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Yves here. We had flagged early on that Russia has significant market share in many key commodities and supplies, such as neon, and that Russia could restrict supplies to obtain leverage. In keeping, there was some (depending on the writer) worried or angry commentary on the fact that the US is reliant on Russian uranium at the start of the Special Military Operation. This article recaps a Bloomberg report on some remarks by Putin, which indicate he’s asked his bureaucrats to study the question and see if bans or restrictions on Western buys would be a net plus for Russia. From Bloomberg:
Russian President Vladimir Putin asked the government to consider if it makes sense to limit exports of some commodities like nickel, titanium and uranium in retaliation for western sanctions.
“Russia is the leader in strategic raw materials reserves like uranium, titanium, nickel,” Putin said during the meeting with the government, shown on TV. Since western sanctions limit exports of some Russian commodities like diamonds, “maybe we should also think about restrictions,” he said. Such limits should not harm Russia, he said….
While the London Metal Exchange in April banned delivery of new Russian nickel and aluminum following sanctions imposed by the US and UK, Russia sells most of its output to end users. The US this year also banned imports of Russian uranium and newly produced nickel, copper and aluminum.
“I am not saying that this needs to be done tomorrow, but we could think about certain restrictions on supplies to the foreign market not only of the goods I mentioned, but also of some others,” Putin said.
The US passed legislation that implemented a ban that became effective on August 11, 2024, making the Putin musing look like trying to close the barn door after the horse is in the next county. (As an aside, note the hyperbolic spin in the headline, with Putin signaling that he’s considering the idea and the move depicted as emotional, “revenge,” as opposed to retaliation). But the law has a loophole through which you can drive a truck. From the Department of Energy:
Recognizing that in the near term, implementing the ban could disrupt the operations of nuclear reactors, the law authorizes the Secretary of Energy, in consultation with the Secretary of State and the Secretary of Commerce, to waive the prohibition and permit the import of Russian uranium if an applicant can show that it has no alternative viable source of uranium or that such imports are in the national interest. Any waiver by the Secretary of Energy is subject to annual aggregate limits and will terminate on or before January 1, 2028.
An article at Heritage explained that the real issue is enrichment capacity, and that weaning the US off Russian supplies depends on private investors stepping up and funding the increase of capacity. From Heritage:
The U.S. gets about 19% of its electricity from 93 commercial nuclear power reactors, which are powered by uranium….
Although uranium is an abundant mineral worldwide, the ability to enrich it for use in nuclear power plants is far more limited. Russia controls around 46% of global enrichment capacity, while the U.S. controls only 9.5%.
But America is the largest consumer of fuel-grade uranium, known as low-enriched uranium, or LEU. That means the United States can produce only around 20% of its LEU requirements domestically. The remaining requirements come from enrichment facilities in the United Kingdom, Germany and the Netherlands. Around 25% comes from Russia….
Promptly after the invasion, Mr. Biden stopped oil imports from Russia. Now, Washington has acted to ban uranium imports. The legislation has three key parts. It bans the import of LEU from Russia or any Russian entity, prevents black market imports by banning LEU that “is determined to have been exchanged with, swapped for, or otherwise obtained” to circumvent the ban, and lasts until 2040.
A long-term ban is critical because expanding enrichment is time-consuming and expensive. Investors won’t expand capacity to make up for Russian supply if the ban may be terminated or waived, making low-cost Russian LEU available again to U.S. buyers.
While growing demand for non-Russian uranium fuel had already prompted America’s sole domestically located commercial enricher to expand capacity, a long-term ban on Russian imports is necessary to provide the market certainty required to justify investment in a broader expansion in the sector.
Heritage then calls out two problems with the bill. One is the waiver we flagged, which it contends will undermine certainty about domestic demand. The second is that the authorities need to “get out of the way” and be as permissive as possible as far as approvals for enrichment and uranium mining are concerned.
Even though nuclear power is more important to France’s energy mix than for the US (France exports electricity), it makes much less use of Russian uranium. EDF uses about 8,000 tons of uranium a year, and from what I can tell, only 153 tons comes from Russia. A chart in a 2023 article in Le Monde on France’s uranium sources in Africa doesn’t include Russia as a material source:
Having said that, for reasons of space, your humble blogger will not attempt to profile what countries might be squeezed if Russia restricts exports to Collective West members for some or all of the other commodities where Russia is a major supplier. If Russia does move ahead, one can expect to see analyses using more current data than what we published in 2022.
By Alex Kimani, a veteran finance writer, investor, engineer and researcher for Safehaven.com. Originally published at OilPrice
Russian President Vladimir Putin has asked Moscow to consider limiting exports of some commodities such as uranium, nickel, and titanium in retaliation for Western sanctions, Bloomberg reported on Wednesday.
“Russia is the leader in strategic raw materials reserves like uranium, titanium, nickel,” Putin said during a televised meeting with the government. Since Western sanctions limit exports of some Russian commodities like diamonds, “maybe we should also think about restrictions,” he said, adding that such limits should not harm Russia
The U.S. and its Western allies have imposed numerous sanctions on Russia’s economy as punishment for its war in Ukraine. However, many vital commodities– including nickel, palladium, and uranium– are not under any restrictions and continue to flow to Western nations.
Back in June, the EU approved sanctions on Russian gas, the first time it has done so. According to the Belgian EU presidency, the EU will hit Russia with unprecedented sanctions against its lucrative gas sector–a move that could potentially drain hundreds of millions from Moscow’s war chest.
However, the proposed penalties won’t hit the majority of Russia’s liquid natural gas (LNG) exports to the EU; instead, the sanctions would prevent EU countries from re-exporting Russian LNG after receiving it and also ban EU involvement in upcoming LNG projects in Russia. The sanctions will also prohibit the use of EU ports, finance and services to re-export Russian LNG, essentially meaning that Russia would have to overhaul its LNG export model. Currently, Russia supplies LNG to Asia through Europe, with Belgium, Spain and France being major hubs.
“If they can’t transship in Europe, they might have to take their ice-class tankers on longer journeys,” Laura Page, a gas expert at the Kpler data analytics firm, has told Politico, adding that Russia “may not be able to get out as many loadings from Yamal because their vessels can’t get back as quickly.”
Norway and the U.S. have replaced Russia as Europe’s biggest gas supplier: Last year, Norway supplied 87.8 bcm (billion cubic meters) of gas to Europe, good for 30.3% of total imports while the U.S. supplied 56.2 bcm, accounting for 19.4% of total.
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Russia is currently the EU’s second biggest supplier of gas, replacing US.
I read that it is well underway with having its own fleet of LNG tankers to supply RoW and bypassing the old European port routes.
Longer term there should be the Far East/China pipeline plus the Mongolian pipeline for NG.
Then there is the Azer replacement NG gas as Azer sells twice its ability to produce through Turkey. Then there is the Iran/Indian trade via pipe and ship. Then there is the direct Turkey trade. Etc Etc.
Its like ‘fingers in the dyke’ this sanctions business, one door closes another opens.
I suspect Putin’s talk is just that, ruffle a few feathers.
We also get a lot of critical radioisotopes from Rosatom.
And, should we heavily sanction China, as some propose, we are reliant on them for key components of Pharma.
> we are reliant on them for key components of Pharma.
Perhaps it is this that will break “DIY pharma synthesis” (linked in NC news links last week) into the mainstream (provided the inputs are themselves not unavailable from places like Sigma-Aldrich, they perhaps relying on the China trade too).
Coming off a recent job managing outsourced purchasing for biotech startups (it’s own whole thing) I can confirm significant interference with procurement from China could absolutely cripple domestic pharma R&D. This whole sector is already entirely reliant on venture capital anyway and is therefore quite precarious under the best of circumstances as it is.
Much of our domestic pharma R&D is done by startups, created with the intent of being purchased by or otherwise incorporated into “big pharma” as soon as their product is proved and salable. Until then though, these start ups are extremely reliant on international partners for a variety of services, most of whom are in China.
A majority of chemical inputs are imported from China, significantly eclipsing Germany and the rest of the EU, though the EU, and Germany specifically, still compete more evenly in terms of lab equipment.
Aside from inputs though, there are other huge issues in both research and synthesis… Real estate in silicon valley too expensive to house enough rodents for your study? Work with a lab (clinical research partner) in China. Too expensive to domestically synthesize small runs of a compound while it’s being researched or in trials? China will beat the price.
India is another major supplier of inputs, much less so of research and manufacturing services, but obviously as the world becomes more multipolar and the US continues to attempt punishment and ostracization that could readily dry up as well.
Weird, seems like the executive suites can’t actually do anything by themselves, for sure hard to see that coming. Almost makes one wish we’d retained domestic capacity for doing other stuff… Huh, anyway, next quarter though, right?
The posturing of dominance (which seems to imply self reliance?) is transparent nonsense, but I certainly don’t expect that to stop any of them from shooting themselves, and all of us, in the foot… or more realistically collective faces.
The DIY meds agenda seems more pertinent than ever every day.
It should be noted that two major sources of Western radioisotopes, Chalk River in Canada, and Petten in the Netherlands, have had issues in the past few years with aging equipment. (One reason why Iran is doing nuclear research, BTW.)
Deindustrialisation has reduced demand for natural gas. BASF which used 15% Nordstream supply imported through its Wintershall sub. has now sold Wintershall and is shutting down whole divisions in Ludwigshafen.
Simply watching store closures or footfall without purchases shows just how tight the squeeze is on consumers as energy costs and overdraft credit costs impact lifestyles.
The introduction of new Climate Taxes on trucking in Germany in 2o24 added to the joy. US will be losing what it gains on LNG on foregone arms sales. Next month the neophyte Finance Minister in London will no doubt cut defence spending. Germany at current production will be back at 2004 levels of kit by 2124 and is ordering on Payment in 2028 deals for delivery in 2030.
It is all a joke. Hydrocarbons in the ground will be a reserve for the future whereas Europe lacks any reserve for the present. That is peacetime. In 1940 Texas had around 50% world market share in oil supply and British Merchant seamen died conveying it across the Atlantic in convoys as U-Boats engaged as predators…. It must be a relief to US crews to know there is no risk of burning on an LNG barge in the Atlantic of Russia or China feel aggrieved !
Regarding fuel for nuclear power plants, there are further hindrances to Europe and the USA shaking off the chains of dependence on Russia.
An important point is that even if countries manage to do without Russia as a supplier of fissile material, they are utterly dependent on it for re-processing spent fuel.
Talking about France, the country (which has its own facilities for enriching uranium ore) only performs a first re-processing step with spent fuel, extracting plutonium for its atomic arsenal. The resulting depleted uranium is sent to Rosatom, which transforms it into fuel for nuclear reactors — and stores away the highly-depleted uranium and nasty nucleides that cannot be turned into anything useful for the atomic energy industry.
It is my understanding that every European country is in the same situation: want to recycle spent fuel? The address is Rosatom, Seversk, Russian Federation.
Thanks! Very helpful info.
“http://www.lemonde.fr/en/energies/article/2022/12/03/russia-owns-the-only-plant-in-the-world-capable-of-reprocessing-spent-uranium_6006479_98.html”
I think this article in Le Monde supports your position
Methinks that Putin is rattling people’s cages here. He says he is wondering about it but you can be sure that the technical studies have been done to determine exactly what would happen if Russia did this. It may be that he wants western countries to get into a mini-panic and waste time and resources trying to make themselves ‘independent’ of Russia or maybe get them a bit on the anxious side of life.
I suspect he’s also performing for an unaligned audience (China, India etc.) He’s inviting aghastitude from the US/NATO (OMG, Putin is so evil, how could he even contemplate such a heinous act) at which point he can note that not only is the US/NATO already doing this to a much greater degree, but they’re twisting the arms of other countries to go along with it as well.
https://english.news.cn/20240912/89e4c42410cf4bc7a1d6d6afba192300/c.html
September 12, 2024
Türkiye’s first nuclear plant delayed by withheld Siemens parts
ANKARA — The opening of Türkiye’s first nuclear power plant has been postponed after Germany’s Siemens Energy withheld critical components, Turkish Minister of Energy and Natural Resources Alparslan Bayraktar said Wednesday.
The delay will push back the launch of the Akkuyu Nuclear Power Plant’s first reactor by a few months, Bayraktar told the semi-official Anadolu Agency.
“There is equipment related to the nuclear island that Siemens has yet to deliver, which is still in its warehouses. The equipment, used in the construction site, ensures the transmission of electricity. Unfortunately, it has the effect of slowing down the construction,” he said.
The Akkuyu Nuclear Power Plant, located in southern Türkiye’s Mersin province, is being built and will be operated by Russia’s state nuclear power conglomerate Rosatom. It is designed with four nuclear reactor units, each with a 1,200-megawatt capacity.
The construction began in 2018 and is scheduled to complete in 2026.
The decision by Siemens was likely influenced by Western sanctions on Russia amid the Ukraine crisis, Bayraktar said…
https://newseu.cgtn.com/news/2024-09-11/China-steps-in-as-withheld-Siemens-parts-delay-Turkish-nuclear-plant-1wOHFghN9o4/p.html
September 11, 2023
Türkiye nuclear plant delayed by withheld Siemens parts – China to supply instead
The opening of Türkiye’s first nuclear plant has been delayed after Germany’s Siemens Energy withheld key parts – prompting Russia’s Rosatom, the builder and owner, to buy them in China, the Turkish energy minister said on Wednesday.
Siemens’s non-delivery will delay launching the Akkuya power plant’s first reactor by a few months, Minister Alparslan Bayraktar told state-run Anadolu agency. The decision likely stems from Western sanctions over Russia’s war in Ukraine, he added.
Though Türkiye had initially planned to start up Akkuyu’s first reactor in 2023, delays have pushed that back to next year, with the remaining reactors to come online by the end of 2028.
A Siemens Energy spokesperson confirmed that some parts were not delivered to Türkiye due to German export regulations.
Bayraktar said that Rosatom, Russia’s state nuclear energy company, has already struck deals with Chinese companies to produce equivalent parts, though he provided no company names.
“There are alternatives. Rosatom already ordered alternative parts from Chinese (firms), and they will come from China,” Bayraktar said, adding that Türkiye could consider fining Siemens Energy over the delay, even though it has worked with the German company for years.
“This attitude will make us question their position in future projects,” he added….
Probably with Siemens connivance in China
Sanctions are price supports for your competition.
Also a really big tool of government control. They can now dictate who private citizens can do business with and associate with. This is being tested on Youtube and other social media sites.
Not knowing specifically where they are sourced for parts, but restricting especially nickel and titanium (key metals in jet engine parts) would increase commodity prices for those, leading to increased costs for air travel: an important source of greenhouse gases, possibly leading to less air travel: a positive for the environment.
The Green New Putin Deal!
Titanium processing is a highly complex technology, especially for the aero industry. Presently there is no substitution for Russian titanium available. Moreover, Russia is scaling up their airplane building capacity and one can expect in coming years that domestic Russian market will absorb all the available titanium. Airbus and Boeing will need to find new suppliers, regardless of the sanctions or limitations.
Some recent problems with titanium in aerospace:
FAA investigating titanium used in some Boeing, Airbus jets
FAA investigating how titanium parts with falsified records wound up in Boeing and Airbus planes
I do realise that all that we import from China and Russia are profitable to their economies. However, it appears to me, a novice, that all the aforementioned nations have to do to gain the upper hand is withhold exports to the West. It is unbelievable to me that the US and its allies didn’t consider the cost of pulling the tigers’ tails to our own positions both economically and militarily. Both the Chinese and Russian people have suffered economic hardships in the not so distant past; they are tough. Whereas, we in the West are soft. It seems like a winning hand for the BRICS once again.
I dont get, he is thinking a about it. So many people are saying how Putin is such a good politician but i just dont see it at least when it come to fight back against west. From what i see he is helping west, the longer he take to sanction west the less impact the sanction will be on the west
Rosatom employs millions of Russians and exports nuclear power plants to the “friendly” countries in need of an inexpensive electricity, these are 75 years long contracts tying up customers to the Russian economy “forever”. How many nuclear power plants our politicians exported for profit ?, likely around zero. Consider Sahel – French speaking Africa, French Areva has been expelled and no prospect of coming back. Uranium from Niger will power Rosatom’s customers from now on.
Putin’s revenge, herding up customers for a reliable and cheap energy, grains, metals, resources, education and hardware. And a bonus point, no need for USD nor Euros to do business with Vlad.
Doesn‘t Putin do martial arts ?
He is part of STAVKA which means he discusses and gets advice from close associates. He does not need to convince TV personalities and not WaPo or NYT.
He is well aware he can end the USA forever by fragmenting it but what are the second-order consequences ? Americans seem oblivious to consequences and are cartoonish in behaviour.
Chamberlain was piqued that Hitler seized Prague in 1939 having restricted his ambitions to Sudetenland in 1938 so rushed to guarantee Poland which he knew Britain could not do without USSR – yet they could not make agreements with USSR for party reasons until 1941
In much the same way Russia knows from its archives and from backchannels with Pentagon how frightened Western politicians are of losing their own populations so need an imminent war to consolidate the enthusiasm they had for vaccination into war fever
Americans lack impulse control
So, Putin is bad politician because he does not do what you expect him to do? Or maybe, because he does not brief you in detail about the stuff he is doing?
Russia has a lot of clout here-
‘A resource superpower, Russia is endowed with substantial reserves of virtually all the primary commodities required to keep a modern economy functioning.
The country possesses up to 12% of the world’s oil reserves, 32% of its natural gas, 8% of all untapped uranium, and 11% of the planet’s coal.
Russia accounts for 25% of global iron reserves, 33% of nickel, 15% of zinc and titanium, 11% of tin, 10% of lead and rhodium, 8% of chromium, 7% of copper, 3% of cobalt, 2% of bauxite and about 1% of gallium, plus substantial amounts of beryllium, bismuth, and mercury. Russia also has about 12% of global potash (used in an array of areas, from agriculture and industrial chemicals to pharmaceuticals).
Up to 23% of the world’s gold, 12% of silver, up to a fifth of platinum group metals, and as much as 55% of diamonds are buried under Russia’s soil.
Russia is also a potential world leader in the production of rare earth minerals (which are used in an array of modern high-tech devices, communications systems and advanced weaponry). While it only accounts for about 2% of rare earths production today, Russia has the second-largest reserves, constituting up to 28.7 million metric tons, and has committed to major investments in production and processing. Known rare earths possessed by Russia include samarium, europium, gadolinium, lanthanum, neodymium, promethium, and cerium.’
https://sputnikglobe.com/20240912/russian-force-majeure-on-resource-exports-could-clobber-western-economies-heres-why-1120125698.html
No wonder they wanted to knock over the country and loot it again like they did in the 90s.
I believe I saw a comment in NC maybe a year ago along the lines that “Russia has a quarter of the Earth’s resources and China makes a quarter of what we consume. And we want to pick a fight with them?”
Looting Russia was the plan for paying off US national debt. Just kidding, it would all be spent on drugs and hookers.