From Tourism to Mining
A tenth of the Arctic's investment projects have already been implemented6 december 2022
As of today, AZRF residents have successfully implemented every tenth investment project announced as part of the application process for resident status. 7.8% of the total funds planned for the projects have been contributed by investors so far. A total of 542 projects totaling nearly RUB 820 bn are currently being carried out in the AZRF. 64 bn of this total have already been committed to specific initiatives. The Far East and Arctic Development Corporation's (FEDC) director general Nikolay Zapryagayev, made this announcement on December 1.
The FEDC reports that Arctic investors typically carry out projects in sectors like logistics, tourism, and the catering industry. Industry is the most capital-intensive but also the most lucrative sector.
The Murmansk Region led the group in terms of both the quantity of projects and investment volume. There are 180 projects being implemented in the region with a total investment portfolio of over RUB 150 bn as of December 1. 8 additional residents will contribute over RUB 163 billion to the ASEZ Stolitsa Arktiki in the meantime.
The majority of projects in the Murmansk Region are in the transportation and logistics (14%), services (16%), and tourism (36%) sectors. The mining sector is the one with the highest capital requirements. In October 2021, Fyodorovo Resources became one of the principal AZRF residents. Its project to develop Europe's largest deposit of platinum group metals will require an investment of RUB 60 billion.
In the Murmansk Region, AZRF residents have already established a fish processing plant, an eco-factory for recycling plastics, mining operations, service centers, transport and logistics companies, restaurants and cafes, medical facilities, and glamping sites.
This demonstrates the success of benefits and incentives system created for the Russian Arctic Zone by the package of federal laws on state support for commercial activities in the AZRF in 2020. Investors who qualify for AZRF residency can lower their income and property taxes as well as their insurance premiums. The state budget covers the cost of bank loan interest rates. Land plots are assigned and customs formalities are completed in a streamlined process.
The Arkhangelsk region, where 160 Arctic projects totaling RUB 128 bn have been declared, comes in second by the number of projects and investment volume made by AZRF residents. Today's volume of attracted investments has already surpassed RUB 10 bn, according to Aleksey Alsufyev, head of the government of the Arkhangelsk Region. In the past two years, 1,400 jobs have been created and 19 facilities have been put into operation in the Arctic portion of the region.
Pervaya Gornorudnaya Kompaniya JSC is carrying out the biggest investment project in the Arkhangelsk region. It plans to develop the Pavlovskoye lead-zinc ore deposit on Yuzhniy Island of the Novaya Zemlya archipelago, setting up a mining and processing facility there. The project investment will amount to over RUB 52 bn, and it will create 868 new jobs.
The Pavlovskoye deposit is expected to yield about 15,000 tonnes of silver-laced lead concentrate and 120,000 tonnes of zinc concentrate annually. Asia will serve as the products' primary market.