The Russian state-owned Far East and Baikal Development Fund (FEDF), as well as China’s privately-owned Metropoly company, entered into an agreement for creating funds for mining and for infrastructure construction, the FEDF announced on March 30, 2017.
Each of the funds is expected to reach USD1 billion in 2017. Russia’s FEDF will take a 10-percent position in the venture, while the Asian partners will have an 80-percent stake. Investors will contribute 10 percent to the venture.
Infrastructure development in the Far East is expected to receive USD2 billion in investment over the next five years. Inflows into these projects are anticipated to reach six to eight billion dollars.
The new funds’ investment programs envision capital infusions into 15 gold mining sites with net gold reserves of 1,500 tons, as well as two copper-gold deposits, and seven ventures to create infrastructure and recreational facilities.
The bilateral investment foundations that combine public and private capital are expected to be a funding source for Far Eastern development in Russia. The projects to be undertaken under the auspices of the investment funds will further allow Russia to take part in the One Belt, One Road infrastructural initiative. That program seeks to combine China’s Silk Road Economic Belt project with the international Maritime Silk Road initiative. Earlier, Russia’s President Vladimir Putin stated that the development of the Far East is a national priority for the whole century.
Analysts predict that the funds that Russia and China put together will provide monetary outlays for the Baimskaya copper-porphyry field in Chukotka, whose reserves have been estimated at 70.5 million ounces of gold and 32 million tons of copper. The deposit is currently licensed to Baimskaya Mining that belongs to Russian tycoon Roman Abramovich.
Ang Keng Lam, who is the head of China’s World Trade Center, owns Metropoly. FEDF is a component of Vnesheconombank (VEB) that was set up with assets of RUB20 billion (USD355 million) to invest in enterprise development and infrastructural projects.
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