Business Monitor International


Russia Mining Report

Published 08 April 2014

  • 101 pages
 
$1,295.00
Russia Mining Report

BMI View: Despite boasting rich mineral deposits, a mining boom is unlikely to catch up with Russia anytime soon. A growing number of domestic miners will be forced to put the brakes on investment as mineral prices continue to trend lower, while foreign investors struggle to establish a foothold due to restrictive regulations.

We believe Russia's mining industry is set to experience modest growth over the coming years. In line with the dimming outlook in the global mining space, few projects and expansion plans have been announced in Russia over recent quarters. While Russia is home to rich deposits of resources including coal, iron ore, gold and platinum, a mining boom is unlikely to catch up with the country anytime soon. Apart from a gauntlet of bureaucratic hurdles, the escalation of cash costs and softening of commodity prices will see a growing number of miners scaling back their ambitions over the coming quarters.

Headwinds Ahead
Russia - Select Mining Production (% chg y-o-y)

However, we believe Russia's coal mining industry holds great promise for rapid growth over the long term. President Vladimir Putin plans to spend an estimated USD123bn developing the country's coal reserves, alongside major investment into logistics and engineering capacities. Our forecast for thermal coal prices to continue a secular uptrend over the coming years will be a boon for Russian coal miners. In particular, we believe Russian coal miners will benefit from rising coal demand from Asia as a handful of infrastructure projects are underway to facilitate greater coal trade flows.

Crucially, the Russian government will continue to maintain a strong influence on the mining industry. For instance, total palladium supply from Russia is complicated by palladium sales from government stockpiles, which are very large relative to primary production. Foreign firms are also restricted in investing in the industry. Companies seeking to develop a 'strategic resource', defined as a...

Table of Contents

BMI Industry View
7
SWOT
9
Market Overview
11
Table: Russia - Mining Industry Value & Production Forecasts
13
Industry Forecast
14
Table: Russia - Largest Platinum Projects
15
Table: Russia - Platinum Production Forecast
17
Gold: Regulatory Hurdles To Restrict Growth
17
Table: Russia - Gold Production Forecasts
19
Coal: Kuzbass To Underpin Production Growth
19
Table: Russia - Coal Production Forecasts
23
Nickel: Subdued Growth Ahead
23
Table: Russia - Largest Nickel Projects
25
Table: Russia - Nickel Production Forecasts
26
Palladium: Production To Remain Flat
26
Table: Russia - Largest Palladium Projects
28
Table: Russia - Palladium Production Forecasts
28
Iron Ore: Little Impetus For Output Growth
28
Table: Russia - Largest Iron Ore Projects
30
Table: Russia - Iron Ore Production Forecast
34
Industry Risk Reward Ratings
35
Risk/Reward Ratings
35
Table: Mining Risk/Reward Ratings
35
Russia: Mineral Wealth Fails To Hide Risks
36
Kazakhstan: Weak Infrastructure Restrains Growth Potential
36
Germany, Czech Republic And Slovakia: Few Rewards, Few Risks
38
Ukraine: Corruption And Unexplored Potential
39
Regulatory Development
40
Tax Regime
41
Corruption To Remain Key Concern
42
Table: Table: Political Overview
42
Commodities Forecast
44
Commodity Strategy
44
Steel: Weakness To Continue Over Long Term
45
Aluminium: Record Stockpiles A Substantial Downside Risk
47
Copper: Continued Weakness
49
Lead: Autos Sector Offers Downside Cushion
50
Nickel: Struggling To Find Support
51
Tin: Outperforming A Weak Field
51
Zinc: Tougher Ride In H213
52
Table: Select Commodities - Performance & BMI Forecasts
53
Table: BMI Commodity Strategy
53
Competitive Landscape
55
Table: Russia - Largest Mining Projects
55
Table: Russia - Key Financial Data For Select Listed Mining Companies
56
Company Profile
57
SUEK
57
Table: SUEK - Financial Results
60
Norilsk Nickel
61
Table: Norilsk Nickel - Financial Data
65
Polyus Gold
66
Table: Polyus Gold - Financial Data
68
Global Industry Overview
69
Global Mining Outlook
69
1
69
Table: Recent Tax Increases
69
2
70
3
71
4
72
5
73
6
75
7
75
Regional Overview
76
1
77
2
78
Table: Major Nordic Mining Projects
80
3
80
4
81
Table: Eastern Europe - Key Gold Projects
82
Methodology
83
Business Environment Ratings Methodology
83

The Russia Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Russia Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Russia.

Key Benefits

  • Use BMI's independent industry forecasts on Russia to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Russia's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Russia.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

Executive Summary

Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Business Environment Ratings

BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2017 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2017 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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