Russia’s mining industry is undergoing a structural shift as sanctions, higher borrowing costs, and reduced access to Western capital reshape how projects are financed, developed, and marketed. The country remains one of the world’s largest resource holders, but its mining sector is increasingly centred on domestic financial markets, state-backed investment, yuan financing, and Asian customers.
Gold and fertilisers continue to generate foreign-currency earnings, while copper, lithium, and rare earths have moved into strategic industrial planning. Coal, steel, and diamonds face greater pressure from sanctions, weaker demand, and logistics constraints.
Gold remains the strongest-performing mining segment
Polyus, Russia’s largest gold producer, reported 2025 revenue of $8.7 billion, EBITDA of $6.35 billion, and pre-tax profit of $6.3 billion. Results were supported by higher bullion prices despite lower production and sales volumes. The company expects 2026 gold production of 2.5 million to 2.6 million ounces.
Polyus’s largest development asset is the Sukhoi Log gold project in eastern Siberia. The company reports the deposit contains 43.5 million ounces of reserves and 81 million ounces of resources. Reuters has reported that Sukhoi Log is expected to require approximately $6 billion in investment, reach full production in 2029, and contribute to a potential increase in Polyus output toward 6 million ounces annually by 2030.
The project represents a major test of Russia’s ability to deliver a globally significant mining development without traditional Western capital markets, equipment networks, and international investor participation.
Copper projects rely on state-backed development
Copper has become a priority commodity for Russia’s future mining expansion, with major developments requiring substantial infrastructure investment and government involvement. The Baimskaya copper-gold project in Chukotka is among the country’s largest planned mining developments. Russia’s state development bank VEB is investing more than Rbs1.1 trillion, approximately $13.4 billion, into the project.
Once operational, Baimskaya is expected to increase Russia’s copper production by around 25% and gold production by approximately 4%. The project reflects a new financing model for large Russian mining developments, combining mineral production with infrastructure expansion, regional development, export diversification, and strategic supply objectives. Similar priorities apply to the Udokhan copper project in eastern Russia and planned lithium and rare earth developments, where projects are increasingly assessed on their contribution to domestic supply security and industrial policy.
Critical minerals become strategic industrial projects
Russia is seeking to develop resources including lithium, rare earths, nickel, cobalt, and graphite as part of the global energy-transition minerals supply chain.
The Kolmozerskoye lithium project, held by Polar Lithium, a joint venture involving Nornickel and interests connected to Rosatom, is planned to produce 45,000 tonnes per year of lithium carbonate and lithium hydroxide. Full production ramp-up is targeted for 2030.
Rare earth development is also progressing. India’s state-backed miner IREL has held discussions with Rosneft regarding samples from the Tomtor rare earth deposit in Siberia, one of the world’s largest undeveloped rare earth deposits. These projects face challenges linked to processing technology, market volatility, financing access, and China’s dominant position in rare earth refining and magnet production.
Nornickel balances strategic assets and market pressures
Nornickel remains one of Russia’s most important diversified mining companies, producing nickel, copper, palladium, platinum, and other by-products from a globally significant mining region.
The company reported 2025 revenue of $13.8 billion and EBITDA of $5.7 billion. The company has faced indirect effects from sanctions, including payment disruptions and reduced access to Western equipment, according to Reuters reporting.
Nornickel also faces commodity-specific challenges. Nickel markets are under pressure from increased Indonesian supply, while palladium demand faces long-term uncertainty linked to declining internal-combustion vehicle production, where the metal is used in catalytic converters.
Fertilisers remain a major export industry
Beyond gold, fertilisers remain among Russia’s most resilient mining-related export sectors. Producers including PhosAgro, Uralkali, EuroChem, Acron, and Uralchem have redirected sales toward Asia, Latin America, and other non-Western markets.
Russian fertiliser companies are targeting an increase in global market share from 20% to 25% by 2030 despite European Union tariffs and restrictions. Industry representatives have forecast Russian fertiliser production of 65 million tonnes in 2025, with BRICS countries accounting for nearly half of global mineral fertiliser consumption.
Coal, steel, and diamonds face weaker conditions
Coal has become one of the most pressured areas of the Russian mining sector. The Russian government introduced support measures in 2025, including tax deferrals and possible debt restructuring, after producers faced sanctions, reduced export opportunities, higher transport costs, and weaker global demand.
Reuters reported that Russian coal production increased 1.3% to 438 million tonnes, while exports declined nearly 8% to 213 million tonnes. The industry’s challenge is increasingly logistical. Redirecting coal exports from European markets toward Asia has increased the importance of rail capacity, freight costs, and port availability.
Steel producers have also faced weaker conditions. Severstal reported a 79% decline in 2025 net profit and said Russian steel consumption fell by approximately 14%. Pressure continued into 2026, with first-quarter net profit nearly eliminated as domestic demand weakened further amid high interest rates and reduced civilian investment.
The diamond sector is facing sanctions pressure and changing consumer markets. Alrosa remains a major producer, but the industry has been affected by weaker natural diamond demand and competition from laboratory-grown stones. From January 1, 2026, importers of polished diamonds into the European Union are required to provide additional origin verification documentation to prevent Russian diamonds entering through third countries.
Mining finance shifts to domestic debt markets
The transformation of Russian mining is most visible in capital markets. Before 2022, mining companies relied on London listings, dollar bonds, syndicated loans, and Western banking relationships. Those financing channels have largely disappeared. The Moscow Exchange recorded only three IPOs and three secondary offerings in 2025, all from non-resource companies.
Corporate debt markets remained active, with 288 issuers completing 1,224 bond issues and raising Rbs11.5 trillion in 2025. During the first quarter of 2026, 133 corporate issuers raised Rbs2.8 trillion through 317 bond issues.
Domestic bond markets have become the primary public financing mechanism, favouring companies with strong cash flow, established operations, and access to local lenders.
The Bank of Russia key interest rate was 14.5% on June 18, 2026, following an April rate cut. High financing costs create additional challenges for capital-intensive mining developments and increase the advantage of large producers and state-supported projects.
Yuan financing expands as Western markets close
Russian companies have increasingly used Chinese currency instruments as access to dollar and euro markets has narrowed. Nornickel raised financing through dollar- and yuan-denominated instruments in 2025, while PhosAgro issued yuan-denominated exchange bonds on the Russian market.
Yuan financing provides an alternative source of capital for exporters connected to Asian markets, although it does not replace the depth of Western financial markets.
The current financing structure combines rouble debt for domestic investors, state banks for strategic developments, yuan-linked funding for Asian trade relationships, and retained earnings from profitable producers.
Sanctions reshape international investment access
For international investors, Russian mining exposure has become increasingly restricted by sanctions, market infrastructure limitations, and compliance requirements. US sanctions prohibit US persons from making new investments in Russia, including in the metals and mining sector. Restrictions also apply to certain Russian-origin products, including gold and non-industrial diamonds.
In June 2024, the Moscow Exchange, the National Settlement Depository, and the National Clearing Center were designated by the US Office of Foreign Assets Control, creating additional settlement and custody barriers.
The United States and United Kingdom have also restricted imports of Russian-origin aluminium, copper, and nickel and limited their use on global exchanges and in over-the-counter derivatives markets. Russia retains significant mineral resources, but the pathway from deposit development to investor returns has changed. The strongest opportunities are concentrated among companies able to generate internal funding, access Asian markets, secure logistics, and align projects with state strategic priorities.
