Russia Remains Difficult Market To Project Finance Precious Metals Mining Project

The Julietta Project demonstrated that well structured Russian mining projects can be financed by commercial banks. However, there are many hurdles along the way and Russia remains a difficult market for sponsors and lenders alike.

Many of the difficulties faced by lenders and sponsors in Russia are not unusual for a project finance transaction in an emerging market. However, due to a legal heritage and culture derived from Russia's communist past, combined with the measures introduced following the Russian crisis in 1998, the solutions to these problems are often more complex, time consuming and, ultimately, more expensive than those found in other jurisdictions.

Some of the difficulties associated with the development and project financing of precious metals mining projects are discussed below.