Russia is a major minerals producer, being a global leader in several products, including diamonds, nickel, copper, coal, gold, PGE’s, tin and bauxite. However, since the dissolution of the Soviet Union, Russia has struggled to maintain its ailing mineral industry. Many of its primary minerals are now located outside of the country in other independent CIS states. The reciprocal also applies, as Russia was the main producer of oil and gas supplies to the CIS. This has placed a strain on trade and import/export agreements and as a result, production for most commodities has dropped by as much as 50%.

Domestic demand for Russia’s mineral production has declined due to the major downturn in the Russian economy, devaluation of the rouble as well as a waning defence industry (responsible for the consumption of several metals). This has resulted in Russia turning to export markets. Apart from a few companies in the PGE and nickel sector (Norilsk Nickel) and perhaps in aluminum, Russia’s minerals production is of a lower grade and quality, resulting in few companies that can “make the grade” and compete globally. The old Soviet planning system was responsible for developing several low-grade ore deposits in the Soviet Union. In these scenarios, factors such as costs were not employed, as they are in a market based economy. As a result several Russian companies produce a lower quality product (relative to Western production), which does not make Russian mineral products globally desirable.

Although Russia has massive quantities of explored reserves, it is estimated that between 30 and 70% of Russia’s reserves are not exploitable under current economic conditions using mining methods from the Soviet period. In order to turn this around; new technology needs to introduced to exploit these reserves. The old Soviet system did not include market economy costs when calculating ore reserves, therefore necessitating a review of reserve estimations throughout all the former Soviet Union countries.

The most significant mineral producing regions in Russia are located in the Kola Peninsula, the North Caucasus, East Siberia, the Urals and the Russian Far East. These regions host Russia’s massive raw materials base, with reserves estimated at approximately 20 years for iron ore and 10 – 30 years for other non ferrous metals.

Organisations (67)

Evraz Group, JSC Chepetsky Mechanical Plant, JSC Dalur, JSC Khiagda, JSC Malysheva Mines Management, JSC Priargunsky Industrial Mining and Chemical Union, OJSC Polymetal, Polyus Gold Mining Company, Shenhua Group Corporation Limited, Techsnabexport, TVEL Corporation, Almazjuvelirexport, Almazy Rossii-Sakha, Amur Minerals Corp, Angara Mining plc, Celtic Resources Holdings plc, Darasun Gold Mine, Denetsksteel – Iron & Steel Joint Stock Company, Donugol, GNK Consultants

Facilities (35)

Aikhal GOK, Botuobinskaya, Chelyabinsk Tube-Rolling Plant, Darasun gold mine, Dukat, Grib, Istok Alluvial Mine, Jubilee, Julietta, Kalinovskaya Vostochnaya, Khiagdinskoye, Kubaka, Kumroch, Lebidinsky Iron Ore Mine, Lomonosov deposit, Middle-Timan Mine, Mirny GOK, Mnogovershinnoe, Nezhdaninskoye, Nurba GOK

Shaun Bakamoso

Greetings. I'm Shaun Bakamoso, and I'm thrilled to be your guide through the dynamic world of business news in South Africa here at mbendi.co.za. With a passion for staying informed and a keen interest in the ever-evolving landscape of business, I've dedicated myself to providing you with timely, insightful, and comprehensive coverage of the latest developments impacting the South African economy. bakamoso@gmail.com / Instagram