BMI View: Mineral production growth is set for solid performance in Russia over the coming years. Growth rates for coal and gold will remain more robust than for PGMs and iron ore. Despite our positive outlook, the sector will struggle to come to terms with lower global mineral prices and the effects of western sanctions . Moreover, foreign investors will struggle to establish a foothold due to restrictive regulations.
We believe Russia's mining industry is set to experience solid, but not rapid, growth over the coming years. 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 myriad of bureaucratic hurdles, the escalation of cash costs, effects of western sanctions and softening of commodity prices will see a growing number of miners scaling back their ambitions over the coming quarters. Still, some major projects are set to come online, for example the Natalka gold mine under development by Polyus Gold, is set to come online in 2015.
| Solid Growth Outlook |
|Russia - Select Mining Production (% chg y-o-y)|
Deteriorating Relations With The West Presents Major Risk
Deteriorating relations with the West over Russian actions in Crimea and eastern Ukraine present a serious risk to Russia's mining sector. The implementation of international sanctions against Russia could dent mining sector growth if western demand for Russian minerals is curtailed over a long period. In Q414, the Russian government was forced to buy gold produced from its domestic mines to absorb excessive supply as sanctions have made it extremely difficult for Russian gold miners to sell abroad.
Coal To Outperform
We believe Russia's coal mining industry holds great promise for strong 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...
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.
- 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.
BMI Industry View
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.
Industry SWOT analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:
- Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
- 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 (USDmn) for all major metals, minerals, ores and gems mined in each state.
- Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.
BMI’s Mining Risk Reward Index
BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.
Competitive Landscape Tables & Analysis
Comparative company analyses and tables detailing USD sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.
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.
The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.