Boston, MA -- (SBWIRE) -- 07/25/2014 -- 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.
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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...
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.
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.
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 .
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