Trends and Outlook

Russia ranks among the top ten countries in terms of mineral reserves, with highly-developed services industry and large-scale engineering production. It is one of world’s most important emerging markets, defined by both its size and its growth potential. The country’s exploration potential is difficult to assess, but there are valid reasons for believing that the known deposits are just a fraction of those to be discovered. Business Monitor International forecast the value of the Russian mining sector to grow to US$259 billion by 2015, even with the global slowdown in demand. Unlike the oil and gas industry, the country’s metals and mining sector is Russia’s largest private industry.

Trends-and-OutlookThe mining industry is strategically important and is one of the most important industries in the Russian economy. Extractive industries taken together constitute 33% of Russia’s GDP and account for 60% of federal budget revenues. Despite the fact that Russia has massive quantities of unexplored and unproved reserves – its potential is hampered by the fact that between 30 – 70% of those reserves are not exploitable in the current economic condition. One of the main reasons for this is the fact that the Russian mining industry is mostly using mining methods and technology that dates from the Soviet period. In order to compete on the global stage, the priority for the Russian mining industry and responsible government institutions in the next decade will be to modernise the operations, increase productivity, invest in new technology and build the infrastructure required to bring new projects and raise the efficiency of production, as well as to create a more stable climate to support the investment into the sector. The other trend that will shape the development of the industry will be increased globalisation and
internalisation of the key players, with western companies entering Russia and the Russian mining champions focusing more on the West. There
are plenty of opportunities for international companies especially services and equipment suppliers, mining companies interested in exploring
investment opportunities in Russia, particularly in precious metals, as well as representatives of capital markets and banking industry.

Facts and figures 

• According to some estimates, Russia accounts for almost 14% of the world’s total mineral extraction.
• Russia was the world’s third-largest gold- producing country in 2013, yielding a record 8.14Moz of gold.
• Russia produces approximately 15% of the world’s iron ore and over 20% of world’s nickel.
• Russia is a world leader in both natural diamond and artificial diamond production.
• Russia holds the world’s second largest recoverable coal reserves (estimated some 200 billion tons) and is the world’s third largest exporter of black coal. The Russian programme for the development of the coal industry provides for an increase in output from 334 tonnes in 2011 to 430 million tonnes in 2030.

Business opportunities

There are plenty of opportunities for international companies especially services and equipment suppliers, mining companies interested in exploring investment opportunities in Russia, particularly in precious metals; representatives of capital markets and banking industry.

The key areas requiring international expertise:

• mine project management
• mining project finance
• mining and infrastructure investment
• upgrading of processing/smelting facilities
• mine safety and rescue
• education and training for the mining industry
• cold climate drilling
• vehicle and extraction equipment
• underground communications systems
• mobile transport for underground mining
• mining logistics solutions
• directional drilling
• mine planning
• mining software

 

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