Russia Mining Report Q4 2012
Business Monitor International, November 2012, Pages: 78
BMI View:
We expect Russia's mining industry value to reach RUB4.72trn (US$152bn) by 2016. We believe strong growth in 2009 to 2011 will be followed by years of stagnation as palladium and platinum production growth in the country practically ceases from 2012 onwards. Nevertheless, we have a positive view on the Russian mining industry given the country's vast unexplored mineral resources. The coal sector is promising as the government plans to invest RUB3.7trn (US$120bn) on the sector from 2012 to 2030. As for platinum and palladium, we do not expect significant growth in the sector given Norilsk Nickel's plans.
The government will maintain a strong influence on the industry. For example, 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 region with more than 1.6mn ounces of gold and 500kt ('000 tonnes) of copper, must seek permission from a government commission. Diamonds, uranium, cobalt,
nickel, lithium, the platinum group metals (PGM), tantalum and niobium cannot be mined by foreign firms. In practice, legal obstacles to foreign investment have prevented large overseas firms from developing exploration projects, and smaller reserves are relatively unattractive given the bureaucratic problems. We expect the regulatory structure to remain favourable to domestic investment with obstacles to foreign investment remaining. Endemic corruption will likely further dissuade foreign investment.
Looking at production, we are most positive on the coal, nickel, iron sector as we forecast annual average growth rates of 1.8%, 1.9% and 2.3%, respectively. We expect stagnant growth in the platinum and palladium sectors given our average annual growth forecasts of 1.3% and 1.0%, respectively. Production growth in platinum will be coming from Amur Minerals. Largest producer Norilsk Nickel will not be contributing to production growth in the PGM sector given the company's stagnant to negative production guidance for 2012 and beyond.
BMI Industry View 5
SWOT Analysis 7
Russia Mining Sector SWOT Analysis 7
Russia Business Environment SWOT Analysis 8
Global Mining Outlook 9
Table: Recent Tax Increases 12
Table: Largest Coal Projects 14
Table: Major Frontier Mining Projects 15
Europe Mining Sector Outlook 16
Table: Major Nordic Mining Projects 19
Table: Key Gold Projects In Eastern Europe 20
Market Overview 21
Table: Russia – Valuation And Production Forecasts, 2009-2016 23
Industry Forecasts 24
Coal: Kuzbass To Underpin Production Growth 24
Table: Russia - Coal Production, 2009-2016 28
Iron Ore: Little Impetus For Output Growth 29
Table: Russia – Largest Iron Ore Projects 30
Table: Russia - Iron Ore Production, 2009-2016 33
Nickel: Growth To Slow As Norilsk Cuts Investment Target 34
Table: Russia – Largest Nickel Projects 35
Table: Russia – Nickel Production , 2009-2016 36
Palladium: Production To Remain Flat 37
Table: Russia - Largest Palladium Projects 38
Table: Russia – Palladium Production, 2009-2016 38
Platinum: Growth To Slow As Norilsk Lowers Output 39
Table: Russia – Largest Platinum Projects 40
Table: Russia - Platinum Production ,2009-2016 41
Regulatory Developments 42
Europe Business Environment Ratings 44
Table: Mining Business Environment Risk/Reward Ratings 45
Competitive Landscape 48
Table: Russia - Largest Mining Projects 48
Table: Russia - Comparative Metrics 49
Company Profiles 50
Norilsk Nickel 50
Table: Norilsk Nickel - Financial Data, 2006-2011 53
Polymetal International 54
SUEK 57
Table: SUEK - Financial Results, 2007-2011 59
Commodity Strategy 60
Monthly Metals Update 60
Iron Ore: No Return To Highs 62
Steel: Limited Rebound Ahead 64
Aluminium: Further Gains Ahead 65
Copper: Relative Outperformer But Still Weak 67
Lead: Heading For Weakness 69
Nickel: Gains To Disappear 70
Tin: Major Gains Behind, But Outperformance To Continue 72
Zinc: Little Room For Optimism 73
Table: Select Commodities - Performance & BMI Forecasts 74
Business Environment Ratings Methodology 75
Table: Mining Business Environment Indicators 76
Table: Weighting Of Components 77
Company Profiles
Norilsk Nickel
Polymetal International
SUEK
Customers who bought this item also bought
All rights reserved. © Copyright 2013 Research and Markets WWW5
Terms and Conditions Privacy Policy Publishers Employment Opportunities Site Map Link to us Webmaster Affiliate Network
