Moscow should consider limiting exports of uranium, titanium, and nickel, Russian President Vladimir Putin said on Wednesday, as retaliation for Western sanctions.
His comments to government ministers triggered a rise in both nickel prices and shares in uranium miners. Putin also noted that such restrictions could be imposed on other commodities, such as natural gas, diamonds, and gold.
Many Western countries have drastically cut purchases of Russian oil and gas since the start of the war in Ukraine, but Russia nevertheless remains a major contributor of metals to world markets. A cut or halt to these exports, analysts said, could cause disruption.
However, he stressed that the measures do not need to be taken “tomorrow”, and should not hurt Russia itself.
“Russia is the leader in reserves of a number of strategic raw materials: for natural gas, this is almost 22% of world reserves, for gold — almost 23%, for diamonds — almost 55%,” Putin said.
“Please take a look at some of the types of goods that we supply to the world market . . . Maybe we should think about certain restrictions — uranium, titanium, nickel.”
The price of nickel on the London Metal Exchange (LME) jumped 2.6% to US$16,145 ($24,180) per tonne after Putin’s remarks. Nickel is used in batteries and alloys for applications such as armour plating and turbine blades.
Russia is home to Nornickel (MCX:GMKN) — the world’s biggest producer of refined nickel — and data shows that more than 20% of the metal stored in LME-registered warehouses is of Russian origin.
On the uranium front, shares in Canadian miners NexGen Energy (TSX:NXE), Cameco (TSX:CCO), and Denison Mines (TSX:DML) were up 4.63%, 5.73%, and 5.94%, respectively.
Russia is currently the world’s fourth largest uranium producer with roughly 44% of global uranium enrichment capacity. Last year, the US and China topped the list of Russian uranium importers, followed by South Korea, France, Kazakhstan, and Germany.
Of the enriched uranium supplied to commercial reactors in the US in 2023, 27% came from Russia.
US President Joe Biden signed a law in May this year banning enriched uranium imports from Russia — a trade worth some US$1 billion each year. However, it included waivers that would allow the US Department of Energy to maintain normal levels of Russian uranium imports through to 2027.
“It will be really hard to replace, especially in the short term, the next two to three years,” Citi analyst Arkady Gevorkyan told Reuters.
“Western enrichers are only making plans to build additional enrichment capacity, which would require at least three years to be completed. We anticipate that utilities in the US might be able to partially replace it by importing low enriched uranium from China.”
In addition to its nickel and uranium operations, Russia is the world’s third largest supplier of titanium sponge — a key metal in aerospace, marine, and auto applications. However, the country has low titanium reserves of its own.
Russia’s biggest titanium sponge producer, VSMPO-Avisma, is part owned by sanctioned defence giant Rostec and supplied titanium to Boeing and Airbus prior to the war in Ukraine.
Canada has put VSMPO-Avisma under sanctions, but granted Airbus a waiver to allow the use of Russian titanium in manufacturing. Boeing, however, stopped purchasing Russian titanium less than two weeks after Moscow’s invasion of Ukraine.
According to Russian customs data, the US is still buying Russian titanium, although the biggest purchasers are France, China, and Germany.
Despite the Western sanctions on Russia — more numerous than the individual sanctions imposed on Iran, Cuba, and North Korea combined — Moscow’s economy has remained surprisingly resilient.
Following a relatively mild contraction of 1.2% in 2022, the Russian economy surpassed expectations in 2023 by growing 3.5%.
Write to Oliver Gray at Mining.com.au
Images: Alexander Nemenov/AFP
