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Sorry can't post a link...
Russia Mining Competitive Landscape
01 Dec 2021
Key View
Russia's strict regulation on foreign investment will ensure the continued dominance of domestic miners within the mining sector over the coming years. Norilsk Nickel will remain the largest domestic player.
Russia's domestic miners will continue to dominate the country's mining industry as the strict regulation of foreign investment will prevent foreign miners from entering the sector. In our view, local mining companies will account for the majority share of Russia's mining sector over the coming years. The country's regulatory environment will deter foreign investment from entering the mining sector. The Federal Laws 57-FZ and 58-FZ aim to regulate foreign ownership and control of strategic assets and industries, including certain types of minerals, such as copper and any deposit area with mixed mineralisation. The Russian government has a tight hold on local mining industry assets. For instance, foreign miners willing to enter the domestic market must first gain previous consent from the Governmental Commission headed by the prime minister and are subject to a limit of 25% ownership in any domestic mine, as per the Strategic Investment Law. Additionally, the lack of financial resources available for miners suggests that foreign players will continue to struggle to obtain adequate mine financing. The London Stock Exchange has been the popular destination to raise capital for many Russian miners.
Main Players
The mining sector in Russia is highly consolidated, with only a handful of companies accounting for the main share of domestic output.
Norilsk Nickel is the country's largest metals producer. The company accounts for the lion's share (more than 90%) of domestic nickel output. In February 2021, Norilsk Nickel received a USD1.9bn fine from a Russian court in response to a large fuel spill which occurred in the Arctic in May 2020. In January 2021, the firm joined the Responsible Sourcing Blockchain Network (RSBN) built on IBM blockchain technology which helps improve transparency in the mineral supply chain. In 2020, the firm's Russian nickel operations increased 4.0% y-o-y to 172kt.
The country's palladium and platinum subsectors will rely on Eurasia Mining and Polymetal International in the coming years for production growth.
Russian Platinum, a member of Musa Bazhayevs Alliance Group, will boost its market share in the years ahead, having won the tenders for the rights to explore and develop the southern portion of the Norilsk-1 deposit. The area is home to one of the largest deposits of copper and nickel in Russia's Taimyr Peninsula, with estimated nickel, copper and cobalt reserves of 273kt, 378kt and 12.7kt respectively. In March 2020, Norilsk Nickel announced that Russian Platinum has decided to terminate the negotiations concerning Arctic Palladium JV. In turn Russian Platinum will develop the southern part of the Norilsk-1
excellent post
lovelyboy
Thanks for posting LB - Nice to be seen by Fitch as being one of the main players alongside NN and Polymetal and to have got this status as a “foreign” company is testimony to the work the BoD has been doing over the past 20 years. No mention of Federova Tundra either which puts the EUA mention into context as the deposit at FT is regarded locally as being one of Europe’s largest.
Thanks LB. Which website is it on?
Interesting stuff LB, good find.......
perhaps some of the muppets may wish to take note , if you want to deramp why don`t you find material out there to support your theories??
ARD
Mentioned with the big boys, it's starting to become quite regular now.
The Russian mining sector is always an interesting topic, they have very vast resources over there and they have to come online over the next couple of decades, the future demand forecast makes it the case.
GLA
Can't bring material from the land of make believe AREALDARTAGNAN.
What they type is made up on the spot, children trying to convince adults not to believe the facts of the situation.
GLA
Is the article only available to subscribers to Fitch?
@Koc.
Yrs it's behind a pay wall. Full report is about £1000 I believe. I discovered it on the ortex terminal in the link posted by @jiffybag last night.
Careful! You only get one keystroke on ortex before you join their pay wall. :)
Hence the c+p to share it here.
ATB LB
Correctomundo Mac
Nice one. Cheers LB.
No problem koc.
https://www.ortex.com/symbol/AIM/EUA
Courtesy of jiffybag if you want to verify the research note from fitch for yourself.
Actually you have 2 chances to view if the second try is via a private window. Clever cookies at play here.
ATB LB
You're right LB. However I was able to click the article and read it several times, extracting anything from it is a different story.
Fitch stating that the country's palladium and platinum subsectors will rely on Eurasia and Polymetal for production growth is really nice to see.
Once again, great find. :-)
Agreed. There's charts and tables that I couldn't share here. Best bet is to use the link to view.
I found the 25% ownership part interesting. This may shed light on how / why the rosgeo jv deal is structured 75/25. Limiting foreign investment to 25% to satisfy state legislation and licensing the 75 to a Russian entity.
It's interesting stuff for sure.
ATB LB
Lb & all
Great work LB as always , & Tigra post earlier & , Mac , judge & many other regular posters
I also use ortex for info .
Rums all Round
And a target price of £1.03 which is healthy. Nice to see this board discussing EUA and not attacking each other. I turn off on the ranting days, too boring!
Great post LB many thanks.
The screens from the Ortex / Fitch link posted by @lovelyboy - good work!
https://twitter.com/iMuesliBrown/status/1466024881947136002
Just been thinking more about 25% ownership thing. Interesting that Polymental get a mention by Fitch along side EUA.
Just stuck me that Polymetal also have a 75/25 JV with Rosgeo - very similar terms.
https://www.rosgeo.com/en/press/news/rosgeologiya-i-polimetall-sozdali-sovmestnoe-predpriyatie/?sphrase_id=8888
This is all a new bit of the jigsaw to me. Especially if you read the comments by Sergey Gorkov, Director General - Chairman of the Board of RosGeo. -
"I am confident that the combination of the competencies of our companies will put on the state balance new significant reserves of mineral resources, and in the future allow to effectively involve these resources in the country economy within the framework of commercial operation."
What differs between our JV and theirs is the responsibility for funding the exploration.
Polymetal JV
'Polymetal will provide the equity loans to fund the geological exploration activities to the extent necessary for the assessment of the stocks by GKZ. The assessment of the mineral resources in line with JORC Code is scheduled to be completed in 2023.'
EUA JV
'Eurasia Mining will carry out operational management of the joint venture and the project. RosGeo will contribute to the joint project the gained experience and competence, including conduct of geological exploration and prospecting activities, and render the geological consulting services, which enable to ensure the high efficiency of the partner investments in the project.'
ATB LB
Yes, it certainly made my day to see EUA and Polymetal mentioned in the same breath.
In fact, EUA was mentioned first in that sentence.
Polymetal currently has a market cap of £6.4Bn
And publicly during this year Polymetal has stated its ambition to get into copper and battery metals. It's Viksha Pd dominant project has clearly been put on hold - it just doesn't stand up to Monchetundra.
DShox - quite right, Polymetal said as much ie that it was on hold at one of their recent investor conferences
Sorry - to be clear, I'm refering to Viksha Pd
Hi lovelyboy,
I don't see any mention of who is funding what. Saying Rosgeo will do the geological exploration etc is not the same as saying Rosgeo will be paying for it.
I've never come across a company that has entered a JV and given as little information on that JV as EUA have with the Rosgeo JV.
MrYfronts
Is it not this bit "RosGeo will contribute to the joint project the gained experience and competence, including conduct of geological exploration and prospecting activities, and render the geological consulting services"
'render'
1 : to transmit to another : deliver. 2 : to furnish for consideration, approval, or information: as. a : hand down render a judgment. b : to agree on and report (a verdict) — compare enter. 3 : to give in acknowledgment of dependence or obligation 4 : make payment of.
ATB LB