Go To Market in Russia

Russia is one of the largest mining countries in the world, holding an estimated 16% of the world’s mineral deposits. It is one of the world’s largest mineral producers, accounting for about 14% of the world’s total mineral extraction. Russia is the leader of 166 mining countries by the number of extracted mineral products (48), most notably diamonds, nickel, copper, coal, gold, platinum group, tin and bauxite. There are around 5,600 mining-related companies in Russia, including metal mining, non-metal mining and smelting companies.

However, since the dissolution of the Soviet Union, Russia has struggled to maintain its ailing mining industry, which is now facing three major challenges:

• A need to intensify mineral exploration No significant discoveries have been made for many years and most of the country’s mineral resources that are being exploited were explored during the Soviet period.
• A need to utilize economically feasible mining methods Despite having large quantities of explored reserves, it is estimated that between 30% and 70% of Russia’s reserves are not exploitable under current economic conditions using mining methods from the Soviet period. To turn this around and exploit these reserves profitably, new technologies and strategic planning methods need to be introduced.
• A need to increase the level of mechanization

The mineral production is severely handicapped by the rundown state of existing mines and plants. The current high level of labour intensity adversely impacts on operational safety and productivity.

According to news reports, the Russian President urged mining companies to make better use of new technologies. The company executives also understand very well that if they do not invest in technological advances, most of the reserves could be depleted by 2020.

Technical consulting to the mining industry in Russia has traditionally been provided by old-style specialist Research and Project Institutes (RPIs) from the Soviet era. Their productivity is inhibited by complex bureaucratic systems and a shortage of high-quality specialists with practical experience. Mining companies are looking for an alternative approach as often they cannot solve technical problems on their own due to the lack of experienced and competent personnel on site, whereas the solutions offered by RPIs are not always practical. This creates significant opportunities for western consulting companies. Some engineering consultants have already opened offices in Russia in the last five or so years, however the level of participation of international mining consulting firms in the Russian mining industry is still relatively low.

Since 1998 AMC has undertaken multiple projects in various parts of Russia and FSU including Siberia, Kamchatka, Kazakhstan, Uzbekistan, Kyrgyzstan, Ukraine and others. We are now looking to build on that knowledge and experience. To date, we have established an AMC representation office at the Moscow State Mining University. AMC may be contacted for Russian projects through any of our international offices here.

Vadim Louchnikov