the Russian economy) up to 30 potential investors from the US and Canada have already expressed their interest to participate in the forum and to meet with the Russian President Vladimir Putin.
During this forum the companies plan to present their investment projects, which are scheduled for implementation in Russia. There is a possibility that part of these projects will be implemented by investors jointly with the Russian Direct Investment Fund.
In the meantime, the Russian government from its side has already promised potential investors from North America to provide all the needed assistance during the implementation of their projects within the territory of Russia, and in particular tax and other benefits.
In the case of Canadian investors, to date, several companies have declared their plans to expand their Russian business.
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For example, Canadian Stans Energy has recently announced its intention to invest US$70 million in the production of lithium carbonate in Russia.
In the heart of the project is the development of Zavitinsky lithium field, one of Russia’s largest poly-metallic fields, which is located in the Shilkinsky district of the Zabaykalsky Krai, the krai, in the historical region of Transbaikalia, close to China.
Particular hopes on Russia are also put by Canadian Kinross Gold, which has also recently announced its plans to accelerate its expansion in the Russian gold mining, as the company has long been involved in the production of gold in the Russian Chukotka Peninsula, the eastmost peninsula of Asia.
According to earlier statements of Lu Naumovski, vice-president of Kinross Gold, the company plans to start the production of gold on the Moroshka field next year.
The Moroshka field is located only 5 km away from Kupol, the company’s major gold field in Russia. At the same time, in addition to Moroshka, the company is considering developing Septyabrskoye field, which is located near the Dvoynoe gold mining field, another major gold field in Russia, operated by Kinross Gold.
At the same time, in addition to the attraction of investors from North America, the Russian government, from its side, may consider the possibility of the increase of investments in Canadian assets. This may take place through the investing funds in the Canadian business, and potential purchase of Canadian dollars in order to protect Russia’s gold reserves from the possible weakening of the US dollar in the long-term.
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>