Manufacturers of Copper Ingots from Russia

Copper was one of the first metals that human civilization recognized and began to use. It retains a key position in the global economy. Russia is a country that for many years remains one of the largest producers supplying copper and copper products to the world market

Copper occupies one of the key positions in the global industry. Due to its high thermal and electrical conductivity, it is widely used in electrical engineering, and its high mechanical strength and suitability for machining make it indispensable in pipe production for internal systems.

Copper mining in Russia brings very fruitful results. And the fact that the Russian raw material base consists of 40% copper-nickel sulfide deposits, and 19% sulfide deposits, gives Russia a significant advantage over other countries.

[edit] Production

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Copper production in Russia
There are only four notable producers of refined copper in Russia - these are Norilsk Nickel, Uralelectromed (part of the UMMC holding), Kyshtym Copper Electrolytic Plant and Novgorod Metallurgical Plant (owned by the Russian Copper Company). Norilsk Nickel is the leader in terms of copper production, producing a total of almost 50% of this metal in our country. The growth of this production in 2005 was (according to the company) 1.1% compared to 2004. The volume of copper production in 2005 at MMC Norilsk Nickel almost coincides with 2003 and is inferior to 2002.[1]

The largest copper producers in Russia (according to 2005 data):[2]

• Norilsk Nickel - 452 thousand tons
• Uralelectromed - 353 thousand tons
• Kyshtym Copper Electrolyte Plant - 82.6 thousand tons

In total, 861 thousand tons of copper were produced in Russia in 2002, in 2003 - 855 thousand tons, in 2004 - 909 thousand tons, in 2005 - 929 thousand tons.[3]

What prospects does the copper market offer for investors?

Copper is one of the first metals well mastered by man.

Thanks to the combination of ductility, good electrical conductivity and high heat capacity, the metal is indispensable in a number of industries, such as electrical engineering, pipeline industry, chemical industry, as well as in medicine, architecture, jewelry and other fields. Global copper production in 2022 was 23.5 million tons.

The growth in demand for metal in recent years has averaged 3% per year. The largest share of copper production in the world occurs in South America, which has the largest reserves of the metal. Chile and Peru mine about 40% of the world's copper. Significant volumes of metal are mined in China, which is also a key consumer. It accounts for 40% of total global demand. Accordingly, the growth or stagnation of the economy in the Middle Kingdom directly affects demand, and therefore copper price quotes.

Russia accounts for about 3-4% of global production. But in terms of reserves, our country is in second place in the world after Chile (data from the Ministry of Natural Resources of the Russian Federation). But it is worth noting that due to the difference in assessment methodology, data from the US Geological Survey gives second and third places in terms of reserves to Australia and Peru.

Copper prices

The International Copper Study Group (ICSG) records key trends in the copper market regarding its use, reserves, prices and trade in metal products in its monthly newsletters.

ICSG (International Copper Study Group) is an intergovernmental organization of metal producing and consuming countries that functions as an international commodity council. Its main goal is to increase market transparency and promote international debate and cooperation on copper-related issues.

Membership of the ICSG is open to any state that is involved in the production, trade or consumption of copper. For 2022, ICSG unites 26 countries, including Russia.

The market also monitors forecasts from the World bureau of metal statistics, which maintains an extensive database of metal markets and is the largest provider of industry statistics.

The largest volumes of copper futures trading take place on the LME (London) and COMEX (New York) exchanges. The main pricing takes place on these sites, which mainly depends on the global balance of supply and demand in the physical market, as well as on the expectations of hedgers and speculators.

For the copper market, the second half of last 2022 passed on an optimistic note. Expectations of metal shortages stimulated a price rally and active production increases by key players. According to market experts, supply growth will lag behind Chinese demand growth until 2022 due to low investment in new mines in previous periods.

However, much of the 2022 growth has been erased this year. Not least of all, the reason for the decline was fears of trade wars between the US and China, due to which the global economy could slow down, which would negatively affect the demand for raw materials. Analysts see serious risks for commodity markets from this factor in the next year or two.

Analyst surveys expect metal prices to average around $7,000 a tonne in 2022, a level seen as the average price needed to stimulate investment in new mine development. Demand growth will remain at 2.5-3%, while supply growth will gradually slow down until 2022.

S&P Global Ratings specialists are more conservative in their forecasts. Experts expect average metal prices of about $6,100 per ton in 2022 and a slight increase in 2022 to $6,200. In addition to trade wars, agency experts note a negative impact on the market from rising interest rates in the United States and the strengthening of the dollar.

The longer-term outlook for copper remains largely positive. The optimism mainly stems from expectations of growth in the electric vehicle industry, which requires 3-4 times more copper to produce than conventional gasoline cars.

Opportunities for investors

Unlike gold or platinum, purchasing physical copper for investment purposes does not make sense. Copper itself is mainly in demand from industry, and in jewelry it most often acts as an additive to gold jewelry to increase hardness.

Anonymized metal accounts for copper are also almost never practiced. Therefore, for an investor, the most successful way to invest in copper is exchange-traded instruments.

Copper futures

Copper futures contracts are traded on the London and New York exchanges. They are also available on the Russian market. The Moscow Exchange offers investors settlement futures with execution in 3 and 6 months, linked to quotes of the corresponding contracts on the LME. In practice, contracts are not popular. The specification of contracts on the Moscow Exchange can be viewed on the corresponding page of the official website of the exchange.

If liquidity is an important consideration, then it is better to pay attention to futures on the COMEX and LME exchanges. But it’s worth considering that the contracts there are more deliverable, so if you don’t plan to buy copper in volumes of 25 tons (minimum lot) or don’t plan to deliver it to anyone, then you will need to close the entire position before expiration.

On these same exchanges, investors have access to options for trading on the corresponding contracts, which significantly expand the range of possible trading strategies.

Copper ETFs

A simpler tool for investors would be copper ETFs.

Read what an ETF is and how to use it in the article “ETF: The Future of the US Market” .

The ETF market is most widespread in the United States. Well-developed regulation reliably protects the interests of the investor. Through the benefits of collective investing, ETF investors have the opportunity to benefit from the growth of a wide range of different assets, including financial instruments linked to copper prices.

Copper ETFs can be designed to track copper futures prices or mimic the performance of mining companies' portfolios. The most popular ETFs from these classes are:

Global X Copper Miners ETF (COPX) - An ETF issued by Global X, tracks the Solactive Global Copper Miners Index, which includes companies engaged in copper exploration, mining and production.

United States Copper Index ETF (CPER) - this fund copies the Summer Haven Copper Index Total Return Index, forming a portfolio of exchange-traded copper futures.

First Trust ISE Global Copper Index ETF (CU) - First Trust's fund tracks the ISE Global Copper Index, which includes copper ore mining companies.

The iPath DJ-UBS Copper Total Return Sub-Index ETN (JJC) is an exchange-traded note issued by Barclay's iPath linked to the Dow Jones-UBS Copper Sub Index Total Return. This note mirrors the performance of COMEX copper futures contracts.

Shares of mining companies

Another option for investing in copper is to buy shares in mining companies. On the Russian market, the representative of the industry is MMC Norilsk Nickel, whose revenue is generated by almost a third from sales of copper products. Other large metal producers are Ural Mining and Metallurgical Company (RMK), but their shares are not traded on the stock exchange.

You can find a large number of different companies on foreign trading platforms. The largest market players are:

Investing in mining stocks offers a number of advantages over futures or ETFs. By becoming a shareholder in a company, you can claim a portion of the profits in the form of dividends. In addition, you benefit not only from rising copper prices, but also from the organic growth of the company itself.

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[edit] Export

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Export of copper from Russia
In 2002, copper exports from Russia amounted to 493 thousand tons (57% of production volume in Russia), in 2003 - 408 thousand tons (48%), in 2004 - 338 thousand tons (37 %), in 2005 - 308 thousand tons (33%).[4]

In 2010, 458 thousand tons of refined copper worth $3.31 billion were exported from Russia.[5][6]

In 2011, exports of refined copper from Russia amounted to 184 thousand tons.[7]

Today, copper is one of (if not the most) valuable non-ferrous metal in the world. Copper has high electrical and thermal conductivity (the second highest electrical conductivity after silver), which explains the unlimited use of copper in the development and design of electrical systems, heat-dissipating parts of various installations, etc.

However, the extraction of copper ore and the subsequent production of copper concentrates is a very labor-intensive process, since the copper content in the ore usually does not exceed, at best, 10%, while the more common value of copper concentration in the ore ranges from 0.5% to 3%. Another problem in obtaining finished copper concentrates is that copper is often found in combination with zinc, lead, gold, silver and other metals, which also affects the complexity of the copper ore beneficiation process.

The main deposits of copper ores in Russia are concentrated in the Urals, eastern Siberia and the North Caucasus. The list of the main Ural deposits located in the Sverdlovsk region includes Kirovogradskoye, Revdinskoye, Degtyarskoye and Krasnouralskoye. Copper mining is also carried out in such regions as Chelyabinsk and Orenburg. Significant copper deposits are concentrated in the Krasnoyarsk Territory: Norilsk, Talnakh, Oktyabrskoye deposits.

The largest and most unique copper deposit in Russia , which is located in the Chita region and is known as the Udokan deposit . The reserve of copper ore at the Udokan deposit is approximately 24.6 million tons, and ranks third in the world. The field received its name because of its geographical location, being located 30 kilometers south of the Novaya Chara railway station in the Trans-Baikal Territory on the Udokan ridge. The rock of the Udokan deposit is copper pechanniks, the ores are almost monometallic copper and contain only a small admixture of silver. The uniqueness of this deposit is manifested in the fact that the mineral composition of the mined ore is characterized by exceptional consistency. The deposit itself was discovered in 1949 by an expedition of the first main directorate of the USSR Ministry of Ecology. However, due to incorrect conclusions about the depth of copper ore, further research was not continued.

The Udokan pilot industrial plant (OPU) was accepted into operation by the state commission on February 15, 2006, and included mining, processing and hydrometallurgical equipment for processing non-ferrous, ferrous, rare, and precious metal ores to obtain marketable products.

In 2008, the license for the right to develop the deposit was sold to the Metalloinvest holding for 15 billion rubles. After 5.5 years, the company committed to extract 12 million tons of ore per year from the deposit, and after seven years - 36 million tons. To build infrastructure to ensure high productivity of further copper mining, Metalloinvest promised to create a consortium with the state corporation Russian Technologies.

By 2010, about 15 thousand meters of verification, geological and geomechanical wells were drilled, more than 1.2 thousand meters of ditches and more than 2.5 thousand meters of underground mine workings were tested, more than five thousand furrow and core samples were taken for analytical work. Based on the results, it was established that the copper reserve of the Udokan deposit is 25.7 million tons of copper, 2.7 billion tons of ore with an average metal content of 0.95%. The development of the Udokan deposit is carried out using open-pit mining.

Unique deposits on a global scale include the Talnakh and Oktyabrskoye deposits of copper-nickel ores. Many geologists consider the Oktyabrskoye field to be a continuation of the single Talnakh field. The Talkhanskoye deposit is located in the north-west of the Siberian platform, it was discovered in 1960 by the Norilsk geological exploration expedition, three years later the excavation of the shaft of the Mayak mine began. The mine itself became fully operational on April 22, 1965. The deposit is currently being developed underground. The length of the mine field is 12 km, the maximum width is 3.5 km. The occurrence of the rocks is monoclinal, dipping to the northeast at angles from 5 to 15°. Three types of ores are distinguished: disseminated in parent rocks, continuous sulfide ores in the base of the intrusion, disseminated-veined in exocontact rocks. The ore composition is dominated by pyrrhotite, pentalandite and chalcopyrite.

The license to develop the deposit belongs to OJSC MMC Norilsk Nickel. In 2011, the company produced from the deposit: nickel - 55.9 thousand tons, copper 72 thousand tons.

The Degtyarskoye deposit is located in the Ural copper-pyrite belt, was discovered in 1888, and was put into industrial development in 1914. The ribbon-shaped ore deposit can be traced at a distance of about 5 km and pinches out at a depth of more than 600 m. The main ore mineral is pyrite. The deposit was developed underground, but was closed due to unprofitability, although the ore was not mined.

Thus, based on the dynamics and chronology of the development and study of copper deposits, we can say that significant interest has been and is being given to copper. Despite all the difficulties, copper deposits are one of the primary deposits to be developed, which is due to the widespread use of copper in industry and everyday life of people and society.

[edit] Notes

1. Secret portrait of non-ferrous metallurgy[1][2][3]
2. Secret portrait of non-ferrous metallurgy[4][5][6]
3. Secret portrait of non-ferrous metallurgy[7][8][9]
4. Secret portrait of non-ferrous metallurgy[10]
5. Exports of basic goods to the Russian Federation in 2010[11]
6. RUSSIA 2012. STATISTICAL GUIDE
7. RUSSIA 2012. STATISTICAL GUIDE
8. Secret portrait of non-ferrous metallurgy[12]
9. Secret portrait of non-ferrous metallurgy[13][14][15]

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Category: Trade in Russia | Copper in Russia

Copper industry in Russia

In the Urals and Western Siberia, no, no, and even the most ancient mines from the Stone Age are found. Our forefathers worked there, extracting copper ores for the invaders, among other minerals.

Although, according to official sources, non-ferrous metals were practically not mined in Rus' until the 18th century.

Non-ferrous metallurgy of the Russian Empire

The experience of the first sovereign copper smelters, which appeared in the period 1638-1640, when copper deposits were discovered on the river. Kalkarke, was unsuccessful. There was not enough ore to supply the load. Less than ten years later, production had to be stopped and the factories themselves closed.

Peter's reforms gave a new impetus to the development of the mining industry - he transferred the exploration and processing of non-ferrous metal ores to private hands. The Berg Collegium, created by the emperor, served as a kind of Ministry of Geology (if we draw analogies), deciding who should be given the authority to search for and develop ores, and who should not.

Moreover, there was no need to talk about “rich deposits”. There were small springs in the Olonets province and on Pechora, but they were clearly not enough for the needs of the domestic market. So the main supplier of non-ferrous metals for the Russian Empire was Europe. And the military-strategic position of Rus' required as much iron and copper as possible. They were called the metals of war. Developments in the Urals were supposed to improve the situation.

In 1750, 72 iron and 29 copper smelters in Russia produced finished products. But already by the 90s, two enterprises of the Bogoslovsky and Votsky districts represented the entire Ural production.

“On the western slope of the Urals, which was once covered with a whole series of copper smelters, only one Yugovsky plant continues to operate with a capacity of only about 40 tons of copper. All over the eastern slope of the Urals, from the north from the Bogoslovsky plants to the Preobrazhensky plant in the south of the Urals, there are once operating copper smelters and mines, most of which have not been developed for several decades" (L. B. Kafengauz "The Evolution of Industrial Production in Russia ").

Rice. 3. View of the Miass copper smelter in the Urals. 1773 Source: website infourok.ru

And only at the end of the 90s there was a shift in the development of the copper industry - a shift that began to rise only at the beginning of the 20th century, turning the copper industry into one of the fastest growing industries. Since 1906, a truly fantastic growth in copper production began, and in 7 years it grew 3.6 times.

And even the decline, when the country was going through hard times, revolutions and wars, and it lasted no less than 15 years, did not prevent Soviet Russia from achieving considerable success in the copper industry.

Today's copper industry in the Russian Federation

Russia has remained for many years a major supplier of copper and copper products to the world market. In 2016, 860.1 thousand tons of refined copper were produced here. Copper production amounted to 844.7 thousand tons.

Rice. 4. Open-pit copper mining at the Gaisky GOK UMMC Source: website

Copper production centers

The location of industry enterprises is influenced by certain factors:

• raw materials;
• energy and fuel;
• consumers.

Rice. 5. Distribution of copper reserves and resources in Russia Source: website met-all.org

Mining operations are typically located close to mines in copper mining areas.
The key factor is the raw material factor. Tab. 4. Main deposits

Source: website chelindustry.ru

The Russian copper industry remains highly concentrated. The market is controlled by three largest enterprises (production based on operating results in 2016):

• MMC Norilsk Nickel;
• UMMC holding (Uralelectromed);
• CJSC Russian Copper Company.

Rice. 6. Distribution of production volumes between the largest enterprises in the copper industry, percentage Source: company data

Each of the listed organizations has its own mineral base.

Export and import of copper

Despite the decline in production volumes, the export of these products, on the contrary, is growing. According to the customs service, in 2016 it amounted to 702 thousand tons. Mainly:

• cathodes and cathode sections made of refined and unprocessed copper (70.7 percent);
• refined copper wire with a maximum cross-sectional size of more than 6 mm (23.8 percent);
• alloys and rods made from them, powders of non-layered structure and other products.

Russia imports copper, 69.1 thousand tons in 2016 - precipitated copper, refined copper waste, refined copper wire and a wide variety of products made from copper and its alloys.

The main regions supplying copper products from Russia: Krasnoyarsk Territory (33.3%), Sverdlovsk Region (30.6%), Chelyabinsk Region (17.6%). The industry's products are sent to the Netherlands (33.99%), Greece (14.7), Kuwait (14.4), Germany (11.66) and other countries.

Among the leading suppliers in the Russian Federation were the following countries: Finland (24.5%), Kazakhstan (20.9), China (12.2), etc. Their products arrived in the Murmansk region (21.3%), Sverdlovsk region (20. 9), Moscow (14.3), St. Petersburg (12.4), etc.