Investment perspectives of localization of Russian and foreign enterprises for mining service equipment and

techniques production on the territory of Kirovsk town of the Murmansk Territory

V International Conference “Mining Industry of the Barents Euro-Arctic Region: looking into the future”

Mining Industry of the Murmansk Territory

Ore mining and mining technique park

590единиц

Investment potential of Kirovsk District

Full legal basis is formed

Institutional management structures are formed

Mechanisms of loan support, budget warrants and preferences are

worked out

Implementation of investment projects on construction and

service maintenance of mining techniques

Effective cooperation with investors

Law of the Russian Federation #473-FL

“Concerning territories of priority social and economic development in the Russian Federation"

Order of the Government of the Russian Federation #614 dated 22.06.2015

“Concerning peculiarities of formation territories of priority social and economic development on the territories of multiprofile municipal formations

of the Russian Federation (monotowns)"

Order of the Government of the Russian Federation #390 dated 24.04.2015“Concerning order of transfer managing company fulfilling functions on management of

the territory of priority social and economic development on the right of ownership or loan of land plots which are in state or municipal ownership, buildings, constructions located on the territory of priority social and economic development, and order of dispose such land plots, buildings, constructions as well as infrastructure objects on the territory of

priority social and economic development"

Federal legislation concerning TPSED

Tax advantages for TPSED residents

Tax preferences for TPSED residents guarantee investors total economic profit up to 30%* during

first 10 years

Total % of tax burden

*The research was conducted by specialists of the Agency for Business and Innovations Development

Comparison of tax rates at different taxation modes

режим ТОСЭР, первые 5 лет

режим ТОСЭР, с 6 по 10-ый год

общий налоговый режим, РФ

налоговая нагрузка, Финляндия

2,3%

6,2%

13,1%

26-29%

INVESTMENT PROJECT EFFECTIVENESS

Localization: “Komsomolsk” TPSEDInvestments in the standard project: 5 400 mln rubles

Productive capacity: 4,5 mln unit

Not present value (NPV),

mln rub.

Internal rate of return (IRR), %

Payback period (PB), years

Discounted payback period, (DPB), years

Excluding benefits

Priority increase TPSED

-4,7

4,2

19,0

27,0

6,7

4,6

17,4

25,4

98,0

10,1

11,2

16,0

Labour potential of Kirovsk District

73%Part of the district

population working in mining industry

enterprise and related industries

60% Proportion of population in

working age

2013 2014 2015 2016 2017 2018 -

5.0

10.0

15.0

20.0

25.0 21.9

21.0 20.3 20.1 20.1 19.9

16.6 16.3 16.1 15.9 15.7 15.6

Labour potential of Kirovsk District

численность трудоспособного населения (тыс. чел.)среднегодовая численность занятых в экономике (тыс. чел.)

Labour resource cost advantages

Average salary in specialties of the mining industry sector in

Kirovsk District is

3 times lessthan in the countries of the Barents Region in Germany

Educational possibilities of Kirovsk District

Technical maintenance and repair of motor transport

Technical exploitation of handling, construction, road building vehicles and equipment (branch-wise)

Repairer of mining equipment

Technical exploitation and maintenance of electric and electro mechanical equipment (branch-wise)

Investment sites portfolio

ANOF-1 District

23 km District

ANOF-3 District

Map of electric power supply centers

Kirovsk

Apatity

There are free electric power supply capacities in the region

Substation15: 110/35/6 kW

Substation-203А: 110/6 kW

Substation-24: 110/35/10 kW

ПС-112: 150/10 кВSubstation-360: 110/35/10 kW

12,263 MVAfree capacity

13,115 MVAfree capacity

32,008 MVAfree capacity

0,071 MVAfree capacity

6,180 MVAfree capacity

63,63 MVA

RF Subject strategy determination in congenial investment climate formation

Formation conditions for implementationof business and investment activity

Assurance of investors

Investment standard 2.0

Proximity to the customers

Labour resources cost

Power resources price

Level of tax burden

Competitive strength of Kirovsk town

Thank you for attention