Currently, subsoil plots in Russia are sold at cash auctions: whoever pays the most gets the license. The Supreme Mining Council proposed to the government to abandon auctions and return to competitions.

➡️ What mining industrialists want:
They believe that auctions only benefit large corporations with deep pockets. Small and medium-sized companies cannot break in. Their idea is competitions, where not only money is considered, but also the project itself: what technologies will be used, how many jobs will be created, what the region will gain.

➡️ What Rosnedra responds:
The head of the agency, Oleg Kazanov, did not support the idea. According to him, plots purchased at auction are then developed better—what you pay for is valued more. Plus, the auction is transparent: there is one clear criterion—price, and less room for subjective decisions.

➡️ About the numbers:
• Oil and gas—51 auctions, licenses issued for 22 (54%)
• Solid minerals (ore, coal, etc.)—123 auctions, licenses for 80 (65%)
• But many tenders had only one participant. Real competition was only in 24% of oil and gas auctions and 37% for solid minerals
• In total, auctions brought the budget 26.5 billion rubles

➡️ Why the idea is controversial:
• Russia switched from competitions to auctions in 2008 precisely to eliminate subjectivity—the commission's decision was replaced by a single objective criterion: price.
• "Best technologies" and "benefit for the region" are evaluative categories without clear measurement, unlike price.
• Where not a number but the commission's opinion wins, deals and disputes are inevitable.
• Abandoning the price criterion means direct losses for the budget.​​​​​​​​​​​​​​​​

What this changes for asset valuation:

🔡Auction
At an auction, everything is simple: you calculate in advance the range you are willing to enter and know your ceiling in terms of money. One criterion—price.

🔡Competition
With a competition, it's more complicated: the decision goes to the commission. Now it's not enough to calculate money—you need to come up with an interesting development project, estimate what competitors will offer, and combine everything: both to meet the economics and to win on conditions.

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