Engineering & Mining Journal

MAR 2019

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 42 of 67

MINING IN RUSSIA MARCH 2019 • E&MJ 41 it. Earlier, the company said the upcoming expansion should significantly increase production, but refused to provide any ad- ditional details. The overall reserves of the deposit are estimated at 1.3 million mt. Zinc, Tin, Lead Lag Behind With other nonferrous metals, the situation is not that good. In particular, there is no clarity when the project of the First Mining Co. (FMC) for mining of zinc, copper and silver at the Novaya Zemlya would be imple- mented. The Pavlovsk deposit is fifth in the world in terms of zinc reserves with 1.97 million mt of this metal, containing also 549,000 mt of lead, according to FMC. FMC originally scheduled to start min- ing at the project in 2019, but there are no signs those plans could be turned into reality. FMC wants to produce 2.5 million mt of ore at the Novaya Zemlya, process concentrates on site, and export them to the European Union. The problem, how- ever, is that Pavlovsk deposit, which is commonly described as "the most north- ern open-pit mine in the world," has no infrastructure on the island. FMC estimated that to implement the project, the company would need $215 million, according to Alexander Lukin, general director of FMC. The cost is rath- er low because the valuable ores are lo- cated close to the surface. The average grades are rather high, 5.8% for zinc and 1.3% for lead. On the other hand, the top official of the regional government has recently admitted that there are certain complications with this project. To make the project possible, it is nec- essary to build a sea port and support- ive objects at the Novaya Zemlya with the overall cost of infrastructure close to Rub100 billion ($1.6 billion), Igor Orlov, the governor of the Arkhangelsk Oblast, said on January 14. This is a big project, so there could not be any "fast develop- ments," but the project is going to be implemented eventually, Orlov claimed. Orlov also said Pavlovsk is the fifth big- gest metal ores deposit in Russia with the overall reserves of 37 million zinc- and lead-containing ores. As for tin mining, the situation is also not that bright. There are several depos- its in the Russian Far North, but due to the lack of infrastructure, harsh weather conditions and some other factors, both regional and federal authorities fail to encourage investors developing them. Russian Ministry of Industry and Trade estimated that with the overall demand of 7,500 mt, the country still imports 90% of its tin, and this situation is not likely to change in the coming years. In 2018, Russian company Yanolovo planned to commission the biggest tin mine in the country at the Ruchei Tirekhtyakh placer tin deposit in the Republic of Sakha, with the designed capacity of 5,500 mt pro- duction per year and the investment value of $70 million. Those plans were not des- tined to come true, and there is no clarity on whether the project would be implemented. The construction has been delayed several times, and even the government decision to provide some tax breaks under the project has not drove the project from the deadlock. Future Belongs to Rare Earth Metals In the meantime, the Russian Parliament recently adopted a bill reducing taxation for rare earth metals mining. The deci- sion has been taken by several projects, including the development of the Tomtor rare earth deposit in the Republic of Ya- kutia, Russia, by the state-owned corpo- ration Rosteh for $560 million. This is one of the biggest rare earth metals in the world, Denis Manturov, Rus- sian industry and trade minister, estimat- ed. The overall resources are 154 million mt, containing oxides of 10 rare earth metals, including niobium, terbium, yttri - um and scandium. What is very important is that the share of rare earth metals in the ore is close to 10%, which is one of the highest rates in the world. Russian government officials already said that given the skyrocketing demand for the rare earth metals on the global market, this could be one of the "most important projects in the Russian mining industry ever." If everything goes well, the construction of the mine is slated to be- gin in 2019, while the first ores could be produced already in 2020. 2015 2016 2017 2018 2019 2020 2021 Aluminum Production 3,500 3,613 3,729 3,849 3,972 4,100 4,139 Consumption 0, 815 0, 838 0, 862 0, 887 0, 912 0, 938 0, 961 Export 2,685 2,775 2,867 2,962 3,060 3,162 3,178 Copper Production 0, 860 0, 858 0, 856 0, 854 0, 852 0, 850 0, 864 Consumption 0, 272 0, 282 0, 293 0, 304 0, 316 0, 328 0, 337 Exports 0, 588 0, 576 0, 563 0, 550 0, 536 0, 522 0, 527 Zinc Production 0, 250 0, 252 0, 258 0, 264 0, 279 0, 295 0, 301 Consumption 0, 245 0, 247 0, 249 0, 250 0, 252 0, 254 0, 262 Exports 000, 5 000, 5 000, 9 00, 14 00, 27 00, 41 00, 39 Nickel Production 0, 240 0, 234 0, 227 0, 221 0, 216 0, 210 0, 217 Consumption 00, 27 0 27,2 0 27,4 0 27,6 0 27,8 00, 28 00, 28 Exports 0, 213 206,8 199,6 193,4 188,2 0, 182 0, 189 Table 1—Production, consumption and export of Nonferrous Metals from Russia for 2015-2021. (Source: AKRA consulting agency) Precious metals production, such as gold, in Russia is also expected to increase. (Photo: RG Gold)

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