State of Russia in the surrounding world. Analytical book 

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Is Russia Truly in Possesion of Vast Mineral Resources?

Fedorchuk V.P.



Before its disintegration, the Soviet Union was the only state in the world that was completely provided for with the prospected reserves of all varieties of useful minerals. The disintegration of the USSR deprived its members of this enviable privilege. Each sovereign republic found itself dependent on the world market for raw materials.

Thus the supply of Russia with a number of important varieties of raw-materials either gradually stopped or was so sharply reduced that it subsequently affected several branches of the mining and manufacturing industries.

Which is more profitable: spending money on the prospecting and development of new deposits or purchasing the necessary materials abroad? A number of general provisions besides instant profit should be taken into consideration, beginning with where to get the assets to purchase the materials and concluding with problems of national security. This is the most important factor to be considered when estimating the current state of Russias mineral-raw material base and the prospects of its fortification.

The next factor is the quality of known deposits. In the majority of cases it is lower than in foreign deposits. A re-estimation of the State Balance of stocks showed that only 3070 % of the Balance stocks can be economically proven. The rest must be written off.

The third factor is the unfortunate geographic and economic situation. The vast majority of prospected sites with high quality ores are located in the remote northern regions, far from transport roads. Their development will require the creation of new infrastructure, which in the present situation appears to be completely unrealistic.

The fourth factor is the gap between the cost of raw materials and the amount spent on their development, transportation, and processing combined with the high cost of energy, technology, and transport. It was for this reason that practically all enterprises of the rare metals industry were either discontinued or went bankrupt.

The fifth factor is the nearly complete termination of geological prospecting works. Experience shows that the time that passes between the discovery of a deposit and its exploitation usually takes 5 to 10 years. Large or rich mines, such as iron deposits, can even take 20-25 years. 10 of these deposits were already lost during the time of perestroika. It would seem that even in the most favourable branch - oil and gas a multiyear lag in geological prospecting works has already brought about a systematic reduction in the extraction volume of the raw-materials, which are the main source of currency inflow. In the near future Russia may turn from an exporter of hydrocarbons into an importer.

The prospects for the development of the most important mineral complexes in Russia are briefly characterized further in the article, based on the results of the authors expert evaluation of the influence of separate factors on the prognosis. The offered prognosis reflects only one of the possible models for the development of the economy of the Russian Federation.
Considerations over the outlook for the further development of Russias raw-mineral base of are appropriately completed by a quotation from an article of the Minister of Natural Resources of the Russian Federation: In Russia the allotment of natural and mineral capital accounts for about 2530 % of national wealth, but ...from 30 to 60 % of the balance stocks are unprofitable. Therefore in the cost evaluation of national wealth only 810 % of the potential value of the raw-mineral stock can be included, i.e. $1.5 trillion out of an earlier estimated $28 trillion.





State of Russia in the surrounding world 1999


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Analytical book 1999






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