It is estimated a third of the world’s mineral reserves are in Russia, where the mining market is dominated by Norilsk Nickel, diamond miner Alrosa, and oil and gas giant Sakhalin. These companies invest a considerable portion of their profits in new technology aimed at increasing productivity. Indeed, Norilsk intends to spend US$300-450 million per year between now and until 2015.
The Canadian Association of Mining Equipment and Services for Export helps Canadian mining suppliers market to these companies, and, toward this end, recently recently released a 72-page Russian catalogue. The initiative has proved fruitful: a Canadian company that participated in a recent mining missions to Russia has signed a memorandum of understanding with a Russian company to buy equipment worth $3 million.
On the other hand, with some noteworthy exceptions, there is little investment to enhance the productivity, safety and environmental performance of mines in Russia. Time and again, local Russians express their willingness to do business with Canadian suppliers. They rightly believe that there is a natural fit between the mining technologies of both countries, and that they could benefit from Canadian know-how.
The development of this relationship is contingent upon the continued reform of the judicial and legislative systems in Russia, and on fairness for investors. Once these things are in place, foreign companies will invest in Russia and create opportunities for suppliers. Canadians would be well-advised to begin participating in the Russian market soon, to compete with European firms that are already well-positioned to capitalize on it.
Those interested should consider enlisting the services of Russian speakers, many of whom have emigrated to Canada. Enlisting resourceful and dedicated local representatives is also key. And be prepared to put in some effort: getting to the market may well entail visits to mining areas such as Novosibirsk, Ekaterinburg, Novokusnetsk, Irkutsk and others.
— The author is the director of international market development with the Canadian Association of Mining Equipment and Services for Export. Web-site: www.camese.org
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