Home  Journals  Economic Analysis: Theory and Practice  39(390) - 2014 October

Efficient reproduction of the mineral resource base of Russian diamond-mining enterprises

Available online: 24 October 2014

Subject Heading: BUSINESS CATEGORY ANALYSIS

JEL Classification: 

Pages: 50-56

Mining continues to be a basis of the Russian economy development. As usual, in the long term Russia's economic position in the world will largely depend on quantity, quality and value of mineral raw materials extracted from its subsoil. As for diamond reserves, Russia outstrips significantly all other world producers as it has about 50% of total world reserves. Nowadays, Russia is a leader in the world market in terms of rough diamonds mining and sale. Annual diamond production is about 35 million carats. To remain competitive, Russia's diamond industry should introduce full reproduction of its mineral and raw materials base. In Russia, the reproduction of raw materials base fully depends on the funds of subsoil users, who are focusing mainly on additional exploration and commissioning of already known deposits, rather than on searching for new deposits, as virtually all mining companies have inventory stocks for decades and find no sense to invest additional funds. As a result, the volume of performed prognostic, prospecting and estimation works is minimal, and large areas need exploration. It is necessary to review the activity of the State special-purpose budgetary fund for raw materials base reproduction for rational management of natural resources and effective reproduction of raw materials base. This fund should finance all works related to geological development of the territories of the Republic of Sakha (Yakutia). Due to the high degree of monopolization of the mineral market, there is a need to attract investors to finance geological prospecting and exploration, thus enabling the participation of new players in the market and creating a competitive environment that would expand the business in the field of exploration.

Keywords: efficiency, diamond-mining, industry, inventory, geological knowledge, reproduction, mineral resource base, exploration

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