«DEVELOPMENT OF MARINE RUSSIAN-NORWEGIAN TRADE FACILITIES IN NORTHERN NORWAY Prefeasibility study Akvaplan-niva AS Report: 4673-01 This page is ...»
Platts Coal, 18 April 2011: Russia aims at boosting coal exports, mainly to Asian markets.
Reuters, 2 July 2010: Russia's Vostochny sees 2010 coal exports up 20 pct.
www.suekag.com/ports/seaborn Coal Mining in Russia, market summary - www.russiancoal.com 8 million tons of coal over Murmansk port. The monthly export was expected to be 600 000 tons, to be transported with vessels with capacity of 65 000 tons. 47 Also the major Geneva-based crude oil trader Gunvor has entered into the global coal trade, starting in 2010.
Worldwide, coal futures are being offered for sale on NYMEX and ICE. The prices in Northwest Europe have been developing from USD 36 per ton in 2000 to USD 92.50 in 2010. 48 Phosphates The Khibiny Mountains in the southern part of Murmansk region is one of Russia's most important sources of economic minerals, with deposits of iron, copper-nickel, other non-ferrous and rare metals, phosphates, mica, clays and many other types of minerals. It is the largest alkaline intrusion in the world with an area of 1327 km2, and together with deposits in nearby Kovdor and Lovozero it holds 92.5% of all phosphorus reserves in Russia.
Normally, the mining output here is 11 million tons ore annually, which constitutes almost 100% of the total Russian phosphate production and about 8% of the total global production.
Two main companies are currently mining and processing the phosphates of the Kola Peninsula – Kovdorskiy GOK and Apatit JSC.
Kovdorskiy GOK is an integrated mining and processing facility and is the second largest producer of apatite concentrate in Russia; it is the only producer of baddeleyite concentrate in the world. It is owned by EuroChem, Russia’s largest mineral fertilizer producer and among the top three European and top ten global producers by nutrient capacity. 49 In Khibiny, the company exploits deposits of complex baddeleyite-apatite-magnetite ores and low-grade iron-apatite ores. The processed outcome of commercial magnetite, apatite and baddeleyite in 2007 was 5.2 million tons, 2.5 million tons and 7.4 million tons respectively.
Apatit JSC, controlled by the Russian fertilizer giant Phosagro 50, is the largest apatite-nepheline extracting and processing company in the world. It's extraction of apatite in Khibiny exceeds 80% of Russia's total output; while it's extraction of baddeleyite in the same are constitutes almost 100%. The ore is processed at nearby plants, and the annual production is 8.5-9 million tons of apatite and around 1 million tons of nepheline concentrates.
Northwest Phosphorus Company, a subsidiary of the Russian nitrogen fertilizer produces Acron, is presently planning to produce its own phosphate in the Khibiniy Mountains. It intends to develop an open pit mine in the Oleniy Ruchei deposit and a first stage processing plant in 2012 with an annual output of 1 million tons of apatite concentrate. 51 By 2016 the output is expected to be doubled. 52 www.suekag.com BP Statistical Review of World Energy June 2011, p. 30.
www.eurochem.ru BarentsObserver, 23 November 2011.
The Geological Society, Geoscientist Online, August 2011.
Bloomberg News, 26 July 2011.
Aluminum In 2010, Russia manufactured 3 850 000 tons of aluminum, constituting 9.3% of the global production and making it the second largest producer in the world after China. 53 The Russian company Rusal is the world's largest aluminum manufacturer. It also controls the main Russian deposits of bauxites, the raw material for aluminum, located in the Central Urals.
Rusal also controls 15% of the shares in Norilsk Nickel, the world's largest producer of nickel.
Rusal produces and exports to 70 countries and holds 10% of the world's aluminum and alumina market. It manufactures 4.1 million tons of aluminum and 11.7 million tons of alumina annually. Sea shipments are made via 18 ports in Russia, Baltic States, Finland and Ukraine.
Rusal's smelter in Kandalaksha is the northernmost one in Russia. It manufactures 76 000 tons of aluminum annually, which is being exported over the ports of Murmansk. Another smelter in the north is located in Nadvoitsy in the Republic of Karelia The company's priority is to sell its products through own worldwide trade representative offices, and to create long-term relationship with clients/end customers. 54 Timber Russia is by far the world's largest log exporter, and the country's timber industry is in process of transforming to more efficient and vertical structures at the same time as changes in Russian legislation is aiming on reducing the export of round timber and increasing the export of processed wood.
The first quarter of 2011, the Russian export showed a 40% increase compared with first quarter 2010. The introduction of a log export tax on unprocessed timber, in force from 2007, resulted in a more than 50% reduction of the export between 2006 and 2010 - from 51 million m3 to about 22 million m3. This tax is presently reduced and being reconsidered.
Russian export of softwood lumber is also increasing, especially to Asian countries and to Egypt.
China is the largest market for Russian logs; shipments have tripled between 2007 and 2010, and first quarter 2011 showed a 150% increase compared with same period in 2010. 55 Russia's forest resources are estimated to 1 183 682 hectares, and the stand of timber is estimated to 83.5 billion m3. The Far Eastern and Siberian federal districts combined hold 65% of Russia's timber, while Northwestern Federal District holds 10.4 billion m3 – or 12.5% of the resources. 56 US Geological Survey, January 2011.
www.aluminiumleader.com; www.rusal.ru Wood Resources International LLC, 9 May 2011.
Russian Timber Industry Digest Summary 2010, p. 9.
Arkhangelsk is one of the leading timber-industrial regions in the country. The region ranks second in terms of timber reserves in Northwest Russia, holding 1.8 billion m3 for commercial use and processing. 57 The annual cut in 2007 was 10 million m3, but lack of road infrastructure is an obstacle for further utilization of the wood resources in the region. 58 Arkhangelsk has three large pulp and paper mills and seven large sawmills. Sawmill #25 is the largest sawmill in Northwest Russia, being owned by the Titan Group. In 2010, the cut rate was 771 000 m3 of logs, and the annual output of sawn products exceeds 349 000 m3. The company exports 99% of the production from Arkhangelsk port to several EU countries, Switzerland and Israel, using ships from Northern Shipping Company (NSC) and the Dutch company Wijnne & Barend. 59 Arkhangelsk Pulp and Paper Mill (PPM) in Novodvinsk, controlled by the Austrian company Pulp Mill Holding GmbH, is also one of the leading wood chemical manufacturers in Europe. In 2009, the share of the mill in total Russian pulp and paper production amounted to 18% for containerboard, 11% for pulp and 33% for school exercise books. 60 In 2007, Arkhangelsk PPM exported 40% of the production. 61 Timber Plant #3 (LDK-3), controlled by the Swedish RusForest AB, is one of the largest sawmills in Arkhangelsk. It has a monthly production of 8000 m3 sawn wood and 1800 – 2000 m3 planed products. It has a drying capacity of approximately 160 000 m3 per year and export storage areas for 20 000 m3 of finished products. From the company's own dock with cranes for direct loading, it is capacity for shipments of at least 400 000 m3 sawn wood per year. 62 The industry in Arkhangelsk is also in process of developing large scale production of wood pellets for the export market. One of the projects, being developed by LDK-3, aims to be the second largest pellets producing unit in Russia, with an anticipated output of 500 000 tons per year. 63 The Republic of Karelia is another large wood processing region in Northwest Russia, having a long border with Finland in the west and seaports at the White Sea in northeast. 82% of the republic is covered with forest, and the timber reserve is estimated to 910 million m3.
In 2008, Karelia's production share in the Russian market included 24% of the paper, 35% of the newsprint, 59% of paper sacks, 6% of timber and 4% of lumber. 64 Among the largest wood-processing companies are Medvezhiegosky LPKh and Segezhsky LDK, both controlled by Investlesprom, the largest forest industry company in the European part of Russia, Sweedwood Karelia, controlled by the Swedish IKEA Group, Ladenso, controlled by the Finish Stora Enso Group and Solomensky LZ, controlled by the Russian Aspec Group.
Arkhangelsk oblast, 2010: Economic and Investment Potential of Arkhangelsk Region.
Dimitriy Zylev, CFO Arkhangelsk PPM, 20 June 2007.
www.sawmill25.ru Press Release from Arkhangelsk PPM, 18 November 2010.
www.rusforest.com/ldk-3 RusForest Press Release 22 December 2010.
Republic of Karelia for investors: Nature and Resources Potential.
Fisheries The Russian North contributes to 22% of the country's fisheries, while the Far East contributes with 66%. In 2010, the total Russian seafood export was 1.7 million tons of all kinds. In 2011, the export volume were on the same level. 65 The Arctic Russian fishing fleet is doing commercial fishing in the Barents Sea, Norwegian Sea, in the fishing zone around Faroe Islands, the NAFO/NEAFC Convention Areas and Spitsbergen. The most important species are Atlantic cod, haddock, pollock, blue halibut, redfish, mackerel, herring, capelin and shrimps.
The catch volume varies between the years, depending on the annual quotas and the nature itself. Around the turn of the century the population of Atlantic cod in the Northwestern Basin (Norwegian and Barents Seas) was very low, giving only 430 000 tons of cod and 62 000 tons of haddock as quota in 2000, while an opposite situation in 2011 gives 758 000 tons of Arctic cod and 310 000 tons of haddock as record high quotas in 2012. Russia's share is 42% of cod and 45% of haddock. 66 The Russian fishing industry in Murmansk consists of about 170 fishing- and processing companies with more than 15 000 employees. 102 companies are doing ocean fishing, while 54 companies and single-person enterprises are fishing in coastal waters. 60% of the Russian catches in the Barents Sea is done by 21 Murmansk based companies, and the region's share of the annual catches in Russia is 19%. 67 The Murmansk based fishing companies are transporting significant volumes of frozen cod from the Barents Sea by ship directly to the ports of Murmansk, St Petersburg, Kaliningrad and Arkhangelsk.
In 2010, almost all the Russian quota of Atlantic cod and around 70% of the haddock was exported. The Russian export of whole frozen Atlantic cod was 172 700 tons calculated to round weight, while export of frozen cod filets was between 85 400 and 109 700 tons, depending on processing with/without skin/bones. In addition, there was also export of smaller volumes of salted, dried and minced cod.
In 2010, half of the exported whole Atlantic cod went to the Netherlands. Other large markets were Virgin Islands, Norway, UK, Germany, Portugal and Cyprus. Holland also bought nearly 60% of the frozen cod fillets, while UK and Spain also bought significant quantities.
The Russian export of frozen whole haddock was 43 057 tons calculated to round weight, while export of frozen fillets was between 27 200 and 34 000 tons, depending on the type of product.
UK and Holland are the key markets for Russian haddock. 68 Norwegian Seafood Export Council, Russian export statistics 2005-2011.
Press Release with attachments from the Ministry of Fisheries and Coastal Affairs, 14 October 2011; Press Release from the Ministry of Fisheries, 19 November 1999.
Ramboll: Statistics for catches of cod in the regions ICES I, IIa, IIb.
Norwegian Seafood Export Council, Russian export statistics 2005-2011; The Norwegian Directorate of Fisheries.
The export of Atlantic cod to Norway in 2010 was 70 000 tons round weight – or 27% of the Russian quota. The volume was a slight increase compared with 2009. The export of haddock was 29 000 tons – also 27% of the Russian quota. There was no export of shrimp to Norway in
2010. The majority of the Russian fish to Norway is being discharged in the North, mainly in Kirkenes, Båtsfjord, Hammerfest and Tromsø. The rest, some 10%, is discharged in Kristiansund and Ålesund on the southwest coast. 69 The Norwegian Directorate of Fisheries' Statistics Bank.
The Significance of a Northern Transport Hub There is a general attitude that if and when the Northern Sea Route is opened and becomes accessible for commercial transit traffic between Asia and Europe – USA, there will be a need for large and efficient ports for transshipment in both ends of the route. Some think that these ports will be developed as mega-hubs where large ships will service the East and West trade, and smaller vessels would then transport the transshipment cargo North and South from these mega ports. 70 On the Western end, Arkhangelsk has ambitions to fill the role as a hub for the Northern Sea Route (NSR). The regional government is an active promoter of this idea, based on the fact that the city historically has been the center of NSR. Murmansk, being the only Russian Arctic ice-free and deep-see port where atomic ice-breaking fleet located, currently is and obviously will be in the coming future the main harbor for serving NSR Besides basic requirements for a hub port, the way it could be developed is depending on several factors with the cargo owners and forwarders: ownership, types and volumes of cargo, frequency, types of vessels, space, required cargo handling, required distribution, and availability of sufficient and skilled labor.
For North Norwegian ports to play a role as future cargo hubs, these elements will define who can provide the key services. If, for instance, the cargo owners do not only want to redistribute the cargo from ship to ship, but also want to distribute cargo to the hinterland, the connected infrastructure (distance, railroad and quality of roads) will be a key element.
Cargo hubs generally require efficient and smooth logistics. In addition, the cargo flow passing through a hub might also create a basis for local trading, repacking, processing, retail and redistribution. This will then turn the maritime hub into a maritime trading facility.
An Arctic Dream – The Opening of the Northern Sea Route, p. 29.
European Union In 2001, the EU Commission issued the white paper "European transport policy for 2010; time to decide" 71. The document did not have any Arctic perspective, having focus on reduction of CO2 emission and pollution in shipping.