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 590 единиц

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 “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 “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

INVESTMENT PROJECT EFFECTIVENESS Localization: “Komsomolsk” TPSED Investments in the standard project: mln rubles Productive capacity: 4,5 mln unit Not present value (NPV), mln rub. 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

Labour resource cost advantages Average salary in specialties of the mining industry sector in Kirovsk District is 3 times less than 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 кВ Substation-360: 110/35/10 kW 12,263 MVA free capacity 13,115 MVA free capacity 32,008 MVA free capacity 0,071 MVA free capacity 6,180 MVA free capacity 63,63 MVA

RF Subject strategy determination in congenial investment climate formation Formation conditions for implementation of 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

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