Russian mining industry news update May 2020

More news stories from across Russia’s vast mining & mineral extraction industry.

This month:

• Low global outlook for metals
• A new mining plant in southern Urals
• FLSmidth wins large gold plant order

Russia mining news round up

FLSmidth chosen to supply new gold processing plant

FLSmidth has been chosen to supply a new gold processing plant to JSC Pavlik in Russia. The order, valued at around DKK 290 million, has become effective and will be booked in 1Q20. The planned 7 million tpy plant will operate alongside the successful processing plant supplied by FLSmidth in 2013-14.

FLSmidth will supply equipment across the complete flowsheet, including materials handling, flotation, gravity concentrators, screens, gold leaching, dewatering, pumps, cyclones, valves, instruments and reagent systems. The order also includes a complete plant electrical and automation package.

The contract follows the successful partnership with JSC Pavlik for Line 1, for which FLSmidth designed and supplied all the main process equipment. This single-source approach for the original plant proved successful for the customer, and the new order reflects their satisfaction.

Manfred Schaffer, Mining President, FLSmidth, commented: “The company is delighted to receive this order from JSC Pavlik and the Arlan Group […] Receiving a repeat order with a prominent miner reflects the importance that FLSmidth puts on the development of state-of-the-art mining equipment and into maintaining a close partnership with customers throughout the full lifecycle of a mine.

“The order is a clear indication of the customer’s satisfaction with FLSmidth as the single-source supplier of the original gold processing plant and the dedication to delivering productivity to the market.”

Billionaire to build new precious metals plant in Chelyabinsk

Konstantin Strukov has said he plans to build a new gold & silver processing plant in the Chelyabinsk region by 2022.

It will be located at the South Kurasan and Western Kurasan fields.

Yuzhuralzoloto GK, owned by Strukov, is the company building this new plant. The firm has been processing fields throughout Chelyabinsk for a number of years. Deposits in the Kurasan fields are estimated to hold 80 tons of gold and 250 tons of silver.

 “With the enterprise reaching its projected ore processing capacity of four million tons per year, the factory will produce 3.5–4 tons of gold annually,” the company said. 

Investments towards the construction of the new plant stand at a $250 million.

Plans include building of a gold recovery plant, a complex of treatment and water intake facilities, a power substation, technological, administrative and other buildings, to lay an electric line, a gas pipeline and new roads. 

The new project is estimated to create around 1,200 new jobs by 2024.

About 15% of the world's copper mines and 20% of zinc mines have ceased production

According to UBS Analysts, roughly 15% of the world's copper mines and 20% of zinc mines have halted production or are operating at limited capacity. according to UBS analysts.

The measures have been taken to potentially prevent metal prices from falling to the lows recorded during the 2008 global financial crisis. 

In 2008, copper prices fell below $3,000 per ton, while now they are trading at around $ 4,500 per ton. The cost of aluminium is also significantly higher than 2008 levels. 

"The duration of this situation and, thus, the total volume of lost supply in 2020 is not yet clear,” said UBS’ Daniel Major “However, in our opinion, more and more active supply interruptions can significantly compensate for the weak demand, which is potentially able to limit the fall in raw material prices.” 

Analysts expect more active supply disruptions over May 2020, as country authorities tighten restrictions to slow the spread of coronavirus, while manufacturers suspend production at less significant fields in order to save money.