How a resident of the Beringovsky ASEZ brought people to the desert region of Chukotka
The model of Advanced Special Economic Zones is aimed at making the produced products competitive not only in the domestic Russian market, but also in the markets of the countries of the Asia-Pacific region. Chukotka has already accomplished this task successfully: the Fandushkinskoye field deposit, developed by the Australian company Tigers Realm Coal, has begun to produce coal for China. Thanks to receiving the resident status, the Beringovsky ASEZ managed to get different approvals for the project faster, including the most important one of all: permission to start exporting products through the Beringovsky port.
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In the first seven months of 2017, 257,600 tons of coal were mined in Chukotka, compairing to only 166,100 tons a year earlier in the same period. The growth of coal output by 55% was ensured by one of the two coal-producing enterprises, Beringpromugol LLC. This subsidiary of the Australian Tigers Realm Coal Limited is a resident of the Beringovsky ASEZ. The company has owned a license for the reserves of the Fandushkinskoye field deposit since 2012, active development of which began in January, 2017. The company believes that the deposit can yield up to 2 million tons of coal annually, and will provide up to 600 thousand tons in 2018.
At the moment, coal reserves in the Fandushkinskoye field are confirmed for category B (750 thousand tons of G grade coal), category C1 (5,559 thousand tons) and category C2 (4,081 thousand tons). The total resources of the entire Bering coal-bearing basin in Chukotka are 4 billion tons of coal. Coal deposits in the basin are mostly high-quality energy coal: G (gas), Zh (fat) and D (long-flame). The project of developing the deposits of the Bering coal basin is aimed at creating a mining complex with a capacity of at least 10 million tons of coal per year, focused on the export of coal to the countries of the Asia-Pacific region.
For now, eight cars are loaded with coal at the Fandushkinskoye field daily, which then go to the port of Beringovsky along the 40-kilometer road constructed by the resident company in May-July of this year. The fuel is then loaded to ships that carry it both to the Chukchi settlements and outside the region: the first bulk carrier, Achilles, with 38.5 thousand tons of coal for China, departed in July. Until the end of navigation in 2017, the countries of the Asia-Pacific region should receive no less than 200 thousand tons of coal.
It should be noted that in order for Achilles to leave for the voyage, a lot of work had to be done, and building the road to the new port, though important, was far from being the only part. The Federal Customs Service and the resident company spent a lot of time agreeing all the nuances of the port’s export work in supervisory instances. After all, the sea checkpoint with its temporary scheme was actually created from scratch. The resident was advised by the Far Eastern Customs Administration and the Magadan Customs Office. There is no need for a permanent checkpoint in Beringovsky for now: it’s focused on shipping 10–15 ships per year during five months of navigation. But even for working on the temporary scheme, the resident required a whole series of approvals from customs, border and sanitary authorities.
“The creation of the Beringovsky ASEZ significantly facilitated all the business processes in the Chukotka Autonomous Okrug. Thanks to this, we quickly obtain all the necessary licensing documents with the full cooperation of the Ministry for Development of the Russian Far East, the highest executive bodies of the state, as well as the executive and administrative bodies of municipal entities in the territory of the Chukotka Autonomous Okrug. We consider the provision of all necessary documentation a great help in the development of our project”, says Peter Balka, Chief Executive Officer of Tigers Realm Coal.
Of course, the company’s project in Russia was successful not only because of state support, but also due to proper business planning. “In the current situation, competitiveness depends on the quality of the extracted raw materials and logistical factors – the transport availability of deposits above all. In this regard, the development of deposits in Chukotka that are not tied to the railway or other ports is of special interest to us”, says Denis Kurochkin, CFO of Tigers Realm Coal. The company is ready to invest not only in extractive infrastructure, but also in transport, as well as its own power generation. The total amount of private investment in the project is estimated at 6.5 billion rubles.
It is worth noting that the area of operation was completely uninhabited. The nearest settlement, Beringovsky village, is 40 km away from the basin. In addition to the shift camp and the facilities at the Fandushkinskoye field itself, the resident will build a road to the port. Tigers Realm Coal has already given jobs to 120 people in Russia, including 30 residents of Chukotka. By 2019–2020, with increasing production volumes, the company will create about 500 jobs at the deposit site and in the port. And if previously uninhabited territories are brought to life, isn’t it the success of the Beringovsky ASEZ?