Mining in the former U.S.S.R.
In 1992, the countries of the former U.S.S.R. all suffered serious economic declines with the disruption of economic ties resulting from the break-up of the Soviet Union and its unified central planning system. All of the countries were in a period of difficult economic transition as they sought to develop new economic relations within their own countries, with the neighbouring countries of the former Soviet Union, and with the rest of the world.
Based on resource endowments, the countries of the former Soviet Union can be divided into several groups. The Baltic states of Latvia, Lithuania and Estonia along with Moldova are all minor mineral producers and will be almost entirely dependent on other countries for mineral products. The countries of Armenia, Azerbaijan, Belarus, Kyrgyzstan, Tajikistan and Turkmenistan all have significant production of one or more mineral products that are important to their countries' economies, but they are still dependent on imports for most of their mineral requirements.
On the other hand, Russia, Kazakhstan, Ukraine and Uzbekistan each have at least one, if not many, minerals for which they are the leading world producers. However, the economic viability of some of these mineral industries is still to be determined.
Russia occupies over 75% of the territory of the former Soviet Union and is the inheritor of a large percentage of its mineral resources. Nevertheless, for certain minerals, Russia was significantly or entirely dependent on the output of other republics, particularly metals from Soviet Central Asia, the Caususes and Ukraine. The other republics, in turn, were significantly dependent on Russia for a large percentage of their minerals and, in particular, oil and gas.
With the break-up of the Soviet Union and the disruption of inter-republic trade, Russia has experienced shortages of raw materials that had been supplied by other republics, such as manganese from Georgia and Ukraine, alumina from Kazakhstan and Ukraine, copper concentrates from Armenia, Georgia, Kazakhstan and Uzbekistan and titanium concentrates from the Ukraine. These breakdowns of supply contributed to the decrease in production of a number of mineral commodities.
Reportedly, Russia produced 97.3 Mt of iron ore in 1992. Russia's iron ore consumption requirements for 1993 are estimated at 96 Mt. A 'National Programme to Modernise Metallurgy in 1993-95 and up to the Year 2000' calls for the production of an additional 13 Mt/y of marketable iron ore, with production to be increased in the iron ore mining regions of the Kursk Magnetic Anomaly district, the Kostamushka district in the northwestern part of the country, in the Urals and in Siberia.
The Russian aluminium industry is part of a joint stock company, Aluminy, which has 33 member plants in Russia, Azerbaijan, Tajikistan and Ukraine. In 1992, Russia produced 2.7 Mt of aluminium, about the same amount as in 1991. Alumina production increased by 1.5%, but Russia remained over 50% dependent on imported bauxite for its production, with the C.I.S. states importing 4.3 Mt of bauxite and 1.8 Mt of alumina. At certain aluminium smelters far from sea ports, including the Krassnoyarsk, Ural and Bogoslovsk smelters, a shortage of imported raw materials resulted in decreased production. Russia is considering development of bauxite deposits to ease the raw material shortages.
Russia used to receive a large percentage of its copper from Kazakhstan and other republics, but with the break-up of the Soviet Union it began experiencing copper shortages. To alleviate this problem, Russia has proceeded with plans to develop copper deposits. In an effort to develop the Udokan deposit, the Russian Government held an international tender in 1992 for the rights to develop this major deposit east of Lake Baikal in Chita Oblast. Several international firms participated in the tender, but development rights were awarded to the Chita-based Udokan Mining Company, representing a Russian industrial consortium and a number of foreign investors. The Udokan Mining Co. plans to sell half of the copper output on the Russian market and also already has an agreement to sell 200,000 t/y of Udokan copper to China at prevailing London Metal Exchange prices. Udokan is projected to produce about 400,000 t/y copper. The grade of the ore is slightly greater than 1% Cu, and ore reserves are estimated at 1,200 Mt.
Plans also called for the development of the Aleksandrinskoye and Podolskoye copper deposits in Chelyabinsk Oblast in the Urals. Foreign investors are being invited to participate in their development. In 1992 many copper plants in the Urals were operating under capacity, and Russia engaged in toll smelting copper concentrates from Western countries.
Owing to a number of economic factors, national gold output fell in 1992 to an estimated 192 t. In the main gold producing region, Magadan Oblast in the Russian Far East, production was reportedly 43.5 t. After Magadan, the main gold mining regions in Russia are Yakut-Sakha (17.5 t of gold) and the Amur region.
Russia's major nickel producing association, Norilsk Nikel, which comprises mining and metallurgical enterprises in the Norilsk region of East Siberia and on the Kola Peninsula, produced around 215,000 t of nickel in 1992.
Chromite is produced at the Saranov complex in the Urals: 121,400 t in 1992.
All manganese came hitherto from other republics so Russia is now planning to develop its own output. Eighteen Russian mining and metallurgical companies have formed a consortium to develop deposits in the northern Ural basin reportedly containing over 40 Mt of proved reserves averaging around 21% Mn, and 120 Mt of total reserves. Other deposits planned for development include the Usin deposit in south-western Siberia, with total reserves of 150 Mt.
Over 70% of the antimony in the former Soviet Union was mined in Russia but processed in Kyrgyzstan. Plans now call for the construction of a plant in the Moscow region to produce up to 10,000 t/y of antimony. The project includes development of an antimony deposit in Yakut-Sakha capable of supplying the new plant with raw material. Foreign investment is being solicited for this project.
Russia is a major producer of diamonds. In the Yakut-Sakha Republic, where practically all diamonds in Russia are mined, there was a reported 10% decrease in diamond extraction in 1992, against 1991 and a 25% decrease in comparison with 1990, when diamond production peaked. The Yakut-Sakha Government forecasts that diamond output will decrease an additional 14% in 1993 in comparison with 1992. Lower output is attributed to deteriorating conditions at existing diamond mines as well as the renovation work being conducted.
Russia's major source of phosphate raw material is apatite ore from the Kola Peninsula. Production has fallen far below capacity levels of 22 Mt/y, being about 12 Mt in 1992. In 1992 the Rasvumchor joint venture, in which the Norwegian firm Norsk Hydro participates, began mining the Rasvumchor deposit in Kola. The 500,000 t/y of apatite being sent to Norway.
Kazakhstan, along with Russia, was one of the major mineral producing republics of the former Soviet Union. Kazakhstan produced a major portion of the former Soviet Union's output of a number of metals including beryllium, bismuth, cadmium, chromite, copper, ferro-alloys, lead, magnesium, rhenium, silver, titanium, uranium and zinc. In addition it has a significant production of a number of other metals, industrial minerals and fuels including arsenic, gold, tungsten, molybdenum, barite, phosphate rock, coal, oil and natural gas.
The Dzhezkazgan enterprise in Kazakhstan is the country's largest copper producer with output in 1992 estimated to be 200,000 t of refined copper. With the break-up of the former Soviet Union, Dzhezkazgan is increasing its copper exports which have grown from 35,000 t in 1987 to 105,000 t in 1992.
Kazakhstan reportedly produced 24 t of gold in 1992. The bulk of this gold was produced as a by-product of copper and lead-zinc mining. A Canadian company, Gold Belt Resources, is to participate in processing gold from slag heaps from the Leninogorsk polymetallic mining complex. These slag heaps, reportedly, contain about 85 t of gold and 650 t of silver.
Kazakhstan was producing about 70% of the lead and 50% of the zinc output of the former Soviet Union. All of Kazakhstan's lead was smelted at the Ust-Kamenogorsk metallurgical plant which sells its lead both inside and outside of Kazakhstan: its major consumers are in Russia. After the collapse of the Soviet Union, the Ust-Kamenogorsk plant established preferential prices for consumers in Kazakhstan which were 17% to 35% lower than those for consumers outside the country. However, Ust-Kamenogorsk in 1993 raised its prices for domestic consumers to do away with this preferential system, which the Russians claimed was discriminatory.
Kazakhstan produced 49% of the silver output in the former Soviet Union in 1991. Silver production is a by-product of non-ferrous metals production and totals about 1,000 t/y.
The Ust-Kamenogorsk plant, with an estimated capacity of 35,000 t/y of titanium sponge, produced 40% of the titanium sponge in the former Soviet Union. All raw material for titanium production came from the Ukraine and Russia and this has been causing raw material shortages at the plant. The government has drawn up a programme for the development of its titanium industry, which calls for the development of ilmenite deposits including the Kara-Otkel and Peschanka deposits in eastern Kazakhstan and the Shokash ilmenite-zircon deposits in the Aktyubisnk region. The programme further calls for the completion, renovation and expansion of current metallurgical facilities at Ust-Kamenogorsk with the goal of increasing sponge production capacity by 25% and also creating titanium dioxide production capacity.
Kazakhstan produced about 3.6 Mt of chromite in 1992, which was over 95% of the amount produced in the former Soviet Union. In 1991 Kazakhstan reportedly exported 718,000 t of chromite. Both production and exports of chromite were near peak levels.
The Tselinny Chemical complex, one of Kazakhstan's three uranium producers, is planning to develop the Ozernoye industrial diamond deposit and to construct processing and cutting plants. The deposit will be developed by open-pit mining. Foreign investment is being sought to implement the project.
Kazakhstan extracted about 30% of the uranium produced in the former Soviet Union. In 1992 the output was about 3,000 t. Uranium production came from three deposits: Stepnegorsk, in northern Kazakhstan; Shevchenko, in western Kazakhstan, and Taboshara in the south.
Ukraine is a large producer of a number of important mineral products including coal, iron ore, manganese ore, steel and ferro-alloys and is also a lesser producer of other products including concentrates containing ilmenite, rutile and zircon, nickel, mercury and uranium. Metallurgical plants produce metallic titanium, magnesium, mercury and nickel. Ukraine also produces a large number of industrial minerals including graphite, potash, salt, dolomite and limestone fluxes, kaolin, quartz and building materials.
According to official Ukrainian statistics, in comparison with output in 1991, production of iron ore fell by 11.5% in 1992 to 75.7 Mt, marketable manganese output fell by 12.2% to 5.8 Mt and steel output fell by 7.2% to 41.7 Mt. In the fuel sector, production of coal fell 1.5% to 134 Mt and coking coal output fell by 0.8% to 54.9 Mt.
The alumina refinery located in the port city of Nikolayev was one of the largest and most modern in the former Soviet Union with a capacity to produce over 1 Mt/y of alumina; it was designed to operate on imported bauxite from Guinea. This new refinery was originally intended to supply the new aluminium smelters in Tursunade (Tajikistan) and Sayanogorsk in Russia but with the break-up of the Soviet Union and the civil war in Tajikistan, the Nikolayev refinery is no longer committed to continuing its level of shipments to these former customers. Another alumina refinery, the Dneprovsk located at Zaporozhye, is also based on bauxite imported through the port of Nikolayev, but this refinery is smaller than that at Nikolayev itself. The bauxite is imported primarily from Greece, Hungary and Yugoslavia. The Dneprovsk plant is smaller and older and could require substantial renovation. This refinery is integrated with the Dneprovsk aluminium smelter which has a capacity of slightly over 100,000 t/y of primary aluminium. In 1992, Dneprovsk was operating at nearly full capacity.
Ukraine has more than 300 coal mines. In 1992, production decreased at about half of these operations. Ukrainian steel mills were not receiving enough coal from the Donets Basin (Donbas) and were forced to reduce the production schedules of coke oven batteries. Ukraine's coal industry is not producing in adequate quantity the types of coal needed by its industrial customers. In addition, Ukraine's coal industry, owing to the curtailment of economic ties with Russia, is not receiving sufficient equipment for its mines.
Ukraine currently has virtually no gold production but has significant undeveloped gold deposits in the Carpathian mountains region as well as reported gold discoveries in other regions. Exploration and preliminary development work has started and, in view of the importance of these deposits to Ukraine's economy, it is envisaged that development will occur. In the major Krivoy Rog iron ore mining basin, gold production has already begun from local ores.
Plans call for Ukraine to begin producing iodine. Ukraine consumes about 400 t/y of this commodity, of which in 1992 some 80 t was imported from other C.I.S. countries and the rest from other foreign producers, particularly Chile.
Uzbekistan, the third most populous state of the former Soviet Union and the fourth largest in land area, is also a major producer of gold, non-ferrous metals and natural gas. The non-ferrous metals industry includes the mining of bismuth, copper, tungsten, molybdenum, lead and zinc and the production of copper, zinc and other metals at the Amalyk metallurgical complex.
Uzbekistan's gold output of about 80 t/y is a significant source of the country's hard currency earnings. There are plans to develop new gold fields, introduce new mining equipment at existing operations, and build a new plant to produce refined gold, with a view to doubling gold extraction in the near future. The major increase in gold production is planned to come from the Kauldy deposit where the ore averages 9 to 29 g/t and also from the Kokpatasskoe deposit where development has already begun.
Gold production will also be significantly increased by employing leaching technology at the large dumps at Uzbekistan's major gold field, Muruntau. Newmont Mining Corp is engaged in a joint venture to process the material in these dumps. The European Bank for Reconstruction and Development (EBRD) has announced that it intends to help finance the Newmont joint venture.
Uzbek geologists report having prepared three vein silver deposits for industrial exploitation in the central Kyzylkum region. The silver ores also contain gold, platinum group metals, cobalt and nickel, which can be recovered as by-products. Based on these reserves, Uzbekistan has the potential to triple silver production in the near future.
Plans call for the development of a celestine ore deposit in the Surkhandarinskaya region of southern Uzbekistan to extract strontium; development will be by open-pit mining. Foreign funding is being sought for this project.
Armenia's mineral industry is primarily engaged in mining non-ferrous ores and industrial minerals. The country has large molybdenum reserves and was mining one-third of the former Soviet Union's output of molybdenum. Armenia has a gold mining industry and its non-ferrous products include lead, zinc, silver, rhenium, selenium, tellurium and barite. At one time Armenia had a large metallurgical industry but this was mostly shut down in the 1980s for environmental reasons.
Azerbaijan, since before the revolution of 1917, has been an important oil and gas producer and is also a producer of iron ore, alunite, alumina and aluminium, copper, molybdenum, lead and zinc. It also produces industrial minerals including iodine and bromine, clays, gypsum, limestone, marble, decorative building stone, sand and gravel, and precious and semi-precious stones.
In Belarus, mineral production consists primarily of the mining of potash and peat. The government is encouraging geological exploration for coal, iron ore, industrial minerals, oil and gas.
Georgia has a diverse industry producing fuels, ferrous and nonferrous metals, ferro-alloys and industrial minerals. Georgia is a major producer of manganese from the Chitataura deposit, although reserves of high grade ore are almost depleted. The manganese is used in Georgia for ferro-alloy production. At the Madneuli complex, a copper-barite polymetallic ore deposit is exploited for copper, barite and a range of by-product minerals, including gold and silver. Lead and zinc are mined at Kvaisi.
Along with some mercury, antimony and industrial minerals, Kyrgyzstan also produces oil, gas and coal but is still significantly dependent on imported energy. Kyrgyzstan's 1992 oil production of 125,000 t/y, coal production of 2.6 Mt/y and natural gas production of 55 million |m.sup.3~ were far below its consumption levels.
The Kadamzhay plant in Kyrgyzstan was the sole producer of antimony metal in the former Soviet Union; it has the capacity to produce up to 20,000 t/y. Russia in the past had supplied Kadamzhay with 70% of its raw material; 12% was supplied by Tajikistan and 18% by local Kyrgyzstan sources. With the break-up of the Soviet Union, the raw material supply for Kadamzhay is no longer secure.
The reported gold production in Kyrgyzstan in 1992 was just over 1,000 kg. The country is seeking foreign investment to help develop its gold industry, which formerly produced around 5,000 kg/y. In 1992, Cameco Corp. signed an agreement to develop the Kumtor gold deposit in the Issyk-Kulskiy region. This is reported to be the third largest gold deposit in the former Soviet Union, with reserves estimated at 360 t gold.
Non-ferrous metals mining is the leading sector of Tajikistan's mineral industry, with production of antimony, mercury, molybdenum, tungsten and other metals (MM, January 1992, pp 6-9). Tajikistan also produces oil, gas, coal, rare and precious metals and industrial minerals.
The Tajik aluminium plant in Tursunzade became part of a new 33 member joint stock company, Aluminy, which is comprised of the major aluminium industry enterprises in Russia, Azerbaijan, Kazakhstan and Ukraine. The Tajik plant, with a production capacity of 500,000 t/y, had a reduced output in 1992.
The Anzob plant produces 17,000 t/y of mercury/antimony concentrate which is supplied to plants in Kyrgyzstan. Tajikistan, which has considerable reserves of these metals, is planning to construct metallurgical facilities to obtain greater added value.
The mineral industry of Turkmenistan is based primarily on the extraction of natural gas. There is also production of oil and a number of important industrial minerals including iodine and bromine, sodium sulphate and other sodium compounds, sulphur, salt, gypsum, clays and construction materials.
Moldova has a small mineral industry, accounting for less than 1% of its industrial output. Its principal products are industrial minerals, including gypsum, limestone, dimension stone, sand and gravel.
The mineral industries of Latvia, Lithuania and Estonia consist primarily of the mining of peat and a range of industrial minerals used in the construction industry, such as limestone, clays, sand and gravel. Some oil shale is also produced in Estonia, dolomite and gypsum in Latvia.
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|Author:||Levine, Richard M.|
|Article Type:||Industry Overview|
|Date:||Jul 1, 1993|
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