Russia’s mining sector reverses output declines

According to a new report by Business Monitor International Russia’s mining sector is set to grow slowly over the forecast period to 2015, marking a reversal of the declining output seen since 2006.

Business Monitor forecasts the value of the mining sector to reach US$259bn in 2015 from US$134bn in 2010, marking an annual average growth rate of 2.6%.

The research firm expects Russia to remain the world’s largest palladium and nickel producer, but forecasts that its share of global output is likely to fall with faster nickel output growth in Canada and the Philippines and larger increases in palladium production in South Africa.

Russia’s nickel production will reach 302kt (thousand tonnes) in 2015, from 274kt in 2010, marking an annual average growth rate of 1.9%. This growth will be driven by Norilsk Nickel which expects to produce 12ktpa at the Skalisty mine in 2012 and 8ktpa at the Gluboky in 2013. Besides Norilsk Nickel, Amur Minerals has revealed estimated reserves of 171kt at its Maly Krumkon mine. In addition, we forecast palladium output to reach 3.0moz (million ounces) in 2015, marking average growth of 2.2% per annum from 2.7moz in 2010.

BMI expects platinum production to exhibit similar levels of growth, increasing by 2.5% per annum over the forecast period, reaching 917koz in 2015, from 810koz in 2010. The growth in platinum and palladium production will also be driven by Norilsk Nickel, which plans to increase output at its Severny and Oktyabrsky mines. Looking further ahead, Urals Alluvial Platinum is developing the Kluevsky & Volchetundra deposits which could provide a further boon to production.

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