Wednesday, 25 November 2020
Mining to Russia: Trends and Opportunities

Mining to Russia: Trends and Opportunities

The market

Despite modest global growth of the mining sector in recent years, Russia remains one of the largest producers of mining commodities in the world. The country has a huge geographic area rich with mineral resources. According to the United States Geological Survey (USGS), Russia was ranked among the world leading producers of commodities including bauxite, coal, copper, diamond, gold, iron ore, lead, nickel, PGM, potash, silver, uranium and others (Source: U.S. Geological survey minerals yearbook - 2013).

Russia is the largest miner of diamonds and palladium and the second largest miner of platinum and nickel. Business Monitor International (BMI) forecasts that Russia will remain one of the world’s largest producers of base and industrial metals (Source: Business Monitor International, Russia Metals Report 2015).

Russia’s economy adjusted to the shocks of lower oil prices and Western sanctions with fortitude, contracting just 0.2 per cent in 2016 (Source: FocusEconomics, Russia Economic Outlook). The World Bank expects the Russian economy to start inching towards growth of 1.5 per cent in 2017 and 1.7 per cent in 2018 (Source: World Bank, Russia Economic Report, No.36).

Business Monitor International forecast that Russian coal output will grow from 392 million tonne in 2016 to 428 million tonne in 2020 with an annual growth rate of 2.2 per cent. The key drivers of this growth will be domestic coal sector investment and increased competitiveness due to a weak rouble (Source: Business Monitor International, Kazakhstan Mining Report Q1 2017).

Russian mining companies are on the edge of developing new excellent deposits. In 2017 Polyus Gold acquired a license for Sukhoi Log deposit development with an estimated reserve of 64 million ounces of gold. Baikal Mining Company, Metalloinvest subsidiary, is about to proceed with the design documentation development phase of Udokan project with JORK-compliant reserves of 26.7 million tonnes of copper.

The mining industry plays an ample role in Russia’s national economy. It takes about three to five per cent of the gross domestic product (GDP) but accounts for 16 per cent of export earnings in 2015. The sector is highly consolidated. The Strategic Investments Law, which regulates access of foreign investors to the mining industry, gives privileges to Russian companies that play key roles in the sector and restricts foreign firms from developing large, or ‘strategic’ deposits. At the same time, the gold mining industry offers bigger integration into the global economy offered to Russian and international miners. A number of smaller international companies are also producing nickel, silver and coal in Russia.

About 20,000 deposits have been discovered in Russia and over one-third of these deposits are in the development or production stages. The major mining regions are the Far East, East Siberia and the Kola Peninsula. Many of the resources are still untapped and require modern technologies and investment to be discovered and developed.


According to Engineering and Mining Journal, Russia presents one of the greatest remaining opportunities in the mining industry worldwide. With generally favourable forecast for mining sector development, Russian mining companies are focused on optimising the cost of existing operations, increasing efficiency of development projects while preparing for future growth. The mining sector looks for cooperation with international companies to get access to new products and technologies to improve productivity, providing many opportunities for Australian exporters.

The following opportunities exist:

  • mapping, airborne surveying, prospecting, exploration drilling services
  • EPC/EPCM contractors for the mining projects of one - five million tons of ore per year
  • mining optimisation consulting services
  • mining training services
  • mining and processing equipment and technologies
  • maintenance and repair services for mining equipment
  • IT, geological data analysis and data modelling
  • engineering, project management, risk analysis and other consulting services
  • mine safety, audit and environmental services
  • ore processing and screening
  • geotechnical and construction services.

Read a customer profile on Polyus Gold International (PDF).

Competitive environment

Australian mining equipment, technology and services (METS) companies have a good reputation within the Russian mining community. Australian products are considered to be of high quality and the best international standards. A number of Australian METS established offices or appointed distributors in Russia.

The high cost of commercial credits in the market and limited access to international banking by Russian mining companies make finance options and cost-competitiveness crucial for competing effectively in Russia.

Many international suppliers to the mining industry are active within the country. Traditionally, most equipment and services are bought from the European Union, United States and Canada. As Chinese investments to the industry grows, so too does the share of Chinese suppliers to the mining sector.

Tariffs, regulations and customs

There are no significant barriers for Australian companies entering the market. In recent years, there has been substantial progress in the adoption of common international rules to product standards and certification procedures. However, Russia still has a complicated system of certification and all products imported into the country must meet Russian standards. Australian exporters are recommended to work with reliable partners and consulting companies on registration and certification issues.

On 1 January 2015, Russia along with Belarus, Kazakhstan, Armenia and Kyrgyzstan established the Eurasian Economic Union (EEU) introducing a common economic space containing more than 180 million people. The EEU has removed trade and economic barriers and formalised the free movement of goods, capital, services and people, including the unified customs rules and common certificates/declarations of conformity for all EEU members.

Industry standards

Mining products are subject to the following CU technical regulations:

  • CU TR 010/2011 - Safety of machinery
  • CU TR 012/2011 - Safety of equipment in explosion hazardous environments
  • CU TR 019/2011 - Safety of personal protective equipment (PPE).

Marketing your products and services

Market entry

Russian territory is vast and divided by eleven time zones which can make some international companies prefer to enter the market on a regional basis. It is common for new companies entering the Russian landscape to first establish a presence in Moscow and St. Petersburg before moving into other regions where the targeted industry is the most developed. These are Kuzbas basin and East Siberia for coal industry, Sakhalin for oil and gas, Far East and Siberia for mining.

One of the major competitive advantage for Australian suppliers to mining companies can be the ability to provide after-sales service, training, and customer support. It is particularly important in remote areas where mining clients operate.

Distribution channels

The most common entry strategy for Australian METS companies in Russia is to appoint an agent or select a well-established local distributor. Usually a company needs a number of distributors to effectively service the clients in different regions. Typically, distributors supply products to the clients and provide logistical support, warehousing, product certification and customs clearance.

Under Russian regulations, representative offices of international companies cannot be involved in commercial activities. The advantage of establishing representative office in the country is to strengthen control over distributors and product promotion.

Registration of a wholly owned subsidiary in Russia is possible. The federal and local government provide support to international companies establishing manufacturing facilities in Russia, particularly in fast track development areas in the Russian Far East and other special economic zones.

Links and industry contacts

The Federal Subsoil Resources Management Agency
The Ministry of Natural Resources and Environment of the Russian Federation
Norilsk Nickel
Polyus Gold
UC Rusal

Links and industry contacts

Government, business and trade resources for Russia

The Ministry of Finance of Russian Federation –
The Ministry of Natural Resources of Russian Federation –
State Committee of Health and Safety in the Mining Industry –

Contact details

The Australian Trade and Investment CommissionAustrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

  • develop international markets
  • win productive foreign direct investment
  • promote international education
  • strengthen Australia's tourism industry
  • seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.


For more information on how Austrade can assist you, contact them on:

Australia ph: 13 28 78 | Email:

list of Austrade offices (in alphabetical order of country) is also available.


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