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Eurasian Business BriefingRussia’s Far East

Evraz considers offers for Nakhodka Sea Port in effort to reduce debts

Nakhodka Sea PortIn an attempt to reduce its mounting debts, the Russian steel and mining conglomerate EVRAZ has put its facilities at the Far Eastern Nakhodka Trade Sea Port up for sale, it was reported yesterday, and has already received offers from around a dozen Russian, Kazakh and Chinese companies. The company has valued the port at $260m.
NakhodkaFounded in 1947 in Nakhodka Bay some 200km south-east of Vladivostok, the port is on one of the easternmost spurs of the Trans Siberian railway and as such is a key staging post for the movement of goods between Asia and Europe. It has the capacity to unload up to 500 rail wagons a day; each of its 16 berths can accommodate vessels of up to 230m in length and 32m in width; and it comes with 300,000m² of warehousing premises. Last year, the port handled 9.2m tons of cargo.
Chinese steel millAn integrated steel, mining and vanadium business with operations in the Russian Federation, Ukraine, USA, Canada, Czech Republic, Italy, Kazakhstan and South Africa, the LSE-listed EVRAZ is among the top steel producers in the world, but has been hit by the collapse in the price of steel, largely caused by Chinese over-production. Earlier this year it announced that it was planning to reduce its debt by as much as $1.5bn, but at the time ruled out the possibility of selling off any of its assets. 

 
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Rosneft and ChemChina sign up to giant FEPCO petrochemical JV

Igor Sechin (Rosneft) and Ren Jianxin (ChemChina) June 2016FEPCO: China’s chemical giant ChemChina yesterday agreed to enter into a joint venture with Rosneft to help Russia’s largest oil company move ahead with its plans for the construction of a state-of-the-art petrochemical complex as it looks to capitalise on growing industrial and consumer demand in the Asian markets on its doorstep. CEO Igor Sechin and ChemChina’s Ren Jianxin had (more…)

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Alrosa launches Eurasian Diamond Centre in Vladivostok as Eastern Economic Forum gets under way

Eastern Economic Forum VladivostokAlrosa, Russia’s largest diamond mining operation, launched the Eurasian Diamond Centre in Vladivostok yesterday to coincide with the opening of the second Eastern Economic Forum tomorrow, when representatives from more than 200 (more…)

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China looks set to relocate key enterprises to Russian Far East

Chinese factory worker QingdaoChina is set to move a number of enterprises operating in 12 key sectors to the Russian Far East, Russia’s Ministry for Far East Development announced earlier this week. The sectors concerned include metallurgy, power engineering, (more…)

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Ukrainian refugess to be offered jobs in Far East resettlement programme

Ethnic Russians leave UkraineA proposal put forward by MPs in Russia’s Duma to repopulate the country’s Far East region with Ukrainian refugees has won the approval of the Russian Ministry of Economic Development. The ministry expects some 50,000 jobs to be created in Eastern Siberia over the next five years, many of which (more…)

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Khabarovsk feels benefits of Chinese investment in Russia’s Far East

Khabarovsk

Khabarovsk

Chinese investment in Russia’s Far East now accounts for 45% of all FDI in Khabarovsk and is behind more than 300 enterprises operating there, the Territory’s authorities announced this week. Chinese businesses (more…)

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Russia’s Far East Land Bill altered to allow for collectives

cows in siberiaFar East Land Bill: Alex Galushka, Minister  for the Development of the Russian Far East. yesterday submitted a revised version of the bill that would give every Russian citizen entitlement to take up ownership of one hectare of land in the Far Eastern Federal District to the Duma. The new version of the bill allows for interested applicants to club together to form collectives. It also specifies that these sites should be “at a distance of 10 km from the borders of the village with a population of more than 50 thousand, or at a distance of 20 km from the borders of the village with a population of over 300 thousand.” Initially proposed last year, the bill is an attempt to reverse or at least stem the steady exodus of people from the region which at 1.1km per square kilometre has a lower population density than Australia, Finland or Canada.
The law is expected to come into force in July next year. 

(more…)

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Free Port of Vladivostok secures first investors as Zarubino gets the OK

SlavyankaThe Free Port of Vladivostok has attracted its first investors since it secured SEZ status this summer, in the form of a $78.2m 182-room five-star hotel at Slavyanka. Located 170km south of Vladivostok, the hotel will be developed by the Sino-Russian Pacific Ocean Investment Company, a joint venture between Russia’s Transit-DB Holding and two Chinese companies – Zhun Gun Sin and the High Way construction firm. The hotels should be ready to open its doors within two years, Russia’s Deputy Prime Minister Yuri Trutnev said today.
Zarubino Port locationHe also confirmed that approval had been given for the joint Sino-Russia $100m expansion of Zarubino port close to the border between the two countries, designed to give shippers better access to and from Northeast Asia.
 

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First casino opens in Primorye gambling zone

Primorye Gambling Zone

Primorye Gambling Zone

The first casino in the far eastern Primorye gambling zone – that is being billed as Russia’s answer to Macao – opened for business this week. Owned and developed by G1 Entertainment, The Tigre de Cristal casino is the largest in Russia so far and is expected to create new jobs and boost tourism and economic growth in the region, Corporate Finance and Strategy Director Eric Landheer said at the opening ceremony.
The decision to create the Primorye gambling zone close to Vladivostok was taken by the Russian government in 2009, when it outlawed gambling in Russia with the exception of six special zones. So far, only two of those zones — Azov-City in Krasnodar and Siberian Coin in Altai — have managed to turn their special status into money-making entertainment complexes, but Primorye’s proximity to the Asian markets has helped it to attract major Asian investors such as Melco and the Malaysian NagaCorp Ltd. Other investors in the project also include local Royal Time Primorye and Diamond Fortune Holdings Prim.
As well as the casino, the 620-ha gambling zone will also include 15 hotels, 12 guest villas, a yacht club, a multifunctional trade and exhibition centre, and several cinemas. The project is due to be completed in 2022. Four investment contracts worth $1.75bn have been signed so far, according to the authorities.

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Vladivostok diamond exchange to open next year

AlrosaVladivostok diamond exchange: Plans to open a diamond exchange in the Far Eastern port of Vladivostok by the end of 2016 are ‘absolutely real’, Deputy Prime Minister Yury Trutnev said today, as Russia looks (more…)

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Zvezda shipyard to get $900m upgrade

Zvedza shipyard

Zvedza shipyard

The Kremlin yesterday instructed Rosneftegaz to invest $900m in the construction of new facilities at the former military Zvezda shipyard in Russia’s Far East. Moscow is hoping that the renovation (more…)

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China on side with Putin’s plan for Far East development

China's Vice Premier Wang Yang

China’s Vice Premier Wang Yang

Far East development: Russia’s plans to plough investment into the country’s Far Eastern territories is in line with Chinese plans for the region, Chinese Vice Premier Wang Yang told delegates at the the Far East Economic Forum in Vladivostok on Saturday, “The …strategy (more…)

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Putin pledges help for Far East infrastructure to bring in FDI

Putin at Far East Economic ForumFar East infrastructure: Russian President Vladimir Putin this week vowed to turn the country’s Far East into a “locomotive of the world economy”, to encourage its development and to attract inward investment by reducing transport and energy costs. (more…)

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Rosgeo discovers new coal deposits on Sakhalin Island

Sakhalin IslandRussia’s state-run Rosgeo this week announced that it had discovered significant new coal deposits on Sakhalin Island off the country’s Far East coast. The deposits were found in Yuzhno-Berezovsky and lie outside of the mammoth Sakhalin integrated oil and gas development area, the company confirmed.
Although Russia (more…)

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US adds Yuzhno-Kirinskoye oilfield to sanctions list

Yuzhno-Kirinskoye oil and gas field

Yuzhno-Kirinskoye oil and gas field

Gazprom

The US has added Gazprom’s Yuzhno-Kirinskoye oil and gas field in the Sea of Okhotsk to the list of Russian operations and individuals sanctioned after Moscow’s annexation of Crimea and subsequent events in Ukraine. 
The move means (more…)

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Shell looks to acquire Sakhalin-3 stake through asset swap

In Sakhalin Islandan attempt to consolidate its presence in Russia’s oil and gas sector, Royal Dutch Shell has opened discussion with Gazprom about the possibility of swapping one of its international energy assets for a stake in the Russian company’s Sakhalin-3 oil and gas development in the North-West Pacific.
“Russia is sitting (more…)

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Chinese consider putting up cash for Lena bridge

Lena BridgeLena bridge:  A group of Chinese companies including the China Railway Construction Corporation, China Development Bank (CDB), Hua Tsing An Zu and three other construction companies are considering putting up the money to build a bridge across the river Lena that would give it access to the Trans-Siberian railway.
“We are extremely interested in the project,” Hua Tsing An Zu Chairman Mr Chzu Chun Yuiwe, said this week. “By combining global technologies, and Chinese experience, we could build a bridge in three and a half years.”
The Russian authorities invited tenders for the construction of the bridge last year, but the project was shelved as the economy went into recession and funds were diverted into the development of newly-annexed Crimea.

 
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Russia invites Japan to co-develop disputed Kuril Islands

 
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30m Russians interested in Far East land handout , claim pollsters

Vacant Siberian farmland

Vacant Siberian farmland

The Siberian Times

Around 30 million (mainly young ) Russians, would move thousands of miles to take advantage of the governments’s Far East land handout, according to a poll conducted by the VTSIOM market research company.
The poll took place on the eve of a public discussion about Moscow’s plan to give away one-hectare plots of land in Russia’s Far Easter territories – a radical attempt to reverse a potentially catastrophic population decline in the country’s Pacific Rim and to effect a sixfold increase in inhabitants from 6.4m to 36m.
Under the terms of the scheme, Russians would be offered land that could be use for farming, forestry or simply for smallholdings. Anybody taking up the offer would be able to sell the plot once they had lived on it and developed it for a period of five years.
Some 28% of those surveyed said they wanted to organise individual self-sufficient homesteads on their land; 19% said they would like to become farmers while 16% said that the land grants was an opportunity for them to change their place of residence, said the press service of the Ministry for Far Eastern Development.

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Russia claims new type of diamond discovered from Tolbachik volcano

Tolbachik volcano

Tolbachik volcano

Lusika33

The Russian Ministry of Science is claiming that geologists have discovered a new type of diamond that was formed during the eruption of the 3,682m Tolbachik volcano on the Kamchatka peninsula two years ago. The diamonds were found in the solidified lava of after Tolbachik erupted in 2012 and are said to look almost identical to synthetic diamonds to the untrained eye. (more…)

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