RUSSIAN OFFICIAL EXPLAINS NEW RULES FOR MINING THE NATION'S STRATEGIC RESERVES

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MOSCOW, April 14 (RIA Novostti) - Valentin Stepankov, Deputy Minister for Natural Resources of Russia, has explained new rules for mining the nation's strategic reserves to John Brodman, Deputy Assistant Secretary for International Energy Policy at the U.S. Department of Energy, the Natural Resources Ministry reports in a press release.

Specifically, Stepankov spoke about restrictions to be placed on foreign access to Russia's mineral wealth. Under the new rules, Russian mineral reserves shall be open for development solely to legal entities registered in the Russian Federation, including joint ventures.

Foreign companies mining Russian deposits on license or under a product-sharing agreement will have their rights retained. Outside investors prospecting for reserves on licenses granted before the enactment of the new rules will be allowed to go ahead with development, should they discover an untapped deposit.

Of Russia's many mineral deposits, six have been designated as having strategic importance as guarantors of national and economic stability.

The list of such strategically important deposits is to be updated and released by the Russian government before contracts for their development open to bidding. Procedures and conditions for awarding contracts for the development of deposits listed as strategic shall be placed into the public domain, along with all bidding restrictions.

The rules are expected to go into effect in the spring of 2006, Stepankov said.

Brodman believes that in the long term, the new regulations will make it possible for Russia to restore investor confidence and encourage more investment from the outside.

The West respects Russia's sovereign right to develop its natural resources as it sees fit, the U.S. official pointed out.

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