Problems of investing in geological exploration

Abstract

Russia has developed a predominantly raw-material way of industry and economy, and the created infrastructure and production potential are focused primarily on the basic industries, i.e. extraction, processing and further processing of mineral resources, the last 5 years the volume of mineral production is replenished by geological exploration only by 40-60%. Depletion of the created reserve and falling below the critical level of technological and intellectual capacities of geological exploration and related industries actualizes the problem of attracting investments not only because of the instability of the economy as a whole, but also in connection with the specifics of subsoil use: a high degree of risk exploration, a long payback period of investments made, high stock- and capital-intensive process, the degree of equipment wear, which is almost 60 %, a chronic lack of circulating assets. Cooperation with international financial organizations was aimed at creating favorable conditions for private investor. Foreign investors, as well as domestic ones, in the majority of cases are interested, first of all, in raw material regions, where they can quickly increase the capital. The IBRD and EBRD are the largest creditors of the Russian fuel and energy complex. Without serious investments, the exploration industry may stagnate for a long time.