Business Monitor International


Russia Mining Report

Published 08 April 2014

  • 101 pages
  • Instant access to your report online and PDF format through your account library
  • Includes 3 free updated quarterly reports
 
$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 step 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.

Coal Stands Tall
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 US$123bn 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
Industry Forecast
11
Coal: Towards Coking & The East
11
Modernisation Of Coal Sector
13
Exports Shifting From Europe To Asia
14
Constrained By Infrastructure
15
Better Economics For Coking
17
Table: Russia - Coal Production Forecast
19
Gold: Losing Lustre, Modest Growth
19
Polyus Gold To Remain Dominant
20
Table: Russia - Gold Production Forecast
21
Iron Ore: Dragged By Overcapacity In Steel Sector
21
Industry Structure To Remain Unchanged
22
Table: Russia - Largest Iron Ore Projects
23
Infrastructure Developments A Boon
24
Table: Russia - Iron Ore Production Forecast
24
Nickel: Subdued Growth Ahead
25
Table: Russia - Largest Nickel Projects
26
Table: Russia - Nickel Production Forecast
27
Palladium: Few Bright Spots
27
Russian State To Remain Swing Factor
28
Table: Russia - Largest Palladium Projects
28
Table: Russia - Palladium Production Forecast
29
Platinum: Struggling To Head Higher
29
Table: Russia - Largest Platinum Projects
31
Table: Russia - Platinum Production Forecast
33
Industry Risk Reward Ratings
34
Greatest Rewards In The East
34
Table: Mining Risk
Table: Mining Risk
Regulatory Stranglehold In Germany; Rising Risks In The Nordics
35
Corruption & Infrastructure To Remain Key Risks In Russia & Ukraine
35
Weak Commodity Prices Weigh On Rewards
36
Country Highlights
37
Russia: Mineral Wealth Fails To Hide Risks
37
Kazakhstan: Weak Infrastructure Restrains Growth Potential
38
Market Overview
39
Table: Russia - Mining Industry Value & Production Forecasts
41
Regulatory Development
42
Foreign Investors To Find Little Success
42
Tax Regime
43
Corruption To Remain Key Concern
44
Table: Europe - Mining Regulatory Scorecard
44
Table: Political Overview
45
Commodities Forecast
47
Commodity Strategy
47
Steel: Locked In Secular Downtrend
49
Aluminium: US$1,800
Aluminium: US$1,800
Copper: Bearish View In Place Despite Some Recovery
50
Nickel: Despite Recent Gains, Downside Risks Dominate
52
Zinc: Channelling Support
54
Table: Select Commodities - Performance & BMI forecasts
55
Table: BMI Commodities Strategy
56
Commodities Forecast
57
Table: BMI Steel Forecast
57
Table: Steel Data And Forecasts, 2009-2017
65
Competitive Landscape
66
Key Players
66
Table: Russia - Key Financial Data For Select Listed Mining Companies
67
Company Profile
68
Norilsk Nickel
68
Overview
69
Strategy
70
Table: Norilsk Nickel - Financial Metrics
72
Polyus Gold
73
Table: Polyus Gold - Financial Data
75
SUEK
76
Regional Overview
79
Europe Overview
79
1
79
2
80
3
83
Table: Europe: Mining Regulatory Outlook
83
4
84
Global Industry Overview
85
Global Overview
85
Downturn To Continue Into 2014
85
1
85
2
86
3
88
But Opportunities Still Exist
90
1
90
2
92
3
93
Methodology
96
Industry Forecast Methodology
96
Sources
97
Risk
Risk
Table: Mining Risk
Table: Mining Risk
Table: Weighting Of Indicators
100

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.

secure
Benefit from discounts when you add multiple products to your basket
2 Products SAVE 10%
3 Products SAVE 15%
4 Products SAVE 20%
5 Products SAVE 25%
6 Products SAVE 30%
7 - 20 Products SAVE 35%
21 Products or more SAVE 40%

Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc