Page 93 - RusRPTOct19

and China) have been able to visit the Kaliningrad enclave on an e-visa since July. Citizens of China, India and 15 other (predominantly Asian) countries have been able to visit the Russia’s Far East Federal District on an e-visa since 2017.
9.1.11 Metallurgy & mining sector news
Alrosa’s rough diamond sales grew 9% m/m to $180mn in August. Rough diamond sales grew m/m, but still came in 36% lower y/y, according to the company. 8M19 rough diamond sales slumped 35% y/y to $1.13bn. The miner said the diamond market continued to face pressure from high inventories in the midstream and seasonally low demand. Going forward, the company has maintained its forecast that demand will restore, once the current excessive inventories decline.
9.1.12 Transport sector news
Russia will change the rules of distribution of one of the most common industrial subsidies - the compensation of transportation costs for exports, channelling the funds mostly to high-value added products, Kommersant daily reported on September 24 citing a decree signed by Prime Minister Dmitry Medvedev. Over half of the RUB14.2bn ($222mn) subsidies for 2019 will be granted to machinery and equipment producers, to shield those from competition with exporters of bulk goods and commodities such as timber and concrete. Currently the latter account for 70% of all subsidies. Under the new rules machinery will get 48% of total subsidies, manufacturing (including chemicals and metals) 45%, and another 7% to other industries (including pharmaceuticals). The subsidy will be capped at RUB0.5bn per company and will be limited by 11% of item's cost, cut from 25% previously. Analysts surveyed by Kommersant agree that transportation costs compensation is more relevant for high-tech industries, but note that cutting the subsidy to 11% could still hurt machinery producers.
● Roads
The system would prevent fast deterioration of roads by overloaded trucks, by imposing automatic fines. Reportedly, the only bidder for the potential RUB100bn ($1.6bn) contract was RT-Invest Transportation Systems (RTITS) of stoligarch Arcady Rotenberg, which previously got the contract on controversial truck levy system Platon.
● Trains
Russian Railways managed to keep railway-transported volumes flat y/y at 108mnt in July 2019, after declines in each of the last three months. The company mainly achieved this by providing 8% discounts for coal transportation to south basin ports. Thus, coal volumes were only 3% lower y/y in July, at 29mnt, after the 6% drop a month ago, despite continued negative coal market conditions. Gondola cargos lost 1% y/y to 61mnt, with metals 3% lower y/y at 20mnt. Amid worsening gondola market conditions, daily gondola lease rates corrected 5% to RUB1,800/day after the peak of RUB1,925/day earlier this year. However, the second largest cargo, oil, rose 1% y/y,
93 RUSSIA Country Report October 2019 ww.intellinews.com