Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
The US imposed sanctions on Russian mining magnate Vladislav Sviblov and several mining companies connected to him, including one that’s developing one of the world’s largest zinc mines.
The sanctions are the latest move against the Russian metals and mining sector, and come after the UK imposed sanctions against Sviblov last month. Sviblov emerged as a significant player in the Russian metals scene in recent years, buying up several mid-sized gold companies, as well as building what was set to be one of the world’s largest zinc mines at Ozernoye in Siberia.
Russia’s gold sector has been largely isolated from the west after the G-7 imposed an import ban last year. However, the Ozernoye mine had drawn the attention of traders including Trafigura Group and Open Mineral, which had been bidding to win a long-term contract to purchase its zinc ore, Bloomberg reported in October.
Now, the US sanctions on not just Sviblov, but also directly on the Ozernaya Mining Company, will make it impossible for western companies to trade with it. Bloomberg also reported in October that two Chinese companies had been seeking an offtake deal with the mine, which is located in Buryatia, a few hundred kilometers from the Chinese border.
At full capacity, the project would be one of the world’s largest zinc mines, accounting for 4% of global output, Russian Minister for the Far East and Arctic Aleksey Chekunkov said on a visit to the site last year. However, it was hit by a major fire last month that’s likely to delay the start of production well into 2024.
Also sanctioned on Tuesday were Highland Gold Mining Ltd., GV Gold, Trans Siberian Gold Ltd. and Kamchatka Gold. The US didn’t give any reason for the sanctions against Sviblov and the mining companies in an accompanying press release, but in February warned that any company or individual operating in the Russian metals and mining sector could be subject to sanctions.
(By Jack Farchy)
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