Russia’s mining sector continues to rank among the world’s largest resource industries, but sanctions, elevated domestic borrowing costs, and the withdrawal of Western capital have reshaped the financing, development, and marketing of mining projects. Gold, copper, fertilisers, lithium, and rare earths are increasingly linked to state-backed investment and Asian demand, while coal, steel, and diamonds face mounting operational and market pressures.
The country remains home to significant mineral deposits and export-oriented producers, but project development and capital allocation are increasingly influenced by domestic financial markets, government support mechanisms, and strategic industrial priorities.
Gold producers benefit from strong bullion markets
Polyus, Russia’s largest gold miner, reported 2025 revenue of $8.7 billion, EBITDA of $6.35 billion, and pre-tax profit of $6.3 billion. The company recorded these results despite lower production and sales volumes, supported by higher gold prices. For 2026, Polyus has guided production of 2.5 million to 2.6 million ounces.
The company’s flagship growth asset is the Sukhoi Log gold project in eastern Siberia. Polyus reports that the deposit contains 43.5 million ounces of reserves and 81 million ounces of resources. Reuters has reported that development of the project is expected to require approximately $6 billion, achieve full operations in 2029, and support Polyus in increasing annual production toward 6 million ounces by 2030.
Copper developments receive strategic backing
Copper has emerged as a key focus for Russia’s future mining expansion, with large-scale projects receiving substantial state support. The most significant development is the Baimskaya copper-gold project in Chukotka. Russia’s state development bank VEB is investing more than Rbs1.1 trillion, equivalent to approximately $13.4 billion, into the project.
Once commissioned, Baimskaya is expected to increase Russia’s copper production by approximately 25% and national gold output by about 4%. The project is being developed in a remote region and represents one of the largest mining investments currently underway in the country. Additional growth initiatives include the Udokan copper project in eastern Russia, alongside planned lithium and rare earth developments aimed at strengthening domestic supply chains and processing capacity.
Lithium and rare earth projects advance
Russia continues to pursue development of critical minerals projects covering lithium, rare earths, nickel, cobalt, and graphite. The Kolmozerskoye lithium project, owned by Polar Lithium, a joint venture involving Nornickel and interests linked to Rosatom, is planned to produce 45,000 tonnes per year of lithium carbonate and lithium hydroxide. Full ramp-up is targeted by 2030.
Rare earth development efforts are also progressing. India’s state-backed mining company IREL has held discussions with Rosneft regarding access to samples from the Tomtor rare earth deposit in Siberia. Tomtor is regarded as one of the world’s largest undeveloped rare earth deposits. These initiatives are occurring against a backdrop of volatile lithium markets, technical challenges associated with rare earth processing, and restrictions affecting access to technology and financing.
Nornickel maintains major metals position
Nornickel remains one of Russia’s largest diversified mining companies, producing nickel, copper, palladium, platinum, and associated by-products from its mining operations. The company reported 2025 revenue of $13.8 billion and EBITDA of $5.7 billion.
Reuters reported that while Nornickel is not directly sanctioned, the company has experienced indirect impacts including payment disruptions and reduced access to Western equipment suppliers. The company also faces changing market conditions across several key commodities, including increased nickel supply from Indonesia and evolving demand patterns for palladium.
Fertiliser producers expand non-Western market presence
Fertiliser producers remain among Russia’s strongest export-oriented materials businesses. Companies including PhosAgro, Uralkali, EuroChem, Acron, and Uralchem have redirected significant sales volumes toward Asia, Latin America, and other non-Western markets.
Russian fertiliser producers aim to increase their share of the global fertiliser market from 20% to 25% by 2030. Industry forecasts indicate Russian fertiliser production will reach 65 million tonnes in 2025. Producers also note that BRICS countries account for nearly half of global mineral fertiliser consumption.
Coal, steel and diamonds encounter market pressures
Several traditional resource sectors continue to face significant challenges. Russia’s coal industry received government support measures during 2025, including tax deferrals and potential debt restructuring initiatives. Reuters reported that coal production increased 1.3% to 438 million tonnes, while exports declined nearly 8% to 213 million tonnes.
The sector has been affected by sanctions, weaker export demand, higher transportation costs, and logistical constraints associated with redirecting shipments toward Asian markets. In steel, Severstal reported a 79% decline in net profit during 2025 and stated that Russian steel consumption fell by approximately 14%. The company also reported that first-quarter 2026 net profit was almost eliminated as domestic demand continued to weaken.
The diamond sector faces similar headwinds. Alrosa remains a major producer, but sanctions, reduced natural diamond demand, and competition from laboratory-grown stones continue to affect market conditions.
From January 1, 2026, importers of polished diamonds into the European Union must provide additional origin verification documentation to demonstrate that Russian diamonds have not entered the bloc through third countries.
Domestic debt markets replace traditional funding channels
The structure of mining finance in Russia has changed significantly. Prior to 2022, mining companies could access international equity markets, syndicated loans, dollar bonds, and Western banking services. Those funding avenues have largely disappeared.
The Moscow Exchange recorded only three IPOs and three SPOs during 2025, all originating from non-resource sectors. Debt markets remained active. During 2025, 288 corporate issuers placed 1,224 bond issues, raising Rbs11.5 trillion. In the first quarter of 2026, 133 corporate issuers raised Rbs2.8 trillion through 317 bond offerings. The Bank of Russia’s key interest rate stood at 14.5% on June 18, 2026, despite an earlier rate reduction in April.
High borrowing costs have increased financing pressure on capital-intensive mining projects, favouring large producers with strong cash flow and government-backed developments.
Yuan financing gains importance
Russian mining and industrial companies have increasingly turned to Chinese currency funding as access to dollar and euro capital markets remains restricted. Nornickel raised financing through both dollar- and yuan-denominated instruments during 2025, while PhosAgro issued yuan-denominated exchange bonds in the Russian market.
The growing use of yuan financing reflects closer trade and financial links with Asian markets and provides an alternative funding source for exporters with Chinese customers or procurement requirements.
Sanctions reshape investment access
US sanctions prohibit new investment by US persons in Russia, including investments involving the metals and mining sector. The Office of Foreign Assets Control (OFAC) also notes restrictions on imports of certain Russian-origin products, including gold and non-industrial diamonds.
In June 2024, OFAC designated the Moscow Exchange, the National Settlement Depository, and the National Clearing Center, creating additional settlement and custody barriers for US-linked investors.
The United States and United Kingdom have also prohibited imports of Russian-origin aluminium, copper, and nickel and imposed restrictions on the use of those metals within global exchange and over-the-counter derivatives markets.
These measures have altered the investment landscape for Russian mining companies, increasing reliance on domestic funding sources, state-backed financing, retained earnings, and Asian-linked capital channels while reducing access to Western financial markets.
