News: The crisis in Ukraine will naturally have an impact on the mining industry globally. What are the early signs of what the current crisis in Ukraine means for the mining industry? And is there an impact on Russian miners specifically?
One of the first major impacts has been that shares in mining companies with operations in Russia have dropped significantly. Alrosa (MCX: ALRS), the world’s top diamond producer by output, has lost more than 40% in share value. The gold miner Polymetal has also dropped around 40% and this seems consistent among companies with significant Russian based assets.
Secondly, Russian mining companies are facing significant supply chain and logistical issues because of the international sanctions placed on Russia. For example, Nornickel, which is one of Russia’s largest miners have cited that airspace closures have made supplying palladium, particularly challenging. This is leading the company to potentially lose contracts according to their biggest shareholder, Vladimir Potanin.
In addition to supply chain issues, there are various reports that another challenge facing Russian miners is how to handle savings they have in foreign currencies. Sanctions almost certainly mean that they unable to access part of their liquid cash.
The Ukraine crisis is also having wider impacts on the industry and environment. Brazilian President Jair Bolsonaro has called for the lifting of mining restrictions in indigenous territories in the Amazon as a way of offsetting potential shortages for fertilisers.
Bolsonaro tweeted: “With the Russia/Ukraine war we now face the risk of a lack of potassium or that its price rises.” He is likely to come under scrutiny from local communities and charities that oppose further mining in indigenous regions.
More news to follow…
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