Top tips for doing business in Russia’s mining sector

Russian mining & mineral extraction holds enormous business promise.

Russian mining & mineral extraction holds enormous business promise.

Bearing some of the largest reserves of naturally occurring minerals and metals, Russia’s a huge mining player. 

The country sits on enough resources to keep extraction activity high for over 200 years – many of which are seeing demand rise globally.

Navigating a sector worth roughly 10% of Russia’s $1.5tn GDP can be tricky, so here are some top tips on how to do business in Russian mining and mineral extraction.

Doing business in Russian mining

Know the big players

If you’re a producer of mining equipment or mineral extraction technology, then you will need to know who you are selling to.

MiningWorld Russia connects you to 6,000 mining professionals, representing the largest equipment wholesalers and mining companies Russia has to offer.

If you are unfamiliar, the complexes and companies with the biggest cash to spend on updating their equipment and suppliers are Russia’s chief miners. These four largest are:

NorNickel – The world’s largest producer of nickel and a leader in platinum group metals. In 2017, the company posted profits of $2.12bn. NorNickel’s total market capitalisation is $25.5bn as of 2018.

Alrosa – Partially state-owned, Alrosa is the second largest diamond producer globally. In 2017, the company posted net income of $1.2bn. Alrosa’s total market capitalisation is $10.4bn as of 2018.

Polyus – Polyus is a world leader in gold mining and the largest domestic player in the Russian federation. In 2017, the company posted a profit of $1.24bn. Polyus’ total market capitalisation is $8.33bn as of 2018.

Uralkali – Producing a large percentage of the world’s potash supply, Uralkali provides full potash supply chain services including mining. In 2017, the company posted a net profit of $874.6m. Uralkali’s market capitalisation is $3.75bn as of 2018.

Other major Russian miners to be aware of are:

Rusal – aluminium
Severstal – steel & pig iron
NLMK – steel
Evraz – steel & pig iron
MMK – steel, pig iron & HVA products
Metalloinvest – Iron ore & crude steel
Mechel – Coal & iron ore
SUEK – Coal
Polymetal – gold & silver

Know what mining & mineral equipment Russian miners want to buy

With imports of vital mining and machinery equipment reaching $3bn every year, there’s a very healthy market for exporters to tap into in Russia.

In some sectors, the share of imported equipment is as high as 95%. Domestic production of important pieces of machinery and other solutions cannot keep up with demand.

The sectors with the highest demand, in terms of the highest market share of imported products to Russian-made products are:

• Lifting machinery & cranes
• Roadheaders
• Mechanized penetrators
• Concentrate dewatering equipment
• Geological IT surveying solutions
• Roller crushers
• Magnetic separators
• Photo & X-ray separators
• Self-propelled drilling rigs
• Hydraulics
• Control support systems

MiningWorld Russia visitors can also give you an insight into the types of machinery they are after. According to the results of the 2019 MiningWorld visitor survey, the most in-demand products were:

• Machinery & equipment for open pit mining
• Mineral processing machinery & equipment
• Mineral transportation machinery & equipment
• Underground mining machinery & equipment
• Field exploration equipment

Know where the opportunities are

Iron, nickel, palladium group metals, diamond, and gold are Russia’s key minerals, and hold perhaps the best promise. 

As such, there’s keen demand for a) Russia to boost its output of these resources, and b) for machinery and equipment suppliers to supply these expanding operations.

For example, $22.4bn has been allocated to the coal industry. Coal has been identified as an important export commodity by the Russian government, hence this large volume of investment. 

Together, the money will promote increased production at new and existing mines and improve export infrastructure.

From the above, we can deduce that there will become a greater level of interest from importers in transportation and processing equipment for coal mining in Russia.

MiningWorld Russia: the largest international mining & mineral extraction equipment exhibition in Russia

MiningWorld Russia is number one mining and mineral extraction technology and machinery exhibition in Russia.

Nearly 6,000 industry professionals attend each show to find the latest products and solutions on the market – and their manufactures – in one place.

The event is your opportunity to meet new customers and grow your sales in one of the world’s foremost mining markets.

To take part, book your stand today.

Need more info? Please contact our team.