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ECON
OMY
OF B
ELAR
US No
. 2, 2
011
70
www.belarus-economy.by IN THE SPOTLIGHT
Mineral Resources of BelarusMineral resources that Belarus possesses serve as the material basis
for the advancement of this nation’s economy
Vladimir TSALKO, Minister of Natural Resources and Environmental Protection
of the Republic of Belarus
Mineral resources, their extraction, processing and marketing remain a hot issue these days. To address it, you need an integrated approach that requires close international collaboration in a variety of fields such as commerce, politics, science and technology. Whether you can satisfy a demand for raw materials depends not only on your having enough resources, but also on how you use them, on your sci-tech sector, whether it is advanced enough, and on the overall nature of your public relations. Technological progress contributes greatly to the efficient use of mineral resources including deep-lying resources and resources that used to be considered economically unrecoverable.
Rational Use
A fine way to attract invest-
ments in the Belarusian economy
in the next 10 years may be ra-
tional use of mineral resources,
efficient production of goods us-
ing these resources and wise mar-
keting of these goods around the
world.
It is really important for the
state to ensure that local resources
are increasingly used as fuels and
raw materials in production and
for export; that they are gradually
squeezing out imported fuels and
resources. Belarus has a strong
potential in terms of mineral re-
sources, which might help this
country reduce its dependence on
imported fuels.
Considering that mineral re-
sources are the material basis of
the Belarusian economy and the
bulwark of its national security,
the main objectives in the develop-
ment of mineral resources are as
follows:
to set up efficient production
facilities in the locations where
the minerals are extracted;
to continue to improve the geo-
logical prospecting work;
to set up a modern efficient
system of state accounting and
forecasting of the development of
In the quarry of Krasnoselsk-stroimaterialy
chalk is extracted by
powerful walking excavators
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
71
www.belarus-economy.byIN THE SPOTLIGHT
Mineral deposits in the Republic of Belarusthe mineral resources base of the
country;
to develop a state strategy on
natural resources.
More than 30 types of miner-
als have been discovered in Bela-
rus. They can be classified into
the following types: technically
and economically recoverable re-
sources (oil, peat, potash and rock
salt, dolomites, sapropels, mould-
ing sands and other construction
materials); contingent resources
(brown coal, oil shale, iron ore,
zeolite-containing silicites, porce-
lain clays, gypsum, rare minerals
and highly mineralized brines);
and prospective resources (phos-
phorites, glauconite, pyrophyllite,
amber, diamonds, materials for
producing mineral fiber, rare fer-
rous and precious metals).
Energy and Fuel
The consumption of oil by the
economy depends on how much oil
is processed at Mozyr Oil Refinery
and Novopolotsk Oil Refinery, and
how much oil is used to make fuel.
Oil deposits lie in the south of Be-
larus in the Pripyat downwarp.
Since 1964 when Belgeologiya (the
state-run company responsible for
geological prospecting for oil and
minerals) discovered the first oil
deposit in Belarus, a total of 75 oil
deposits have been discovered, the
largest of them lying in the north-
ern part of the Pripyat downwarp.
Seventy-two deposits are in Gomel
Oblast and the three remaining
in Mogilev Oblast. Today we are
developing 61 deposits. In terms
of the 2010 level of oil production,
there will be enough oil for the
next 33 years.
There are considerable peat de-
posits in Belarus. The peak in peat
production was in 1975, around 46
million tonnes. About 30 million
tonnes were used for agricultural
purposes (in every district we had
several peat production facilities
operated by the state company,
Selkhozkhimia). Target volumes
of peat production were sent down
to the fuel industry operators as
well. Around six million tonnes
were used for energy production
every year.
In recent years, peat produc-
tion has ranged between two to
three million tonnes per year. The
main purpose is production of en-
ergy by the companies of Beltop-
gaz.
Among the minerals that Bela-
rus imports is coal. It comes from
Russia, Ukraine, Poland and Ka-
zakhstan in the amount between
250,000 to 300,000 tonnes per year.
Belarus possesses low-quality
brown coal deposits lying at a
depth of 20 to 80 meters. The best
studied are the deposits in Zhitko-
vichi and Petrikov Districts, with
their aggregate known reserves of
99.1 million tonnes. Two coal beds
have been prepared for develop-
ment at the Zhitkovichi deposit,
with a total of 69.1 million tonnes,
which we could use to build an
open-pit coal mine with a capac-
ity of two million tonnes per year,
and the Brinev deposit (30 million
tonnes) where we could build pro-
duction facilities with a capacity
of one million tonnes per year to
extract and process brown coal
that utilities operators could use
as fuel.
Belarusian geologists are pros-
pecting the Lelchitsy brown coal
deposit in the south of the country.
From what we already know about
it, we could build a facility there
capable of processing 1.8 million
tonnes of coal per year, which we
could later use as fuel.
Another source of fuel could
be oil shale. We now have two de-
posits: one near Lyuban and the
other near Turov, where, accord-
ing to preliminary estimates, we
have about 327.7 million tonnes of
oil shale.
One of the most efficient and
economically safe sources of en-
ergy is geothermal energy, but
you will not find it in our fuel con-
sumption mix.
Metal Deposits
Considering the increase in
the manufacturing of rolled metal
products and metal cord in Bela-
rus, this country imports scrap
metal. By 2008, the home demand
for it exceeded two million tonnes,
or around $400 million. Therefore
it seems like a good idea to set up
our own metallurgical production
using Okolovskoye (Minsk Oblast)
and Novosyolkovskoye (Grodno
Oblast) deposits.
The Okolovskoye deposit of fer-
ruginous quartzite, with a capac-
ity of around 145.4 million tonnes,
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
72
www.belarus-economy.by IN THE SPOTLIGHT
Mineral Number of
Deposits
Reserves
Unit of Measurement Amount
Potash salt, raw salt/К2О 3 and 2 millions of tonnes
7023.2/
1276.3
Table salt 3 millions of tonnes 21315.2
Oil 74 millions of tonnes 55.4
Coal 2 millions of tonnes 99.1
Oil shale 2 millions of tonnes 327.7
Peat 71 millions of tonnes 160.5
Iron ore 2 millions of tonnes 275.4
Chalk for cement 7 millions of tonnes 643.4
Chalk for lime and
crushed chalk 34 millions of tonnes 366.5
Marl for cement 1 millions of tonnes 366.0
Dolomite 1 millions of tonnes 922.6
Tripoli 1 millions of tonnes 30.0
Cladding stone 1millions of
cubic meters3.3
Building stone 3millions of
cubic meters583.5
Sand and gravel mix 195millions
of cubic meters696.2
Glass sand 2 millions of tonnes 17.1
Moulding sand 2 millions of tonnes 35.2
Building sand 161 millions of cubic meters 548.0
Soils used for
road coating 211 millions of cubic meters 78.1
Clays for cement 13 millions of tonnes 135.4
Mounding clays 1 millions of tonnes 12.3
Brick clays 218 millions of cubic meters 249.3
Agloporite clay 6 millions of cubic meters 25.4
Expanded clay 8 millions of cubic meters 53.9
Refractory clay 6 millions of tonnes 51.8
Sapropel 85 millions of tonnes 74.1
Ground fresh water 278 millions of cubic meters
per day7.1
Ground mineral water 227 millions of cubic meters
per day0.06
Industrial waters 1 cubic meters per day 96
Minerals and Raw Materials in the Republic of Belarus
as of 1 January 2011
has been prospected 700 meters
deep. At this deposit we could set
up facilities to extract and enrich
ore (4 million tonnes per year),
produce magnetite concentrate
(888,900 tonnes per year), iron-rich
pellets (625,000 tonnes per year)
which meet the requirements of
the technology applied at Belaru-
sian Steel Works. The investment
needed is $1.6 billion.
The capacity of the Novosyolk-
ovskoye deposit is around 130 mil-
lion tonnes of titan and magnetite
ores. It is possible to build a min-
ing factory there.
In the west of Gomel Oblast,
we have a deposit of rare earth el-
ements, called Diabazovoye. Our
preliminary study has encour-
aged us to move ahead with a de-
tailed prospecting of this deposit
in order to prepare it for develop-
ment and production of rare met-
als and mineral fiber to be used
as heating and sound insulation
material, and crushed stone. The
issue now is to find a customer for
this project.
Abundance of Salt
In terms of the size of potas-
sium deposits, Belarus comes
third in the world after Canada
and Russia, and potash fertilizers
are a major export of Belarus. The
deposits that have been studied in
detail are Starobinskoye (Minsk
Oblast) and Petrikovskoye (Gomel
Oblast), with their aggregate re-
serves in excess of 6.8 billion
tonnes. We have discovered and
carried out a preliminary study of
the Oktyabrskoye (Gomel Oblast)
deposit (636 million tonnes) and
discovered some promising salt-
bearing areas.
The discovered deposits of
rock salt at the three fields (Star-
obinskoye, Davydovskoye and
Mozyrskoye) are in excess of 21
billion tonnes. The extraction of
rock salt to produce dietary salt
“Extra” is done at the Mozyrskoye
field, 380,000 tonnes per year. We
have started the extraction of rock
salt (dietary, fodder and technical)
at the Starobinskoye deposit using
the mining method. The annual
production of rock salt in Belarus
is more than one million tonnes.
The known deposits of the salt
make it possible for us to satisfy
the nation’s demand for dietary
and technical salt by using Belaru-
sian raw materials and arranging
the export of this type of products
in large quantities.
In addition to the deposits al-
ready discovered, we have identi-
fied some locations in Gomel Ob-
last (Shestovichsky, Skrygalovsky,
Yuzhno-Kopatkevichsky, Komar-
ovsky, Oktyabrsky and Omelko-
vschinsky) with a better mode of
occurrence and the aggregate re-
serves of rock salt in excess of 28
billion tonnes. In other words, Be-
larus possesses nearly unlimited
deposits of rock salt.
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
73
www.belarus-economy.byIN THE SPOTLIGHT
Tatarka, a state-owned peat producer based in Osipovichi District, is one of the biggest in Belarus
Raw Materials for Agriculture and Construction
Belarus has been importing
over 200,000 tonnes of gypsum a
year. Recently a new gypsum de-
posit Brinevskoye has been dis-
covered in Gomel Oblast. The de-
posit is estimated at 182.5 million
tonnes of gypsum and its geologi-
cal setting allows for mining. The
necessary capital investments for
the deposit development are esti-
mated at $69.09 million.
A large dolomite deposit Ruba
with over 900 million tonnes of
currently explored reserves was
discovered in Vitebsk Oblast. This
raw material is used to produce
dolomite powder, crushed dolo-
mite, mineral powders for roofing
felt, asphalt, concrete, and other
materials. The country’s demand
for carbonate fertilizers (dolomite
powder) has been reduced to two
or three million tonnes a year. The
plant’s capacities allow increasing
production of dolomite powder up
to 6.5-7 million tonnes, therefore it
is necessary to find new markets.
It is believed that these deposits
will last for about one hundred
years. If necessary, the dolomite
reserves may be increased with-
out significant additional costs
to the geological exploration. Be-
sides the Ruba deposit, Vitebsk
Oblast has a number of smaller
dolomite deposits with the pro-
jected reserves exceeding 200 mil-
lion tonnes.
Belarusian lakes and peat beds
are also rich in sapropel deposits.
According to the estimates, the
sapropel reserves total 2.6 billion
cubic meters.
Belarus also has a lot of de-
veloped deposits of construction
materials which are used either
directly or after technical process-
ing. These are deposits of car-
bonate rock, such as chalk and
marlstone; clay and loam with dif-
ferent melting temperatures and
other properties; various sands
and gravel-sands; building stone,
etc. They all are used in the pro-
duction of concrete, lime, ceramic
and silicate articles, glass, fac-
ing and roofing materials, light
porous fillers, road metal, and
gravel-sands used in concrete pro-
duction and road construction. A
vast majority of the explored de-
posits of construction materials
are being developed while the rest
are used as reserve base for min-
ing companies. Although there is
a great number of construction
materials deposits, Belarus still
lacks silica sands for glass produc-
tion and clay for concrete produc-
tion. There is not enough sand and
gravel-sand deposits in the south.
The cement industry has
enough resources for a long run.
The total commercial reserves of
cement raw materials exceed 1
billion tonnes. There are three ce-
ment plants.
There are three explored depos-
its of construction stones totaling
583.5 million cubic meters. These
are Mikashevichskoye and Sitnit-
skoye in Brest Oblast and Glush-
kovichskoye in Gomel Oblast.
The reserves of facing materi-
als are represented by the migma-
tite deposit Karier Nadezhdy locat-
ed in Gomel Oblast. The migmatite
reserves total 3.3 cubic meters.
Three deposits of glass and
moulding sands are ready for com-
mercial development. They are the
Lenino deposit (glass and mould-
ing sands), Chetvernya (mould-
ing sands) and Gorodnoye (glass
sands) in Gomel and Brest Oblasts
respectively. Their total reserves
approximate 50 million tonnes.
Over 190 deposits of sand and
gravel materials have been discov-
ered so far in Belarus. Their total
reserves exceed 690 million cubic
meters. More than 100 deposits
of over 12 million cubic meters
of raw materials are being devel-
oped.
Although Belarus produces
quite a lot of construction sand,
gravel-sand and road metal, the
demand for these materials is not
fully met. There are regions where
the gap between the demand and
supply is especially big. Therefore
it is advisable to renew develop-
ment of some deposits which was
suspended for some reasons.
There are more than 200 depos-
its of slow-melting clays (250 mil-
lion cubic meters) which are used
in production of rough ceramics;
eight clay deposits (over 70 million
cubic meters) for agloporite and
keramzit production; six deposits
of hard-melting clays (51.8 million
tonnes) and one deposit of hard-
melting bentonite clay (12.3 mil-
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
74
www.belarus-economy.by IN THE SPOTLIGHT
One of Gomelstroi-
materialy dredge
machines has already cleared the
first thousand tonnes of
sand in the new quarry,
Sozhsky. Gomelstroi-
materialy is one of the leaders of
the Belarusian construction
industry
lion tonnes) for facing tiles, wall
ceramic stones, plumbing ceramic
pipes. Twenty deposits of low-
melting and two deposits of hard-
melting clays are being developed.
About 1 million cubic meters of
low-melting and 110,000 cubic me-
ters of hard-melting clays are be-
ing extracted every year.
The reserves of clay can
fully satisfy the demand of the
construction industry. But the
number of deposits of construc-
tion raw materials varies greatly
from one oblast to another. If
the northern and central parts
of the country have enough raw
materials, many brick-making
plants in the rest of the country
suffer from the shortage of raw
materials and either make low-
quality products or had to close
down. Therefore it is paramount
to boost search for new deposits
of raw materials in order to meet
the long-term demand of brick-
making plants.
It is also advisable to renew de-
velopment of earlier explored de-
posits of brick raw materials.
The country’s demand for con-
struction materials, including ce-
ment, can be fully satisfied by the
development of old deposits as
well as preparation of industrial
development of new mineral de-
posits.
Water Resources
Belarus boasts rich fresh un-
derground water resources with
the known daily reserves totaling
6.4 million cubic meters. Consump-
tion of the fresh underground wa-
ters has been constantly growing.
Minsk, oblast centers and indus-
trial hubs, cities and townships
have enough water to satisfy their
needs for a long time.
One of the priorities of the
geologic services of Belarus is to
launch commercial exploitation
of fresh underground waters in
order to stop using surface waters
for the water supply.
Belarus is rich in mineral wa-
ters which quality and therapeu-
tic properties are similar to those
of Western Europe and the Cauca-
sus. The most popular of them are
chloride, sulfate, sulfate-chloride,
chloride-sulfate, sulphurous, cha-
lybeate and radon mineral waters.
The waters with medicinal prop-
erties are used by numerous spas
and health resorts and are bottled
for sale. Unfortunately this type of
mineral resources is not exported
to generate additional foreign cur-
rency revenues to the budget.
Highly mineralized chloride
brines found within the Pripyat
arch can be used as raw materials
for production of iodine, bromine
and other valuable elements.
Assessing Prospects
Owing to continuous efforts
of researchers and scientists the
prospects of finding new mineral
deposits in Belarus have been
increased in the last few years.
Nonetheless, due to the geological
peculiarities of Belarus and the
fact that mineral resources are
vastly understudied, most of the
relevant research projects are on
different stages of development.
A lot of time and financial invest-
ments is needed to complete the
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
75
www.belarus-economy.byIN THE SPOTLIGHT
Extraction of Minerals in 2006– 2009
MineralUnit
of measurement 2006 2007 2008 2009
Oil thousands of tonnes 1780 1760 1740 1719
Potash salt (raw) thousands of tonnes 28 993 32 032 32 066 15 390
Table salt thousands of tonnes 1064 5000 969 1155
Dolomitethousands
of tonnes3844 3999 4479 4123
Chalk for cementthousands
of tonnes
4611/
916*
4922/
1019*
5470/
893*5309
Chalk for lime and
crushed chalk
thousands
of tonnes339 343 257 202
Marl for cementthousands
of tonnes
1753/
199*
1672/
238*
1900/
252*2166
Clays for cementthousands
of tonnes
1410/
652**
1591/
660**
1606/
642**1397
Clays for brick,
claydite and
agloporite
thousand
cubic meters1312 1797 1646 1375
Refractory claysthousands
of tonnes57 95 91 107
Quartz sandthousands
of tonnes273 400 298 286
Quartz sand for glass
production
thousands
of tonnes688 716 800 444
Building sandthousand cubic
meters3100 3828 5100 5470
Sand and gravel mixthousand cubic
meters8746 10 424 11 300 11 830
Building stonethousand cubic
meters4870 5471 5545 6270
* used in lime production
** used in brick and claydite production
studies and start the commercial
production.
With a view to assessing the
further development of the Bela-
rusian mineral deposits to satisfy
the country’s demand for mineral
resources, the latter are divided
into three main categories accord-
ing to the level of their commer-
cial exploitation and economic
potential.
The first group includes the
raw materials that are present
in adequate quantities, i. e. min-
eral resources which exploitation
meets and will continue meet-
ing the country’s demand in full,
as well as those that can be ex-
ported. They are potassium and
mineral salts, dolomites, natural
construction materials (construc-
tion stone, cement raw materials,
ceramic clays, building sands and
gravel-sands).
The second group includes
scarce mineral resources, i. e.
minerals that are not produced
in adequate quantities. They are,
first of all, oil, natural gas, high-
quality facing stone and silica
sands for the glass-making indus-
try and foundry production.
The third group includes prom-
ising raw materials, i. e. mineral
deposits which are under develop-
ment and are being prepared for
commercial use. These are iron
ore, brown coal and oil shale, gyp-
sum, phosphorites, brines, car-
bonate tripoli, kaolins, bauxites
and bentonitic clays.
This classification allows iden-
tifying the major development
trends of Belarus’ mining indus-
try in the short-term perspective,
planning the commercial develop-
ment of new deposits and finding
the optimal solutions to the chal-
lenges facing the domestic mining
industry today.
It would make economic sense
to increase the production of the
minerals Belarus abounds in.
The demand for these minerals is
growing both on the domestic and
foreign markets.
The production of potassium
salt has increased following the
commissioning of new mining
facilities at the Starobinskoye
deposit and the launching of the
Oktyabrskoye and Petrikovskoye
deposits with the help of foreign
investors.
The available reserves of po-
tassium salt allow satisfying the
long-term domestic demand for
edible and technical salt and sell-
ing large amounts of this product
abroad. The ongoing exploration
and prospecting works at potas-
sium salt deposits are aimed to in-
crease the production of sodium
carbonate.
With a view to meeting the do-
mestic demand for granite mac-
adam and ornamental stone, re-
ducing the import and increasing
the export of these products, the
following projects are to be imple-
mented with the help of foreign
investments:
- construction of a quarry to
produce building stones and a
mining and processing company
with the capacity of 6.8 million
cubic meters of crushed stone
and 2 million cubic meters of
sand per year at the Sitnitskoye
deposit;
- upgrade of the crushed stone
plant Glushkovichi to produce 1
million tonnes of crushed stone
per year.
The expansion of the mineral
resources base of the cement in-
dustry is attributed to the con-
struction of new cement plants in
Gomel Oblast. The Podkamenye
and Shirokoye chalk deposits, Vet-
ka District, have been chosen as
the venue for the construction of
a new cement plant by the AZAR-
AB company, Iran. A similar com-
petition is to be held to select a
contractor to build a cement plant
at the Dobrushskoye deposit, Do-
brush District.
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
76
www.belarus-economy.by IN THE SPOTLIGHT
Belorusneft geologists have
discovered a new oil deposit in the south of the country, in
Khoiniki District
Construction sand and sand-
and-gravel deposits have been pre-
pared for commercial exploration.
They will help satisfy the growing
demand of the domestic construc-
tion industry.
As for mineral resources that
are in short supply in Belarus, we
need to start exploring deposits of
the mineral resources that are not
produced in Belarus or produced
in inadequate quantities. To speed
up the commercial production of
these mineral resources, we need:
- to carry out prospecting to
prepare the deposits for industrial
exploration;
- to develop and introduce new
advanced technologies to extract
and process mineral resources;
- to hold technical and econom-
ic assessment of deposits to make
sure their development makes
economic sense;
- to raise private investments,
including foreign capital, to carry
out field development and explora-
tion.
Belarus has mostly small oil
fields with residue oil reserves
under 1 million tonnes each. Bela-
rusian oil is hard to produce and
needs additional oil stimulation
works.
As active oil fields are depleting
and new ones are hard to develop,
we need to slow down the natural
reduction in oil production. We
will step up our efforts to complete
exploration works to discover new
oil fields, expand survey geogra-
phy and continue the exploration
of under-studied areas.
We have plans to commission
abandoned wells and fields using
the latest well stimulation tech-
nologies (horizontal wells, second
well bores, deep hydraulic fractur-
ing, and reservoir pressure main-
tenance).
Besides the Pripyat oil and gas-
bearing region, we will focus on
another two oil-bearing areas in
the Orsha and Podlaska-Brest ba-
sins. They are understudied and
have a small sedimentary cover
(under 2,000 meters). We have
started the regional exploration of
the area in order to find more oil
fields.
The major supplier of raw ma-
terials for the domestic glass in-
dustry is the Lenino quartz sand
deposit operated by Gomel Mining
and Processing Plant. The remain-
ing in-place reserves of the depos-
it are estimated at about 3 million
tonnes. The reserves will be de-
pleted within two to three years,
provided the production volume
remains the same.
To keep the glass industry up
and going we need to explore new
deposits, first of all, the ones lo-
cated in Stolin District, Brest Ob-
last.
The commercial production of
ornamental stone at the Karier
Nadezhdy deposit has been frozen
since 1996. However, the domestic
demand for ornamental stone re-
mains the same (about 600,000 cu-
bic meters per year). Therefore, we
have plans to resume ornamental
stone production at this deposit.
From Exploration to Utilization
One of the priority tasks we
are facing is to optimize the explo-
ration and consumption of min-
eral resources.
The analysis reveals that the
exploration and evaluation works
are performed in an orderly man-
ner in Belarus, but their results
are sometimes disregarded by
domestic industries. Financial
resources allocated to geological
survey should be channeled into
priority projects; a detailed de-
scription of the deposits should
be made, and the proven deposits
should be transferred to the cus-
tomer for commercial use.
We need to optimize the work
of the government bodies respon-
sible for subsurface management,
record maintenance and control.
This fully pertains to the oblast
executive committees which are
in charge of (just like all the local
executive and regulatory bodies)
the rational use of the existing
mineral resources.
Efficient planning is essential
for expanding the mineral re-
sources base of the country. De-
posits should be commissioned
taking into consideration the
77
www.belarus-economy.byIN THE SPOTLIGHT
Prime Minister of Belarus Mikhail Myasnikovich laid a capsule in the foundation of a complex NPK-fertilizer plant in Soligorsk (29 April 2011)
current and potential demand
for mineral resources and a pos-
sibility to increase their produc-
tion for export and domestic con-
sumption. The planning should
be made on all the levels: from the
Economy Ministry and other min-
istries and government bodies to
the local executive and regulatory
bodies. The efforts should be led
by the Ministry of Natural Re-
sources and Environmental Pro-
tection and the National Academy
of Sciences of Belarus. They will
decide whether the domestic de-
mand for mineral resources can
be satisfied by Belarus’ own re-
sources and whether the develop-
ment of a specific deposit makes
economic sense.
With a view to expanding the
mineral resources base, we need
to carry out early prospecting and
preparation for the commercial
production of new deposits and
provide the adequate financing for
geological exploration. The share
of extra-budgetary funds should
be increased.
Our efforts to encourage min-
istries to finance geological ex-
ploration out of their investment
funds have made little headway.
The ministries are discouraged
by long payback periods and the
absence of 100% guarantees of
getting back their investments
if recoverable deposits are not
found.
To challenge the status quo, we
need to provide mining companies
with more incentives to invest in
geological exploration. We should
also offer legal safeguards to com-
panies financing geological sur-
veys to guarantee the reimburse-
ment of their credit resources.
One of the ways to boost invest-
ments into geological exploration
is to exempt mining companies
from taxes on the profits obtained
from geological exploration and
to transfer these profits to invest-
ment funds.
Economic Mechanism of Resource Management
Today, the economic efficiency
is becoming increasingly impor-
tant for nature management.
Resource management is
based on economic evaluation of
resources. Its purpose is to deter-
mine commercial value and em-
ploy such parameters which will
make commercial production of
mineral resources most efficient
in the long-term perspective. De-
fining the value of mineral depos-
its is crucial for making various
kinds of transactions, attracting
investments and loans, setting
taxes and tariffs, etc., and also for
the growth of resource compa-
nies.
The evaluation is focused on
an array of natural resources,
for which use we have economi-
cally reproducible technology,
which eliminates the possibility of
bringing irreparable losses and ir-
reversible adverse environmental
impacts. The evaluation also takes
account of the natural resources
that are involved in the commer-
cial production and are items of
state and private property. With-
out economic evaluation we will
not be able to implement the most
important bills on the transition
to market economy, create equal
conditions for enterprises irre-
spective of the form of ownership,
take stock of the environmental
damage, to substantiate regula-
tions governing extraction of re-
sources, develop incentive meas-
ures for their protection.
Another purpose of evalua-
tion is to determine the economic
value of mineral reserves so that
the state could regulate relations
in the subsoil management and
ensure the rational use of the
country’s raw materials for the
benefit of present and future gen-
erations.
Evaluation of fields is focused
on the following goals:
- carrying out a comparative
cost analysis of mineral resourc-
es and the economic efficiency of
their use;
- improving the system of
charging for mineral extraction
taking into account factors that
generate rental income;
- calculating commodity price
of prospective mineral resources
and operational stocks of mineral
resources;
- assessing the economic effi-
ciency of development of mineral
deposits;
ECON
OMY
OF B
ELAR
US No
. 2, 2
011
78
www.belarus-economy.by IN THE SPOTLIGHT
Extraction of raw materials
in a quarry of Belarusian
Cement Factory
- improving the economic and
legal mechanism for regulating
profits obtained from the use of
mineral resources;
- generating budget revenues
from the use of mineral resources,
which can be invested into explo-
ration, cost-effective development
and conduct of environmental ac-
tivities;
- optimizing exploration works,
determining their economic effi-
ciency and generating profits for
the geology industry;
- making feasibility studies of
the mineral resources reserves
as an element of national wealth,
identifying the main areas of their
rational use in the national econ-
omy based on high technology in
order to maximize revenues;
- developing institutional mea-
sures and creating economic
conditions enabling the users of
mineral resources to apply new
technological solutions in survey,
exploration and development of
mineral deposits;
- cultivating the management
system of mineral resources, cre-
ating the information database of
the possibilities of their use.
Science-based solutions to
these problems will create pre-
conditions for the development of
a long-term strategy for the use
of mineral resources and for con-
centration of financial resources
on the mineral deposits which are
the most promising and economi-
cally attractive for commercial de-
velopment.
Evaluation seeks to determine
key indicators, including:
- geological and recoverable re-
serves of mineral reserves;
- timeframe and costs of con-
struction of a mining (and process-
ing) organization;
- profitability of a field devel-
opment.
Evaluation of fields may be held:
at the state level to regulate re-
lations in the area of mineral re-
sources management on the basis
of the potential economic value of
mineral reserves;
at the commercial level to de-
termine the investment attrac-
tiveness of the sites prepared for
surveying, exploration and devel-
opment.
Evaluation of deposits should
make part of the state registry
of mineral resources and should
spell out the economic value of
mineral reserves.
From the foregoing it becomes
apparent that evaluation of min-
eral resources is one of the most
pressing problems today. Its so-
lution will help ensure rational,
economically sound development
of the existing mineral fields and
significantly improve the mineral
taxation system. The Republic of
Belarus may consider abolishing
the fixed tax rate for mineral ex-
79
www.belarus-economy.byIN THE SPOTLIGHT
Belarus’ biggest deposit of sapropel lies in Lake Dikoye, Dyatlovo District
traction and introducing differen-
tiated royalty rates depending on
the type of a mineral, volume and
value of its output, and profitabil-
ity of mining companies.
The system of payments in the
form of royalty should apply to all
mining enterprises of the country,
regardless of the form of owner-
ship. At the same time introduc-
ing decreasing coefficients for the
fields located far from industrial
centers or in underserved areas
will stimulate their development.
By having the information
about the real value of deposits
at our disposal we can implement
a system of lump sum payments
(bonuses) to attract private invest-
ment to the surveying and devel-
opment of deposits on a competi-
tive basis. Proper evaluation of
deposits will also allow increas-
ing the use of non-tax methods
of withdrawal of some part of
profits from the subsoil users who
operate deposits on the terms of
concessions or on the terms of a
production-sharing agreement be-
tween the company and the state.
The state as owner of the sub-
soil can derive even greater eco-
nomic benefits by introducing a
system of rent payments, the size
of which would depend on the
value of a deposit. In this case, not
only subsoil resources but also the
cost of minerals can be assigned
to the balance sheet of a subsoil
user. Thus, the user would be eco-
nomically motivated to maximize
the extraction of useful compo-
nents at all stages of industrial
development of a field - from pro-
duction to refining. This will also
encourage him to finance not only
geological surveying and develop-
ment of a field, but also the use of
advanced technologies.
Involving technogenic depos-
its into commercial production
can be seen as a promising area of
expanding the mineral resources
base. For example, Belaruskali
and Gomel Chemical Plant alone
have accumulated tens of millions
of tonnes of solid mining and
chemical production waste con-
taining a number of valuable com-
ponents (rare and precious met-
als, phosphogypsum, low-grade
potash, rock salt, etc.). For more
active use of mining and industri-
al wastes, we need to take stock of
them, to draw up feasibility stud-
ies of their use, improve the legal
and methodological framework to
ensure that they are treated as a
source of minerals.
One of the major objectives the
head of state put forward at the
Fourth All-Belarus People’s Con-
gress was the implementation of
major national projects based on
the country’s natural and intel-
lectual resources, development
of mineral fields. This will help
boost gross domestic product due
to increased production of miner-
als, satisfy the needs of enterpris-
es with local mineral resources,
ramp up the export potential and
reduce the dependence of the Be-
larusian economy on imports of
mineral raw materials.
The government approved the
mineral deposits development
program of the Republic of Be-
larus for 2011-2015 years, and for
the period until 2020 taking into
account the urgency of the issues
of reproduction and development
of mineral resources, the need
to address long-term tasks in the
field of geological surveying of
the country and to develop a com-
prehensive approach to the use of
mineral resources.
Implementing the program ac-
tivities will allow stepping up the
production of potassium salts by
15% by 2015, salt by 82%, cement
raw materials by 32%, dolomite
by 11%, building stone for the pro-
duction of crushed stone by 54%,
glass raw materials by 41%, natu-
ral building materials by 58% and
peat by 115%.
We will launch the construc-
tion of nine new mines; some of
them will be commissioned by
2015.
According to expert estimates,
the investments in the develop-
ment of the abovementioned fields
will pay back in 5 to 8 years.
* * *
Minerals are one of Belarus’
main resources. Today our pri-
mary task is to ensure rational
management of this wealth for
the benefit of the Belarusian peo-
ple.
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