Mining in Russia - Mineral Resources

Mineral Resources

Approximately 20,000 Russian mineral deposits have been explored, and more than one-third of these have been mined. The Ministry of Natural Resources cited serious problems in the sector, which included the depletion of reserves and the low discovery rate of new reserves. The system of reporting reserves in the Soviet Union (and which Russia very often employed for its resource reporting) was based on establishing drilling parameters to ascertain the certainty of reserves. Unlike the method used in market economy countries, this method does not include the use of market-based economic criteria to establish the feasibility of developing these resources using current technology at prevailing market conditions. Thus, reserve data based on the Soviet method cannot be compared to market economy definitions of reserves. Furthermore, Soviet data on reserves for many mineral resources was either kept secret or was difficult to obtain, and the same holds true for Russian mineral resource data. By 2005, however, Russian companies had begun to seek exposure to Western markets and stock exchanges to raise money in larger quantities and more cheaply than in Russia. A number of state secrecy laws were repealed, which has led some Russian companies to start reporting their reserves and resources according to the Australasian Joint Ore Reserves Committee (JORC) code of the Australasian Institute of Mining and Metallurgy.