The mineral industry of Russia is one of the world's leading mineral industries and accounts for a large percentage of the Commonwealth of Independent States' production of a range of mineral products, including metals, industrial minerals, and mineral fuels. In 2005, Russia ranked among the leading world producers or was a significant producer of a vast range of mineral commodities, including aluminum, arsenic, cement, copper, magnesium compounds and metals, nitrogen, palladium, silicon, nickel and vanadium.Richard M. Levine and Glenn J. Wallace. "The Mineral Industries of the Commonwealth of Independent States" . 2005 Minerals Yearbook. U.S. Geological Survey (December 2007). This article incorporates text from this U.S. government source, which is in the public domain.
In 2005, the Russian economy benefited significantly from high oil, gas, and metal prices. Oil revenues accounted for about 14% of the gross domestic product. Following the mineral fuel industry, the next leading branch of the mineral industry, in terms of its contribution to the national economy was the metallurgical sector, which contributed 19% of the value of industrial production, accounted for 11.1% of the value of an industrial capital stock, and employed 9.3% of the industrial labor force. In 2005, a total of 1,071,000 people were employed in the mineral extraction sector and made up 1.6% of the country's labor force. Investment in mineral extraction and metallurgy accounted for about 20% of total investment in the Russian economy.
In 2019, the country was the second worldwide producer of platinum, vanadium and cobalt; third world producer of gold, nickel and sulfur; fourth worldwide producer of silver and phosphate; fifth largest world producer of iron ore; sixth largest producer of lead; seventh largest world producer of boron; eighth largest world producer of gypsum; ninth largest producer of copper, molybdenum and bauxite; 10th largest world producer of zinc; 13th largest world producer of tin; in addition to being the world's 10th largest producer of table salt. It was the world's sixth-largest producer of uranium in 2018.
Legal framework A new subsoil law was under discussion . The previous law of 1992, as amended, does not impose any special restrictions on companies with foreign participation, with the exception of diamond and radioactive materials, but this appeared likely to change to the disadvantage of foreign companies, especially those interested in investing in large or strategic deposits, such as the Udokan copper deposit or the Sukhoi Log gold deposit.
Production In 2005, the value of mining and quarrying production, including extraction of mineral fuels, increased by 1.3% compared with that of 2004; when mineral fuels are excluded, it fell by 3.2%.
Structure Production in the mineral sector was highly concentrated as of 2005. For more than 10 minerals, the majority of production was conducted by one company. Gazprom controlled almost the entire production of natural gas in Russia, Norilsk Nickel Mining and Metallurgical Company (MMC) produced more than 90% of Russian nickel and platinum-group metals (PGM), and ALROSA Company Ltd. produced almost all the country's diamond. The Ministry of Natural Resources reported that the copper and other mineral industries also are highly concentrated, but that the situation is better for coal and alluvial gold. Despite this concentration, Russian metallurgical and mining companies were medium-sized compared with those in other countries; in the steel sector, Russian producers are generally smaller than their international counterparts.
Sanctions Following the 2022 Russian invasion of Ukraine sanctions have been placed on mining and related businesses including and EU ban on Russian gold in August 2022, with the Russian Copper Co, Highland Gold Mining Ltd and Chukotka Mining Geological Company, sanctioned by the US Office of Foreign Assets Control and the G7 and EU sanction over Russian diamonds in December 2023.
Mineral resources Approximately 20,000 Russian mineral deposits have been explored, and more than one-third of these have been mined. The Ministry of Natural Resources cited serious problems in the sector, which included the depletion of reserves and the low discovery rate of new reserves. The system of reporting reserves in the Soviet Union (and which Russia very often employed for its resource reporting) was based on establishing drilling parameters to ascertain the certainty of reserves. Unlike the method used in market economy countries, this method does not include the use of market-based economic criteria to establish the feasibility of developing these resources using current technology at prevailing market conditions. Thus, reserve data based on the Soviet method cannot be compared to market economy definitions of reserves. Furthermore, Soviet data on reserves for many mineral resources was either kept secret or was difficult to obtain, and the same holds true for Russian mineral resource data. By 2005, however, Russian companies had begun to seek exposure to Western markets and stock exchanges to raise money in larger quantities and more cheaply than in Russia. A number of state secrecy laws were repealed, which has led some Russian companies to start reporting their reserves and resources according to the Australasian Joint Ore Reserves Committee (JORC) code of the Australasian Institute of Mining and Metallurgy.
Metals
Aluminium RUSAL was Russia's leading domestic aluminum producing company and, along with SUAL, which was the second ranked domestic aluminum producer and the leading domestic bauxite producer, controlled all Russian aluminum, alumina, and bauxite production enterprises. Plans for RUSAL called for merging its resources with that of SUAL and with Swiss-based Glencore International AG to become the United Company RUSAL. This merger would start a new stage in the development of RUSAL and make it the global leader in aluminum production.
RUSAL was investing to expand and modernize its production facilities. It was engaged in commissioning the Khakas Aluminum Smelter with a capacity of 300,000 t/yr. Plans for RUSAL also called for modernizing the Sayanogorsk aluminum smelter in 2006 to increase output of aluminum and alloys and to modernize the Mykolaiv Alumina refinery in Ukraine to increase output to 1.6 Mt/yr of alumina. RUSAL also planned to continue to expand production capacity at the Achinsk alumina refinery, increasing its output to 1.1 Mt/yr of alumina. Included in the company's investment project portfolio is the Komi Aluminum project, which was initiated by SUAL. The project foresees the development, construction, and operation of a bauxite-alumina complex in the Komi Republic, using material from the Middle Timan bauxite deposit. The design capacity of the complex was 6 Mt/yr of bauxite and 1.4 Mt/yr of alumina. The completion of this project would considerably reduce the Russian aluminum industry's dependence on foreign countries for raw material supplies.
Copper More than 51% of Russia's copper metal production was produced by Norilsk Nickel from ore mined by the company. The remainder came from a much smaller amount of ore mined in the Ural Mountains and a large amount of secondary material. As nickel-rich ores at Norilsk Nickel become depleted, Norilsk Nickel will switch to mining larger quantities of ores, which will be primarily copper-rich ores that have a higher copper content relative to their nickel content than the nickel-rich ores, but are lower in metal content for both metals. This change could increase copper output as Norilsk Nickel tries to maintain its level of nickel production. Norilsk Nickel's strategy up to 2010, however, appears to be to maintain its production of nickel-rich ores which may delay the significant increase in copper production.
The leading copper producer in the Ural Mountain region—the Ural Mining and Metallurgical Company (UMMC)—controls a large number of mining and metallurgical enterprises in the Urals. The company was planning to develop its raw material base and to increase its output of copper in concentrate to 105,000 t in 2010 from 72,000 t in 2003. Mine output in the Urals would also expand as mine development takes place at the Russian Copper Company Limited, which was the country's third ranked copper producer and which also controlled mining and metallurgical enterprises in the Ural Mountain region. Development of the large Udokan deposit in Chita oblast was still on hold. Reserves at Udokan and neighboring deposits were reported as ranging from 10 to more than 20 Mt of copper in ore at grades of between 0.7% and 4% copper.
Gold Russia was having a difficult time expanding gold production because reserves at existing enterprises were being depleted and gold mining companies were experiencing greater difficulties in obtaining licenses to mine new deposits. Formerly, local Government entities could issue such licenses, but in 2005, these licenses could be obtained only through the Russian Ministry of Natural Resources based in Moscow. Placers contain 18.2% of the country's reserves but they were being significantly depleted, and most existing placer mining operations were unlikely to survive beyond 2011. However, placers still contributed nearly 50% of annual production. In 2005, no new gold deposits were put into production.
More than one-half of Russia's hard rock gold resources occur in the Maiskoye, Natalkinskoe, Nezhdaninskoe, Olimpiada, and the Sukhoi Log deposits in Siberia and in the Russian Far East. More than 66% of Russian gold production comes from just six eastern regions (Amur, Irkutsk, Khabarovsk, Krasnoyarsk, Magadan, and Sakha-Yakutia). During the past 4 years, foreign companies have controlled 15% to 18% of Russian gold production, which was the largest share held for any commodity in the Russian mining industry. These foreign-held enterprises produced a total of between 30 and 36 t/yr of gold. Among Russia's leading gold producers, Bema Gold Corp., Highland Gold Mining Ltd., High River Gold Mines, Kinross Gold Corp., and Peter Hambro Mining Plc, were foreign-listed and/or foreign-controlled companies. Projects being developed by these foreign firms were expected to contribute significantly to the growth in Russian gold production in the next 5 years and could increase Russia's gold output to about 250 t/yr if they are all successfully developed. The most advanced international gold project was the Bema Gold Corp.’s development of the Kupol deposit, where production was scheduled to start in 2008. Significant byproduct gold was produced by mining operations of UMMC in the Ural Mountain region and Norilsk Nickel's operations in East Siberia on the Taimyr Peninsula (165,000 ounces in 2005).
Iron and steel Russia is the world's fourth-ranked steel producer after China, Japan, and the United States. Russia shares the lead with Japan as the world's leading steel exporter. From 1998 to 2005, Russian steel production increased by more than 50%. Between 1998 and 2005, investment in the steel sector greatly increased, which improved economic indicators for steel enterprises and enabled them to improve product quality. Nevertheless, the steel sector was still in need of investment to improve its ability to compete and to expand production capacity.