Metals & Mining News Digest

MOSCOW. Oct 9 (Interfax) - The Russian government has agreed to finance the federal investment tax deduction (FITD) totalling 150 billion rubles annually, and is ready to amend the amount going forward, Deputy Prime Minister Alexander Novak said. "A decision has now been reached that the total amount of benefits under the instrument will be 150 billion rubles annually. This is an indefinite instrument, not only for 2025. It could be adjusted in the future," Novak told reporters, following his attendance at a meeting of the management board of the Russian Union of Industrialists and Entrepreneurs (RSPP), in response to the possibility of increasing the amount of FITD financing beyond 2025. The 150 billion rubles is lower than that indicated in the financial and economic substantiation for the draft resolution of the Russian government on the parameters of the FITD as prepared by the Economic Development Ministry, where the costs of the deduction are estimated at 200 billion rubles, as well as the amount that businesses indicated as sufficient to support the investment activity of companies under the current monetary policy and external restrictions at 500 billion rubles. RSPP head Alexander Shokhin also told reporters that the agreed amount of funds for the FITD is a compromise. "The amount of 150 billion rubles, thank you, Alexander Valentinovich [Novak], and your colleagues from the Economic Development Ministry, because we thought that we had a compromise of 200 billion rubles. The Finance Ministry thought that it was 100 billion, so this happy medium for the 2025 'pilot' is, in principle, an acceptable figure, in my opinion," he said. The topic of maintaining the investment activity of companies in the conditions of tight monetary policy was the subject of discussion at the RSPP board meeting, Novak and Shokhin said without providing any details. Novak said that in terms of the FITD, the government met businesses halfway on the matter of the possibility of simultaneously receiving a deduction and funds from accelerated depreciation. "The RSPP proposed not to account for accelerated depreciation. These decisions that we also agreed were adopted, and there should be a good incentive for businesses in addition, so that the benefits do not overlap, ensuring the possibility of using both opportunities to incentivise the acquisition of high-tech equipment," he said. The government is implementing the FITD along with raising the basic rate on profit tax from 20% to 25% as of 2025 in order to offset the increased burden on companies investing in the purchase of modern technological equipment. "Five areas of OKVED [Russian Classification of Economic Activities] have even been identified currently, the industries that will be affected in terms of machinery and equipment.

This should render it possible to reduce the profit tax by up to 5 absolute percentage rates of profit tax automatically for all industries without considering specific projects," Novak said. Shokhin noted the importance of the automatic provision of the FITD, while expressing hope that the list of economic activity codes that allow one to claim a deduction would be expanded going forward. "If the government sees that businesses are responding positively to the mechanism, to the instrument, and investments in the types of activities that were included are quite active, then we could seek to expand them," he said, noting that the RSPP had previously proposed extending the FITD, particularly to projects in the telecommunications industry and housing and communal services. It is currently assumed that companies operating in five OKVED areas will be able to apply for FITD, namely in mining, manufacturing, supplying electricity, gas and steam, as well as air conditioning, hotel and catering operations, and scientific research and development. The right to apply the investment deduction is granted for investments in "machinery and equipment, including business inventory," as well as "exclusive rights to an invention, utility model or industrial design." The FITD amount should be 6% of the amount of investment expenses in the specified areas. If the FITD exceeds tax payments in the reporting period, then the excess amount could be used to reduce the amount of profit tax over the next 10 years.

MOSCOW. Oct 7 (Interfax) - RosGeo, the Russian geological holding company, is ready to carry out full-scale geological exploration work in the transit zone of Equatorial Guinea's continental shelf, as well as onshore exploration work for solid minerals at previously identified promising sites in the country's Rio Muni region, the company said. "RosGeo General Director Sergei Radkov stated the proposals during a working meeting with [Russian] Deputy Prime Minister Alexander Novak and Equatorial Guinea's Minister of Mines and Hydrocarbons Antonio Oburu Ondo on the sidelines of the Russian Energy Week forum. Among the topics discussed at the meeting were the conditions for Russian oil and gas companies' participation in projects for exploring and extracting hydrocarbons in Equatorial Guinea," it said. RosGeo has proposed conducting full-scale onshore-offshore transit zone geophysical marine research, including 2D and 3D gravimagnetic and seismic surveying and reprocessing archival seismic data, to Equatorial Guinea, where dozens of oil and gas fields have been discovered on the continental shelf. The goal of the proposed work is to clarify the boundaries and thickness of Rio Muni's sedimentary basin, geologically align the water area's transit zone with deep-sea and onshore areas, and uncover and localize promising new hydrocarbon licensing facilities attractive for investment. RosGeo has also proposed conducting surface exploration work for geological mapping at a scale of 1:50,000. It proposes conducting the work at the identified promising sites to create a modern highly informative basis for solid minerals exploration work. As reported, RosGeo's subsidiaries Zarubezhgeologia and Yuzhmorgeologia have completed the first reconnaissance stage of seismic surveying in the transit zone and state mapping in the Rio Muni region, considered the most promising for mineral exploration in Equatorial Guinea.

MOSCOW. Oct 10 (Interfax) - Sweden's Kopy Goldfields, whose production assets are represented by Amur Zoloto, has applied to delist from the Nasdaq First North Growth Market in Stockholm, and the company said that the exchange has approved the application. Nasdaq has set the final trading day on October 23. Kopy Goldfields earlier offered to buy out the shares of minority shareholders and reduce the charter capital. Shareholders owning 9.43% accepted the offer. Following the deal, the stake of Kopy Goldfields' main shareholders, HC Alliance Mining Group and Magomed Bazhaev, increased to approximately 93%. A friendly shareholder owns another 2.5%, meaning 95.5% is not in free float. Kopy Goldfields completed a reverse takeover of Amur Gold in 2020, with Alliance Group's shareholders, namely Arsen Idrisov, Musa, Deni, and Magomed Bazhaev, gaining control of the merged company. The company is among Russia's top 30 goldminers.

BISHKEK. Oct 4 (Interfax) - Kumtor Gold Company (KGC) plans to mine 12.5 tonnes of gold at the Kumtor deposit in Kyrgyzstan in 2024, its press service said. This would be 7.9% less than the 13.567 tonnes the mine produced in 2023. KGC said drops in planned production were not infrequent due to the low gold content of the commercial ore. "There have been cases when the volume of gold mined was less than targeted due to the low grades," it said. Planned gold sales are also 12.5 tonnes this year. KGC sold 13.577 tonnes of a planned 14 tonnes of gold in 2023. Specialists say the mine will continue to yield low-grade ore for a while. It will then gradually ramp up output to 17-18 tonnes annually given various projects to mine deep-lying ores and recover gold from tailings. KGC's sales revenue was $849 million in 2023, above a planned $734.2 million, and net profit was $302.4 million, above a planned $194 million. Dividends of $151.3 million were paid last year. Kumtor is one of the largest gold mines in Central Asia, located in the Issyk-Kul region in the north of Kyrgyzstan, 60 km from the border with China at an altitude of more than 4,000 meters. Kumtor was one of the largest foreign investment projects in Kyrgyzstan. The mine was owned by the Canadian company Centerra Gold Inc., which operated it through its subsidiary Kumtor Gold Company under a 2009 agreement with the government.

VLADIVOSTOK. Oct 4 (Interfax) - The Sukhodol Seaport in Primorye plans to handle about 3 million tonnes of coal for export this year and then ramp up the figure to 9 million-12 million tonnes in 2025, port CEO Sergei Kropotov told Interfax. The port has design capacity to handle 12 million tonnes of coal per year, he said. "The whole process part has been fully launched, so we're ready to receive about 1 million1.2 million tonnes monthly. Right now we're operating in the regime and according to the method determined for us by the scale of coal shipments to the port. This year, with the launch and hot testing, we'll handle about 3 million tonnes of coal. Next year our plan, taking into account the method, is a minimum of 9 million tonnes and maximum of 12 million tonnes," Kropotov said. The port is currently handling coal primarily from the Kuznetsk Basin. "Be we have now begun to very actively work on attracting coal producers, both small and medium, including from Yakutia," he said. The port also plans to start handling containers at the beginning of 2025 after receiving two Liebherr 420 cranes. "We're supposed to receive two cranes by the start of 2025 that will make it possible to work with containers from ships. They're now being shipped. Take two months for arrival, plus maintenance, so we expect that with the New Year we'll already begin to work full-scale," Kropotov said. "Initially we're anticipating around 5,000-7,000 TEU per month. For further growth we need to prepare areas and equipment for container services. In 2025, we plan to handle about 15,000 TEU per month," he said. It was reported earlier that Sukhodol, which previously focused only on exports, began handling imports on Thursday. The first import cargo to arrive at the port was cars from China.