Zabaikalsky Krai Investment opportunities

2

ZABAIKALSKY KRAI 3 INVESTMENT POTENTIAL 7 COOPERATION RUSSIA-SOUTH KOREA 15

CONTENTS

ZABAIKALSKY KRAI

o General information o Transport o Production o Agriculture

o Education and human resources

o International economy

4 GENERAL INFORMATION Zabaikalsky krai

Chita-Khabarovsk Irkutsk – Ulan-Ude – Chita Chita – Zabaikalsk

Geography of the region

S 43 189 ha

Population

1,07 mln. people

А350

АН30

АН6

2 RAIL ROADS: Trans-Siberian railway Baikal-Amur Mainline International airport

Мoscow-Chita: 2 flights per day

TRANSPORT INFRASTRUCTURE

THE IRKUTSK

REGION

SAKHA

REPUBLIC

THE AMUR

REGION ZABAYKALSKY

KRAI

THE REPUBLIC

OF BURYATIA

SKOVORODINO

CHARA

MOGOCHA

BUKACHACHA

CHERNYSHEVSK SRETENSK

SHILKA

NERCHINSK

BORZYA ZABAYKALSK PETROVSK-

ZABAYKALSKY

ULAN-UDE

IRKUTSK

CHITA

C H I N A

M O N G O L I A

5 GENERAL INFORMATION Zabaikalsky region

Northern Eurasian corridor

Moscow

10

day

s 4

$ –

1 к

g

Moscow

Chita Hong Kong

7 d

ays

13

$ –

1 k

g

7 d

ays

10

$ –

1 k

g

Vladivostok

Chita Hong Kong

Trans-Siberian railway

Federal highway

Baikal-Amur Mainline

10

day

s 1

0 $

– 1

kg

Hong Kong

6 EDUCATION HUMAN RESOURCES

Annual number of graduates:

2311 people

Main educational institutions in Chita: 1) Zabaikalsky Governmental University 2) Branch of the State University of Communications - Trans-Baikal Institute of Railway Transport 3) Trans-Baikal Agrarian Institute - a branch of the University. A.A. Ezhevsky

Average salary

34 000 rur

Population Chita:

350 thsd. people

Zabaikalsky region:

1,07 mln. people

In 2018 employed by profession

665 of people

Main professions: o сonstruction o railway o auto industry o electro and Heat energy o applied geology o mining o oil and gas business and geodesy o agriculture, forest

Zabaikalsky region

7 PRODUCTION AND AGRICULTURE

Gross grain harvest 108,2 thsd. tonn

Vegetable production 31,6 thsd. tonn

Potato production 165,5 thsd. tonn

mining

manufacturing industries

other

PRODUCTION STRUCTURE Agriculture indicators

gross agricultural output:

21620,2 mln. rur

Zabaikalsky region

Favorable conditions FOR INVESTMENT

9

ACTIVITY

FOREIGN ECONOMIC

the foreign trade turnover of the Zabaikalsky krai in 2017 amounted to

$ 876,5 mln

The volume of export operations amounted to

$ 286,9 mln

The volume of import operations amounted to

$ 589,6 mln

mineral products (in total exports):

74,8 %

wood and pulp and paper products (share)

14,5% foodstuffs 44,9 % engineering products 23,5 % chemical industry products 14,5 %.

Import

10 INDUSTRIAL PARKS

INDUSTRIAL PARK IN KRASNOKAMENSK

STATUS: Territories of priority social and economic development Total area : 80 ha Location: 110 km from г. Manchuria

(China's main northern land port) All engineering infrastructure Electricity rate: 1.18 rur. / Kw, heaat – 673 rur. / Gcal,

INDUSTRIAL PARK IN MOGOITUI Brownfield Total area: 5 500 m2 All engineering infrastructure

Krasnokamensk

Mogoitui

Chita Logistic Hub

Chita

THE IRKUTSK

REGION

SAKHA

REPUBLIC

THE AMUR

REGION ZABAYKALSKY

KRAI

THE REPUBLIC

OF BURYATIA

SKOVORODINO

IRKUTSK

ULAN-UDE

PETROVSK-

ZABAYKALSKY

ZABAYKALSK

C H I N A

M O N G O L I A

CHITA

PRODUCTION AND LOGISTIC COMPLEX

11

CHITA LOGISTIC HUB

65 000 м2

Main building

2700 TEU container site

2500 м2

offices

40 га total area enclosed with a fence video surveillance system Asphalt road

1 км to the federal highway M-55 Moscow-Vladivostok railway access roads

50 Мw power plant capacity availability of all necessary communications

Сhita customs

On

th

e te

rrit

ory

4 k

m

9 k

m

51

5 k

m

from railway tracks of Trans-Siberian Railway

to international airport Kadala

to the China border

GENERAL PLAN 12

CHITA LOGISTIC HUB

SPECIAL INVESTMENT CONTRACTS 13

Tool to support industry development in the Russian Federation provided for № 488 Federal Law from 31.12.2014 ”About the industrial policy in the Russian Federation”. SIC – An agreement between the investor and the Russian Federation or its subject in which is fixed: • Investor obligations to create / modernize industrial production / introduce • Best available technology in due time • Obligations of the Russian Federation or its subject to guarantee the stability of tax regulatory conditions and

provide incentive measures and support. The benefits of concluding SIC Accelerated and simplified procedure for obtaining the status of "Russian manufacturer”

0 % - federal and regional income taxes

Free access to government contracts The opportunity to become a supplier of products manufactured under SIC, out of competition Conditions

750 mln. rur. - minimum investment to make SIC

Validity

The term of the project on the operating profit + 5 years, but not more than 10 years

PREFERENCES 14

FOR INVESTMENT PROJECTS

PREFERENCES TERRITORIES OF PRIORITY DEVELOPMENT

FREE PORT VLDIVOSTOK REGIONAL INVESTMENT PROJECT

REGIONAL PROJECT/Priority investment project

Income tax 0-5% First 5 years

0% First 5 years

10% First 5 years

13,5%

Property tax 0% 0% 5 years

1,65 % 1,65%

Land tax 0-5% 3 года

0% 5 years

- -

Payments to extrabudgetary funds

7,6% 7,6 % - -

Mineral Extraction Tax Coefficient

0-0,8% During 10 years

- 0-0,8% During 10 years

-

Customs benefits free customs zone regime free customs zone regime - -

Other Accelerated VAT Refund Simplified visa regime. Reduced administrative burden

- Renting land without bidding at a reduced rate. Preferential rental property

GOVERNMENT SUPPORT

15

Reduced income tax rate from 17% to 12.5% For regional investment projects up to 10%

Exemption from payment property tax

Subsidizing interest rates on loans and infrastructure

Subsidies in the course of activities

Use of state property as collateral

Provision of land without bidding

Search of business partners

Organization of reference of negotiations

Suppliers search, sales markets

Joint venture creation

SOUTH KOREA- RUSSIA

PERSPECTIVES OF COOPERATION

DINAMIC OF GROUTH world consumption of minerals

RUSSIA AS A LEADING COUNTRY SUPPLIER OF RAW MATERIAL RESOURCES IS A GREAT CONSUMER OF CAREER AND SPECIAL TECHNOLOGY

17

Renewable Nuclear Fossils

Power consumption in terms of sources

25000

20000

15000

10000

5000

0

19

80

19

85

19

90

19

95

20

00

20

05

20

10

20

15

20

20

NEED FOR UPDATE SPECIAL EQUIPMENT

70%

As a result, there is a high need for fleet renewal and increase in the productivity of mine equipment

MINERAL DEPARTMENT MAP

IN DIFFERENT REGIONS

1 Krasnoyarsk region 379 7375 2 Irkutsk region 403 5900 3 Saha Republic 1104 14 750 4 Amur region 551 885 5 Khabarovsk region 190 295 6 Primorsky Krai 211 1475 7 Zabaikalsky region 582 472

Total amount acting of enterprises

Overall need in the technique

1

2

3

4 5

6 Irkutsk

Yakutsk

Krasnoyarsk

Blagoveshchensk Khabarovsk

Vladivostok

CHITA

Кrasnoyarsk

21

00

km

Irkutsk

11

00

km

Yakutsk

21

00

km

Blagoveshensk

15

00

km

21

00

km

Khabarovsk

29

00

km

Vladivostok

18

Nearby regions:

MINERAL DEPARTMENT MAP

Zabaikalskiy krai

Apsatskoe 96,6 21 Udokanskoe 26,7 460 Darasunskoe 1104 14 750 Haranorskoe 551 885 Nikolskoe 190 295

Production useful fossil

Overall need in the technique

19

The name of the mining deposit

Udokanskoe

Apsatskoe

Darasunskoe

Haranorskoe

Nikolskoe

CHITA

Irkutsk

Yakutsk

Krasnoyarsk

Blagoveshchensk Khabarovsk

Vladivostok Chita

20

IN AGRICULTURAL AND FOREST SPECIAL EQUIPMENT

Need for agriculture special equipment

747thsd. items

need for forest Special equipment

33 186 items.

REGIONAL NEED

Корея- Россия

21 NEEDS FOR SPECIAL EQUIPMENT – GUARANTEED SALES

ZABAIKALSKIY KRAI AND NEARBY REGIONS NEED ANUALLY MORE AND MORE SPECIAL EQUIPMENT BECAUSE OF THE FOLLOWING FACTORS:

Very short depreciation due to weather conditions and long distances

The increase in the number of new locations,

The annual increase is about 30

There is a strong government support in terms of updating the special park. technology, because mining is the backbone of the regional economy!

Now ZABAIKALSKIY KRAI

is one of the leaders of Russia in minerals

1 Place on stocks of uranium and molybdenum

2 Place on stocks of copper and fluorite

3 Place on reserves of tantalum and tungsten

6-7 Place on gold reserves

PROJECTS UNDERWAY

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development of one of the largest copper deposits in the world in the Kalarsky district Metalloinvest OJSC 88 mlrd. rur. 25+% 7 920 trillion rubles processing of 36 million tons of ore per year 310 Units

PROJECT DESCRIPTION INVESTOR INVESTMENTS IRR RESERVES PRODUCTION SPECIAL EQUIPMENT PARK

development of coal deposits LLC "SUEK" 23.3 billion rubles 25 +% 13 trillion rubles 3 million tons 150 Units

MASTERING OF UDOKANSKY

COPPER DEPOSIT

THE DEVELOPMENT OF APSAT

COAL FIELD

PROJECT DESCRIPTION INVESTOR INVESTMENTS IRR RESERVES PRODUCTION SPECIAL EQUIPMENT PARK

23

10 million tons of ore OJSC "Norilsk Nickel" 75 billion rubles 2130 2005 – 2018 100 UNITS

PRODUCTION VOLUME PER YEAR INVESTOR INVESTMENTS WORKING RESOURCES TERMS OF IMPLEMENTATION SPECIAL EQUIPMENT PARK

Cultivation of grain crops with the subsequent export to China AO "Breeding plant" Komsomolets " 9.5 billion rubles. 20+% 7,920 trillion rubles 200 thousand hectares of crops 200 UNITS

PROJECT DESCRIPTION INVESTOR INVESTMENTS IRR RESERVES PRODUCTION SPECIAL EQUIPMENT PARK

DEVELOPMENT OF THE BYSTRINSKY DEPOSIT OF COPPER

CULTIVATION OF RAPS, OATS AND BARLEY

PROJECTS UNDERWAY