Russia Energy, Mines and Industry

In an energy giant like Russia, the symptoms of an energy crisis – such as strikes by miners, the slowdown in investments in refineries and pipelines and the obsolescence of nuclear power plants – constitute a central element of the overall economic crisis.

Coal production was largely state subsidized in the USSR, and remains largely in Russia. The decline in exports in progress only corresponds to a modest decrease in production: a rationalization of the sector would in fact entail the closure of several mines, with a consequent employment crisis. Instead, oil extraction has been allowed to decrease freely, while new pipelines are being designed to dispose of the growing oil production of Kazakhstan and Azerbaijan in the West, from the Russian port of Novorossijsk (396 million tons in 1992, 3rd place in the world ranking). The situation of natural gas is more complex (640 billion m 3in 1992, 1st place in the world ranking): the state-owned company Gazprom, in the process of privatization, has ambitious plans for the exploitation of vast gas fields in Siberia, including in the Polar Circle and beyond, up to the Yamal peninsula between the estuary of the Ob and the Kara Sea; the technical-financial cooperation of German companies aims at exporting gas to European countries, which however has decreased somewhat in recent years, creating problems for existing plants. Obsolescence and poor reliability characterize nuclear energy production plants (see below). For both oil and gas the extent of Russian production did not suffer too much from the detachment of the other former Soviet republics, which were relatively modest producers.

As for metallic ores, Russia remains a good producer of iron even after the loss of the large Ukrainian deposits of Krivoj Rog and the Kerch peninsula in Crimea, which provided roughly half of Soviet production. Russia is left with the “Kursk magnetic anomaly” in the Central Rialto, where the mineral has a high metal content, the exploitation is of more recent origin and the proven reserves are impressive. Then there are the developing fields of the Kola peninsula and Karelia, the traditional ones of the Urals (moreover in the process of being depleted) and many scattered around Siberia.

Chances for several non-ferrous metals reduced. The bulk of the copper reserves went with Kazakhstan, Uzbekistan and the Transcaucasian republics; the relatively minor deposits of the Urals, the Kola peninsula and the Norilsk region remain with Russia Lead and zinc are also found mainly in Kazakhstan, but the Uralic, Siberian and North Ossetian deposits remain with the Russians. Finally, precious metals: also for gold and silver Russia must abandon the deposits of lucky Kazakhstan and those of Uzbekistan, but keep those of the Urals and Siberia.

Russian industry today is confronted with two chronic problems inherited from the Soviet age, the technological and organizational backwardness on the one hand and the insufficient development of light industries (producers of consumer goods) on the other; but there is also a third problem, new even if connected in a certain sense with the second: the reconversion of war production. The reduction in military spending, consequent to the political-international downsizing of the country, linked to the drastic easing of the tension with the West, inevitable to mitigate the economic crisis, urged by the suppliers of Western aid, has obvious repercussions on a wide range of industries, mainly heavy but also technological, cutting-edge, qualitatively among the best in the country.military-industrial and technically improbable initiatives (such as that of reconverting the production lines of a tank factory for the construction of tractors), some solutions seem set for success, such as for example. the switch to the production of civilian aircraft in the Omsk Air Force Complex in Western Siberia. On the other hand, the manufacture of armaments is one of the few Russian industries competitive on international markets, particularly in the Third World, and therefore the resistance to its downsizing is understandable.

Steel production (67 million tons in 1992, 4th place in the world ranking), traditional Soviet pride in the time of Stalin and beyond, has practically halved in recent years, due to both a marked decline in production due to overlapping of the Russian national crisis and the international steel crisis, and even more so of the loss of Ukrainian production, about one third of the Soviet total.

Non-ferrous metallurgy also saw their production decrease, but not to the extent that could be assumed considering the prevailing extra-Russian location of the related fields. In fact, apart from the factories for the primary processing of minerals located near the mines, several polymetallic kombinaty had been located on the market or on the energy, and therefore frequently in Russia. Moreover, some Russian-produced metals such as lead and aluminum have seen their exports to the West increase in recent years, in a climate of international trade opening and given the competitiveness of their production costs.

In the mechanical sector, the production of motor vehicles, despite having suffered from the steel crisis, decreased slightly, having been concentrated in Russia from the beginning for 85 ÷ 90% of production capacity (1594 thousand units in 1992 ; 8th place).

In the wide range of chemical industries the situation is very different. Generally most of the plants were localized and therefore remained in Russia: for example, as regards basic chemistry, the production of sulfuric acid in St. Petersburg and central European Russia, that of soda on the Volga (Samara) and near Baikal (Irkutsk). Fertilizer factories and hydrocarbon refineries are more dispersed, which therefore remained, in part, supplied to the countries of Central Asia and Transcaucasia.

Textile productions derived from cotton (702,000 t of yarns in 1992, 6th place) fell sharply, as Ukrainian and especially Uzbek production ceased, but they certainly did not go to zero as was the case for the agricultural crop of the material. first, since for some time the cotton industries were located much more in the most populated regions of the European region than in the cotton-growing areas of Central Asia.

Light industries, from clothing to footwear, from furniture to the food sector, are on the whole holding up well in the transformation of the Russian economy. Many branches of these were historically located in large cities and in the most populous areas of the European Union, but of course there was no lack of manufacturing traditions in Ukraine, Belarus, the Baltic countries and also in Transcaucasia, for which a part of the productive apparatus has entered part of the industrial endowment of these new countries.

Finally, cement production (61 million tonnes in 1992, 4th place) was greatly affected by the general crisis. The halving of Russian production, compared to the Soviet one five years ago, is due in roughly equal parts to a genuine contraction in production and the break-up of the more industrialized former Soviet republic, Ukraine.

Russia Energy