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Foreigners will not gain control over strategic deposits - govt.

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Foreign investors and Russian companies owned by them will not be able to establish control over federal strategic deposits in Russia, a government source said Tuesday.
MOSCOW, January 30 (RIA Novosti) - Foreign investors and Russian companies owned by them will not be able to establish control over federal strategic deposits in Russia, a government source said Tuesday.

The government is set to discuss Wednesday amendments to the law on mineral resource extraction and the participation of nonresidents in the capital of Russian strategic enterprises.

The bill says nonresidents and "some Russian residents controlled by foreign organizations... will not be admitted to auctions held by Russia's Natural Resources Ministry for strategic deposits."

According to the source, they will also be unable to acquire more than a 50% interest in such deposits by any other method.

The government source said the bill sets out the criteria and procedure for classing deposits as strategic or federal. These will include oil deposits with reserves of above 70 million metric tons (513.1 mln bbl), natural gas deposits holding over 50 billion cubic meters, gold deposits with reserves of more than 50 metric tons, copper deposits with reserves of over 500,000 metric tons, and all continental shelf deposits.

However, not all deposits meeting the criteria will necessarily be classed as strategic, the source said, adding that the list of federal deposits needs government approval.

The draft law does not regulate instances where expected deposit reserves increase after additional prospecting. In cases where deposits are transferred for development under product-sharing agreements, the terms of their operation will be regulated by separate federal laws, he said.

According to the government source, Russia will regulate nonresidents' participation in the charter capital of companies operating in the following nine fields: the development, production and sale of military hardware; the production and use of special hardware; the development and production of aircraft; the production, use and storage of nuclear materials, and the designing of nuclear installations; the development of federal mineral resource deposits; the activities of natural monopolies; the development and creation of special materials and alloys linked to the production of armaments and military hardware; and activities related to the use of infectious disease agents.

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