Rusgeology sees exploration in Russia falling 13% in 2015

MOSCOW, Dec 23 (PRIME) -- Geological exploration company Rusgeology, also known as Rosgeo, expects Russia’s geological exploration market to contract by 13% to 260 billion rubles in 2015 and to fall 11% to 230 billion rubles in 2016, CEO Roman Panov told PRIME Wednesday.

“The market for geological exploration works in Russia exceeded 300 billion rubles in monetary terms in 2014. In 2015, we expect it to fall to 260 billion rubles. Next year, the optimistic scenario shows that the volume will remain flat, but the conservative scenario sees it contracting to 230 billion rubles,” he said.

But the situation is temporary. “Without investments, without implementation of large geological exploration projects, stable functioning of production is impossible. So we hope that until 2020 the Russian market will rise to 324.4 billion rubles…But we should also be ready in case the market stays at the 260 billion rubles,” he said.

State financing of geological exploration will fall 20% to 28.4 billion rubles in 2015, but Natural Resources and Environment Minister Sergei Donskoi said previously that in 2016 state financing will rise 17.8% to 33 billion rubles.

Panov also said the company is studying possibilities to compensate the 2015 exploration fall in 2016.

“In fact, our specialists forecast a certain decrease in the volume of geological exploration this year and they are working on compensating it next year,” he said.

The sector’s underfinancing since the beginning of 1990s has led to a technological lag, an outflow of specialists, an increase of workers’ age, and a lower popularity of mining and geological careers. Now the situation is improving gradually. The state tracks the sector’s problems and acknowledges its strategic importance, he said.

“We still plan to engage in research and development actively to overcome the technological gap. We have implemented a technical re-equipment program. We are also actively working on solutions of problems with personnel in geological exploration.”

(71.1211 rubles – U.S. $1)

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