Diamond Mining in the Arctic: Influence of Industrial Potential on Social and Economic Systems

Abstract

In conditions of market, the relations between local authorities and subsoil users are poorly developed. The problem of the reaction of diamond mining companies’ activities to the budgetary process of the resource region is investigated insufficiently. A high degree of production costs increase in the industry of the Arctic regions determines the possibility of industrial projects development only for highly liquid productions, one of which is the commercial mining of natural diamonds. The industrial potential of the diamond mining companies of the Arctic was assessed on the base of a set of quantitative indicators. Macroeconomic factors influencing the sale of diamond products on the world diamond market are highlighted. The proposed methodological approach to assessing the industrial potentials of the companies allows conducting a comparative analysis of their influence on social sphere. The sources of the initial data for the quantitative assessment are the annual reports of the companies, i.e. the time series of data based on the period from 2015 to 2016. As a result of the research, it was determined that the industrial potential of diamond mining companies makes a similar contribution to the social and economic development of Anabar, Bulun, Olenek and Zhigansk municipal districts of Yakutia. Analysis of production and financial capacity has shown that there are reserves for increasing the social and environmental costs.