Metals and Minerals Mining in Russia

With the Oil and Gas Industry being so dominant in Russia it could be easily forgotten that Russia is a major player in the Mining of Metals and Minerals. Russia’s Metals mining industry is 2nd only to the Oil and Gas Industry in terms of production and overall export value. Unlike the Oil and Gas Industry in Russia the Mining of Metals and Metals production is dominated by Private companies with two Russian companies amongst the top 10 steel producers in 2010. Overall the Metals Mining Industry accounts for 15% of the value of Russia’s total exports with raw metals and Aluminium being the main export products.

In Russia the Mining and Metals Industry consists of iron and steel, aluminium, precious metals such as Gold, Silver, Platinum and also minerals and base metals such as lead, zinc, copper, nickel and tin. Russia has the world’s largest proven reserves of Iron Ore but it is only the 5th in the world for Iron Ore production it lags behind it’s BricPartners of China, Brazil and India with only Australia ranked at 2nd for Iron Ore production separating these 4 Bric nations, Russia is 4th in the world for steel production. Russia also has plentiful reserves of manganese, diamonds, phosphates, chromium, copper, titanium, palladium, rhodium and tungsten. Russia is able to mine both industrial and gem quality diamonds and has possibly some of the world’s largest reserves. Russia is the world’s sixth largest Gold producer with its Bric Partner China being the world’s largest.

Russian Steel producers tend to be vertically integrated in terms of controlling the whole supply chain from owning the Mills, to the iron ore mining facilities to also control the coal mines to fuel their furnaces. This enables Russian steel producers to have a far greater control over their whole business. An off shoot for some producers is that they can also supply power and energy as part of their business. Amongst the top five metals producers in Russia 60% of their revenue is earned from the steel industry, 22% from Nickel and 18% from Aluminium. Russia’s leading iron ore producer is Metalloinvest which ranks 4th in the world with the leading iron producing company being Vale from Brazil. Russia has the world’s leading nickel producing company Norilsk Nickel which accounts for nearly 20% of the world’s total output of Nickel. Norilsk Nickel is also a major producer of Cobalt 10% globally and Copper with a 3% world share. Russia's steel companies have been able to invest in their industry as many of them have listed on foreign markets such LSE, NYSE and Hong Kong this has led them to receive a large injection of overseas cash to invest in their business and up to date production technology. Russia’s two largest steel producers are Severstal which has produced just less than 17 million metric tonnes of Steel and is the 9th largest producer in the world, 10th globally is Russia’s Evraz with 15.3 million metric tonnes of Steel produced annually.  

 As Russia represents about 12% of the earth’s landmass it’s the largest country in terms of geographic area, Russia has huge potential for other world class finds in terms of Metals and Minerals as there is still a lot of Russia that hasn’t been fully explored yet. Russia is attracting a lot of overseas companies looking to invest in Russia’s metal and minerals mining industry, with the recent purchase of Russian stated owned Oil company Rosneft in the TNK-BP Joint venture then there is defiantly a more positive attitude from foreign companies looking to make investments in the Russian metals and mining industry.  Russia’s metal mining industry will continue to grow over the next five years by 5+ % what is holding it back somewhat is the lack of modern up to date mining technology what with further investment coming from within and outside of Russia then it won’t be long until the state of the art mining technology will improve efficiency and therefore productivity across the whole Russian Metals Mining Industry. With increased infrastructure spending in Russia and its Bric Partners particularly China then growth in the Metals and Mining sector will continue for the for see able future.

Click here to view our BricPartner movie for the Mining Industry in the Bric region

Disclaimer: This information has been collected through secondary research and BricPartner is not responsible for any errors.