Russia Mining Report

Published 19 June 2015

  • 96 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: Russia's mining sector growth will remain solid over the coming years. Gold and coal production will outperform P GM's and iron ore output growth. However, production growth will be hindered due to global mineral price weakness and Western sanctions. Furthermore, the country's limited access of foreign mining investment into the sector will limit the sector's investment attractiveness .

We believe Russia's mining sector will experience solid, but not rapid growth over the coming years. Russia has significant growth potential due to its rich mineral deposits, including coal, iron ore, gold and platinum. Additionally, a number of new projects are set to come online, such as Polyus Gold's Natalka mine, which is one of the largest gold mines in the world. However, the country's bureaucratic hurdles, effects of western sanctions and weak mineral prices will limit new projects from coming online and weaken mining output growth over the coming quarters.

Coal And Gold To Outperform
Russia - Select Mining Production (% chg y-o-y)

Coal Set For Strong Growth

We believe Russia's coal sector will grow strongly over the long term. The state plans to spend an estimated USD123bn developing the country's coal reserves over 2012-2030, alongside major investment into logistics and engineering capacities. We expect a gradual re-orientation of Russia's coal exports from Europe to Asia will be driven by growing demand for both thermal and coking coal in the region. Russian coal miners will benefit from rising coal demand from Asia and several major infrastructure projects are underway to facilitate greater coal trade flows.

Regulatory Environment To Be Key Concern

The Russian government will maintain strong influence on the country's mining industry. For instance, the government holds significant stockpiles of palladium and restricts the amount of palladium that can be exported each year. This way, the Russian government can exert significant influence over...

BMI Industry View
7
Coal Set For Strong Growth
8
Regulatory Environment To Be Key Concern
8
Western Sanctions To Limit Infrastructure Growth
8
SWOT
9
Industry Forecast
11
Coal: Investments To Support Supply Growth
11
Government To Support Sector Modernization
12
Exports To Shift To Asia
14
Infrastructure To Temper Growth Outlook
17
Table: Russia - Distance From Coal Production Area To Shipping Seaport
18
Table: Coal Production Forecast (Russia 2014-2019)
19
Gold: Price Weakness & Regulatory Environment To Dampen Growth
20
Regulatory Environment To Subdue Growth
23
Table: Gold Production Forecast (Russia 2014-2019)
24
Iron Ore: Price Weakness To Subdue Growth
25
Sanctions To Limit Infrastructure Growth
26
Table: Iron Ore Production (Russia, 2014-2019)
28
Nickel: Growth Constraints Due To Capacity Cutbacks
29
Table: Nickel Mine Production (Russia, 2014-2019)
31
Palladium: Subdued Growth, Yet Potential In The Long Run
32
Table: Palladium Production (Russia 2014-2019)
35
Platinum: Growth To Stagnate
36
Table: Russia - Largest Platinum Projects
37
Table: Platinum Production (Russia 2014-2019)
39
Industry Risk Reward Ratings
40
Russia Risk/Reward Index
40
Rewards
40
Industry Rewards
40
Country Rewards
40
Risks
41
Industry Risks
41
Country Risks
41
Europe Risk Reward Index
42
Czech Republic Under Pressure
43
Modest Uptick For Finland
43
Table: Europe - Mining Risk/Reward Index
44
Regulatory Development
45
Trade & Investment Risk Analysis
45
Commodities Forecast
49
Commodity Strategy
49
Ferrous Metals
49
Iron Ore: Price To Remain Under Pressure In 2015-2016
49
Steel: Subdued Prices Until 2017
51
Non-Ferrous Metals
54
Copper: Subdued Outlook, Despite Recent Rally
54
Lead: Prices Weakness To Continue
56
Nickel: Subdued Prices Due To Weak Demand Growth
57
Tin: Supply Deficits To Underpin Rally In Tin Prices
58
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
59
Table: Select Commodities - Performance & BMI Forecasts
61
Competitive Landscape
62
Main Players
62
Table: Russia - Key Financial Data For Select Mining Companies
63
Company Profile
64
Polyus Gold
64
Table: Polyus Gold - Financial Data
66
Global Company Strategy - Norilsk Nickel - Q3 2015
67
Company Overview
68
Company Strategy
69
Table: Norilsk Nickel - Supply Chain Analysis
70
Table: Norilsk Nickel - Key Financial Data
71
SUEK
72
Regional Overview
75
Europe's Four Key Mining Themes
75
Coal: Regional Stagnation, Yet Bright Spots Remain
75
Currency Weakness To Impact Trade Dynamics
77
Steel Oversupply To Curb Growth
78
Rare Earth Production To Shift Westwards
80
Global Industry Overview
82
Global Overview
82
1
83
2
85
3
86
4
88
5
90
Methodology
92
Industry Forecast Methodology
92
Sources
93
Risk/Reward Index Methodology
94
Table: Weighting Of Indicators
95

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

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.

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.

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.

Sources

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.

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