Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.
MOSCOW — Kinross Gold Corp.’s new chief executive officer had no speaking role at the Russian Prime Minister’s Foreign Investment Advisory Council meeting, but his mere presence a week ago at the table with Dmitry Medvedev said a lot about the company’s connections to the Kremlin elite.
Kinross occupies a curious and unusual spot in Russia, not just because its mines, in the country’s far east, are closer to Toronto than to Moscow. It is because the Canadian company is the only foreign gold miner in Russia and one of the few foreign companies of any description to operate without local partners. It is also the only Canadian company on FIAC, whose 40 members, from Pepsi to General Motors, represent the country’s top foreign investors.
“I believe it’s important to have a presence here,” Paul Rollinson, who replaced Tye Burt as Kinross chief in August, said on the sidelines of the annual FIAC meeting. “We are definitely on the radar at both the federal and regional government levels.”
At the FIAC event, Mr. Medvedev talked about Russia’s desire to attract more foreign investors. He needs them to modernize an economy whose industries rumble along like an old steam train compared to their Western, Chinese and Japanese equivalents. The efficiency drive is all the more crucial because Russia faces more competition as it steps into the global market. After a 19-year struggle, it just joined the World Trade Organization and is now trying to squeeze into the rich countries’ club, the Organization for Economic Co-operation and Development.
Foreign investment in Russia is climbing, but is nowhere near its pre-2008 peak. Blame the economic troubles in Europe and the United States, the dead hand of Russia’s bureaucracy and regulatory regime, and corruption.
Under Mr. Burt, Kinross took a huge risk on a gold deposit called Kupol – 10 time zones from Moscow – and turned it into a crucial piece of the company’s worldwide presence, defying predictions it would get eaten alive by bureaucracy and corruption.
Today, Kupol represents an outsized presence in Kinross’s nine-mine portfolio that stretches from Mauretania in western Africa, where it owns the huge Tasiast mine. Kupol has produced more than 3 million ounces since 2008 and is on target to produce as much as 565,000 ounces this year. The underground mine represents 22 per cent of the company’s total production and about a third of its cash flow.
Next year, Kinross will open another mine, 85 kilometres from Kupol, called Dvoinoye. In the first three years, Dvoinoye’s annual production is expected to range from 215,000 to 250,000 ounces.
For the rest of this article, please go to the Globe and Mail website: http://www.theglobeandmail.com/report-on-business/international-business/european-business/in-russia-patience-proves-a-virtue-for-kinross-gold/article4627194/