in the spotlight mineral resources of...

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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

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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,

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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.

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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-

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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

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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.

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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


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


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


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.

in the spotlight mineral resources of...

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