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18:09 | Feb 10 | 2012

Leadership is not a fantasy

Implementation of the project on the development of South Yakutia will make the Republic one of the most developed industrial regions of the country.

The purpose of the investment project “Integrated Development of South Yakutia” is to create a new large industrial area with mining and advanced processing of mineral resources factories as well as hydropower facilities in the east of Russia.

A favourable intersection
South Yakutia is the most attractive region of the Far East of the country for a comprehensive high-priority integrated industrial development.
Potent mineral resources and hydropower basis of a world level are concentrated in the region. They are deposits of natural gas, coking coal, iron ore, uranium, apatite, precious and nonferrous metals, and architectural crushed rock. Most of the mineral deposits are licensed and belong to subsoil users – major Russian companies. At cross-sections of the southern Yakutia rivers cascade hydroelectric power plants can be constructed.
South Yakutia is distinguished by an advantageous geopolitical, economic, and geographic location. The Eastern Siberia – Pacific Ocean pipeline runs through the region, soon a gas transportation system Yakutia – Khabarovsk – Vladivostok will be laid along the same line. Here there is the railroad Berkakit – Tommot – Yakutsk and the federal highway “Lena”, also the Baikal-Amur Mainline is located near to the southern extremity of the region, which is now re-energized thanks to the development of fields in the Eastern Siberia and the Far East. The proximity of South Yakutia to the markets of the Asia-Pacific region, along with a convenient logistic component makes the future products competitive.
The project “Integrated Development of South Yakutia" is being implemented through public-private partnership. Private investors are Federal Hydro company “Rushydro” (JSC “Yuzhno-Yakutsk HEC”), uranium holding “Atomredmetzoloto”, “Gazprom” joint-stock company “ALROSA” (JSC “Timir”), coal mining holding “Kolmar”. They design and are going to build the industrial facilities. And “Kolmar” has already started the construction of the Inaglinsky coal complex.

The magnificent seven
There are plans to build seven large industrial facilities: the Kankun Hydropower Plant with a capacity of up to 1,000 MW, the Elkon Mining and Metallurgical Complex (mining and treatment of uranium ore), the Tarynnakhsky and Tayozhny Mining-and-Processing Integrated Works grouped into the South Yakutia Mining Association (extraction and processing of iron ore ), the Inaglinsky Coal Complex (manufacture of pure coal coke), the Seligdarsky Mining and Chemical Complex (phosphate ore mining and production of phosphate fertilizers), the Yakutia Gas Production Center (extraction and processing of gas and gas products and manufacturing of gas-derived products and helium). The road and energy infrastructure will also be created.
The state represented by responsible agencies (Ministry of Energy, “Rosatom”, “Roszheldor”, “Rosavtodor”) is projecting strategic industrial facilities (HPP Kankun, Elkon MMC), and infrastructure property.
The Government of the Sakha Republic (Yakutia) is the state coordinator of the Project.
In 2007, the Development Corporation of South Yakutia was set up for the purpose of filing an application to the RF Investment Fund, which today, being the project office, serves to ensure coordination and synchronization of work. It tends to the creation of an enabling environment for cooperation among all project participants. It is planned that during the construction of industrial facilities and infrastructure the Corporation takes over the solution of key problems arising from lack of skilled personnel and underdevelopment of infrastructure in the region, becomes the coordinator of the work on preparing the territory for the construction of social and infrastructure facilities (housing, social and educational institutions).
The main role in developing the necessary infrastructure to implement large-scale plans – railways, roads, power lines and substations – is given to the state. As part of the public-private partnership, specifically it should finance a larger part of the Project in accordance with the concept of the project.

The Reality of the ÕÕI century
Each of the Project facilities is a technically and technologically unique complex structure. Ecological pressure upon the fragile natural environment has severe limitations. At the same time since the industrialization in the first half of last century there has not been such a difficult task to solve in the short term organizational-wise. Unlike in the past century, today one cannot expect to use harsh administrative methods and leverage, low-cost and easily recruited work force.
At present the design of roads and railways is being completed, design works on the industrial facilities and power grid infrastructure are being continued. The design of the Inaglinsky Coal Complex is completed and its construction is started.
Due to the lack of budgetary resources the key challenge is to attract alternative schemes and funding sources for infrastructure construction. The Government of the Sakha Republic (Yakutia) with active participation of the South Yakutian Corporation is working out a variety of mechanisms and financing schemes. It also cooperates with the federal executive authorities, development agencies, including the State Company “Vnesheconombank”, other interested organizations and experts in this direction.
Removal of infrastructure constraints, construction of new mining and advanced processing of minerals factories, new high-tech product release in demand both in Russia and in the world markets, creation of new jobs and comfortable living conditions are key targets of the South Yakutia Project which meet the current challenges facing the Far East and Russia at large.
Integrated development of South Yakutia became a reality of the early twenty-first century.

Numbers only
The total value of the integrated project is about 422.5 billion rubles. Moreover, in 10 years the investing companies plan to put up approximately 308 billion rubles in the design and construction of industrial facilities. The state should fund the design and construction of around 240 km of railways and 130 km of roads, as well as approximately 1,200 km of high voltage lines and seven substations. State participation in the megaproject will top about 114.5 billion rubles (measured in 2007 rubles), or about 25% of the total investment (
estimated costs measured in 2007 rubles). The state and the investors have already put up 24.46 billion rubles in the project. Including 7.36 billion rubles from the RF Investment Fund and 17.1 billion rubles from private investors.