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Kinross Gold CEO Paul Rollinson says the miner’s relations with the regional government of Chutotka was equally important as those with Moscow.

Kinross Gold Corp.'s new chief executive officer had no speaking role at the Russian Prime Minister's Foreign Investment Advisory Council meeting, but his mere presence a week ago at the table with Dmitry Medvedev said a lot about the company's connections to the Kremlin elite.

Kinross occupies a curious and unusual spot in Russia, not just because its mines, in the country's far east, are closer to Toronto than to Moscow. It is because the Canadian company is the only foreign gold miner in Russia and one of the few foreign companies of any description to operate without local partners. It is also the only Canadian company on FIAC, whose 40 members, from Pepsi to General Motors, represent the country's top foreign investors.

"I believe it's important to have a presence here," Paul Rollinson, who replaced Tye Burt as Kinross chief in August, said on the sidelines of the annual FIAC meeting. "We are definitely on the radar at both the federal and regional government levels."

At the FIAC event, Mr. Medvedev talked about Russia's desire to attract more foreign investors. He needs them to modernize an economy whose industries rumble along like an old steam train compared to their Western, Chinese and Japanese equivalents. The efficiency drive is all the more crucial because Russia faces more competition as it steps into the global market. After a 19-year struggle, it just joined the World Trade Organization and is now trying to squeeze into the rich countries' club, the Organization for Economic Co-operation and Development.

Foreign investment in Russia is climbing, but is nowhere near its pre-2008 peak. Blame the economic troubles in Europe and the United States, the dead hand of Russia's bureaucracy and regulatory regime, and corruption.

Under Mr. Burt, Kinross took a huge risk on a gold deposit called Kupol – 10 time zones from Moscow – and turned it into a crucial piece of the company's worldwide presence, defying predictions it would get eaten alive by bureaucracy and corruption.

Today, Kupol represents an outsized presence in Kinross's nine-mine portfolio that stretches from Mauretania in western Africa, where it owns the huge Tasiast mine. Kupol has produced more than 3 million ounces since 2008 and is on target to produce as much as 565,000 ounces this year. The underground mine represents 22 per cent of the company's total production and about a third of its cash flow.

Next year, Kinross will open another mine, 85 kilometres from Kupol, called Dvoinoye. In the first three years, Dvoinoye's annual production is expected to range from 215,000 to 250,000 ounces.

The investment in the Kupol and Dvoinoye projects is expected to reach $2-billion (U.S.), making Kinross one of the biggest foreign investors in Russia in any industry.

How did Kinross make a splash in a country where others fear to tread?

Company and Russian government officials say it had no magic formula. It ground its way through the regulatory and development process with dogged tenacity, figuring Russia was a long-term investment that required long-term patience.

But Kinross also ensured its government connections were impeccable, to the point that Kinross has been able to influence government resources policy. Crucially, it became the first foreign company to win the right to own 100 per cent of a "strategic" resource. "Kinross is showing that foreign companies that want to make money in the Russian market can do so," said Sergey Belyakov, Russia's deputy minister of economic development.

Kinross bought Kupol in 2006. While it was developing the mine and constructing all-weather roads, it was also building a Moscow presence for its government, legal and public relations activities. In came Lou Naumovski, a Macedonian-born Canadian and former employee in the European Bank for Reconstruction and Development. The vice-president in charge of the Moscow office is fluent in Russian and well connected in many parts of Moscow society .

Mr. Naumovski said Kinross's success in Russia is due to "long, boring hard work." But in addition to joining FIAC, sponsoring charities and the well-regarded New Economic School, it also commissioned a "White Paper" on mining development that government resources officials have taken seriously.

Mr. Rollinson said Kinross's relations with the regional government of Chutotka was equally important as those in Moscow. When Kinross bought Kupol six years ago, Chutotka was the project's 25-per-cent partner and the mine would soon represent 30 per cent or more of local economic output. Kinross had to be especially careful to ensure that jobs were created – the Kupol and Dvoinoye mines will employ 2,200 when full output is reached – and that profits were not volatile, so that the Chutotka government could plan its budgets.

It worked and Kinross was able to buy out the government, allowing it to make mine decisions faster. While there is some risk that the government will seek a new agreement, given the sharp rise in the price of gold since the deal was done in 2010, Kinross officials say there is no sign of unhappiness among local government officials.