Russia’s government plans to expand a special economic zone in the Far East of the country to secure an initial investment of US$38 million into a gold and silver mining project.
The Ministry for the Development of the Far East of Russia is backing an amendment to the legislation that will allow for an expansion of the Nikolaevsk Advanced Special Economic Zone (ASEZ).
The parameters of the zone are being changed to “help realize a large investment project,” an official at the ministry said.
Russia’s NGK Resource, which specializes in geological exploration and production of metals and minerals, is behind the mine project in the expanded part of the zone, an official at the company said.
The investor intends to build an ore processing plant at the Polyanka deposit, which is estimated to contain recoverable reserves of 7.75 tons of gold and 12.2 tons of silver.
“Work’s already started. Within a year, we expect to start the production. Over the longer term, we want to reach an annual gold production of 1.5 tons,” Andrei Shabalin, chief economist of NGK Resource, said in an interview.
The government is expected to formally approve expansion of the special economic zone this week, which will offer lower taxes on profit and property over the first five years.
The Nikolaevsk ASEZ was established in April 2017. According to the state-run Far East Development Corporation, 10 investor proposals for projects estimated at over $88 million were submitted. Three projects, which involved $6.2 million of private investment, have started.
Gold reserves in Russia’s Far East account for 45% of the country’s total gold production and reserves of the precious metal are estimated at 5,000 tons. More than 50 gold mining companies work in the region.