"Russia Mining Report Q1 2013" Now Available At Fast Market Research

Recently published research from Business Monitor International, "Russia Mining Report Q1 2013", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 18 February 2013

We forecast Russia's mining industry value to reach US$161bn by 2017, growing at an annual average rate of 1.5% from 2011 levels. We believe strong growth in 2009 to 2011 will be followed by years of stagnation as palladium and platinum production in the country experience modest growth over the coming years. 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) in the sector between 2012 and 2030.

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 miners with obstacles to foreign investment remaining. Endemic corruption will likely further dissuade foreign investment.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/536552_russia_mining_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/536552_russia_mining_report_q1_2013.aspx?afid=201)

Looking at production, we are most positive on the coal, nickel, iron sector as we forecast annual average growth rates of 1.8%, 1.3% 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. The 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.

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