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EFFECT OF A PUBLIC-PRIVATE PARTNERSHIP ON INVESTMENT ATTRACTIVENESS OF GOLD MINING PROJECTS



At the present time, many gold mine projects lack investors for small and low-grade ore deposits. Application of innovative technologies of mining and processing is insufficient for the improvement of the investment attractiveness of a project. The governmental support is also required. A public–private partnership in the sphere of subsoil use is implemented as the creation of territories of advanced social and economic development. Residents in such territories are granted considerable tax remissions. The subject of this research is the gold mining project in the Far Eastern Region of Russia. Two scenarios of the project implementation are discussed—with and without the public–private partnership. In each scenario, money flows are modeled and economic efficiency indexes are determined. The analysis of the efficiency indexes shows that the gold mining projects become more attractive for investors in case of the public–private partnership: profit of industrialists and return on investment grow, efficiency of investments rise and payback period shortens. On the other hand, tax revenues decrease largely, and the public revenue is much lower than the private income. The public–private partnership decreases tax revenues but promotes attraction of private money resources in mining projects and stimulates private initiative. Furthermore, new jobs are created, employment grows, earnings are stabilized, infrastructure projects are effected, and, consequently, social-and economic development of a region goes to a next level.

: 1
2019
ISBN: 0236-1493
: 338.2:622
DOI: 10.25018/0236-1493-2019-01-0-200-207
Authors: Kushnir M. A., Kushnir V. Yu.

Authors' Information:
Kushnir M.A., Candidate of Economical Sciences,
Assistant Professor, e-mail: kushnir.marina@rambler.ru,
Kushnir V.Yu., Magister,
Institute of Economics and Management of Industrial Enterprises,
National University of Science and Technology MISiS,
119049, Moscow, Russia.

Key words:
Gold mining project, publicprivate partnership, territory of advanced social and economic development.

References:

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