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Vladimir Litvinenko: “Raw material sovereignty is a special area of state responsibility”

Литвиненко и Орешкин
© Форпост Северо-Запад / Павел Долганов

According to the expert, resource independence can be achieved through the formation of new geological knowledge, as well as improving the quality level of training of engineers and scientific personnel.

This topic is once again on the agenda due to the fact that the European Union continues to try to revise the traditional laws of the market, which were originally created to achieve a global balance between the interests of suppliers and consumers. The EU countries, which are experiencing more and more serious resource hunger, including due to the lack of their own raw material base for the "green transition", are trying by all means to reduce their expenditures on imports of minerals and products of their primary processing.

Such instruments as a price ceiling on Russian oil or a carbon tax for the Old World's trading partners are an attempt to take on the function of a price regulator along the entire value-added chain. That is, to create a situation in which quotations for hydrocarbons and strategically important metals - copper, nickel, aluminum, rare earth elements and so on - are determined not by market relations, but primarily by the will of the buyer.

СПГ
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The increased interest of the European Union in cooperation with Central Asian countries fits harmoniously into the same logic. Their main share of total capitalization is concentrated in raw material resources, and it is there that the EU's investments are aimed today. By investing huge funds in the development of subsoil use in Kazakhstan, Tajikistan, Uzbekistan and other republics close to us, Brussels is actually "pulling" our neighbors into the fairway of its economic interests.

Thus, in 2022, Astana attracted $12.5 billion through the sale of large shares in companies or individual projects to European businesses, which is a quarter more than in 2021. This figure is expected to double in three years. Do such trends increase the risk that Russia may soon find itself in the ring of unfriendly countries, and even direct competitors?

The answer to this question is all the more relevant because the perception of our country's unlimited resource potential is largely erroneous. It is based on statistical reports on the state balance of reserves and replenishment of the raw materials base, but does not take into account many unfavorable factors. For example, all key large and easily accessible mineral deposits are at a mature stage of development, and the efficiency of many of them is gradually falling. At the same time, more than 90% of all resource reproduction is provided by additional exploration of the flags of previously discovered deposits, as well as the discovery of natural treasure troves at deeper horizons.

разведка
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In other words, there is a cardinal deterioration in the quality of the mineral resource base, which, along with the current undifferentiated tax system in subsoil use and the decline of the state geological service, makes the prospects of the domestic mining and oil and gas industry far from being as optimistic as is commonly believed. In many respects we are still living on the backlog created by Soviet geologists, but it is necessary to realize that sooner or later it will come to an end.

The situation in the processing sector is no less alarming. Enterprises engaged in the initial stages of processing are mostly localized in Russia, while the most liquid links in the value-added chain, as before, are located abroad. In other words, the main rent from the sale of most high-tech end-use goods in our stores is still obtained by foreign companies, only now it is not European, but Chinese.

Manufacturers from China, for example, are the absolute leaders in sales of copper cables to our country. That is, domestic businesses mine metal, engage it in primary processing, and then sell it abroad in the form of rods (semi-finished products), from where it comes back in the form of finished products. Of course, in Russia there are also factories producing wiring, but their number clearly does not meet the needs of the state. And, of course, this is not just about copper.

РМК
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Will we be able to minimize all the risks associated, among other things, with Western sanctions pressure and ensure technological sovereignty? Forpost asked Vladimir Litvinenko, a leading expert in the fuel and energy sector and rector of the Empress Catherine II Saint Petersburg Mining University. As you know, this university has established and operates the Scientific and Expert Council "Nedra", which includes leading scientists specializing in such areas as geological exploration, extraction and processing of minerals.

- Vladimir Stefanovich, our neighbors from Central Asia, under pressure from the US and the EU, periodically take very unambiguous actions, such as refusing to service Mir plastic cards. How likely is it that this pressure will intensify in order to create a ring of countries unfriendly to us in southern Russia?

Газпром
© Форпост Северо-Запад / Павел Долганов

Vladimir Litvinenko: This is an attempt to change the "rules of the game" on a global scale. The UN Economic Commission for Europe, under the guise of "good" intentions, is actively finalizing a neocolonial system of international regulation of relations in subsoil use. Its essence consists in the fact that the countries possessing a rich mineral and raw material base, according to the authorities of the Old World, should be deprived of the opportunity to obtain the basic rent from its monetization, which will undoubtedly lead to the loss of their sovereignty.

The developed proposals will allow the EU and NATO to dictate to the natural resources exporting states such targets as the volume of extraction and processing, to determine the cost of raw materials, volumes of investment capital and form of financing, as well as the level and type of realization of applied technologies. This will undoubtedly have a negative impact on the prospects of achieving the UN sustainable development goals such as the eradication of poverty and hunger and universal access to relatively cheap and clean energy.

It also violates the UN resolution on the inherent sovereignty of states over their natural wealth as a basic element of the right to self-determination. Obviously, if a country loses its resource sovereignty, it also loses its right to independent foreign and domestic policy, up to and including the complete loss of the ability to control events on its own territory.

Фосагро - Белаз
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- And what exactly is the essence of the new EU requirements?

Vladimir Litvinenko: First, for the first time, an attempt is being made publicly for the first time to divide countries into "raw materials" and "progressive" countries, which contradicts the basic principle of the UN Charter - the sovereign equality of all powers. Thus, in the interests of the EU and the North Atlantic Alliance it is proposed to consider minerals not as a commodity, but as a service. This creates preferences for technologically developed countries, which, although they do not have their own resources, actively promote their rights to control them all over the world, because otherwise their global leadership will be nothing but a memory.

For this purpose, unprofitable pseudo-market conditions are created for mineral exporting countries, which radically changes the whole system of value formation of their products. If earlier it was determined by the balance of supply and demand, now this function is transferred to the consumer, who owns technologies of high processing and independently sets the price for resources. At the same time, the task of generating additional profit becomes the exclusive prerogative of those states that have the right to the relevant technologies.

This can be compared to the 90s of the last century, when Russia was assigned the role of a "gasoline station", supplying the West with the maximum possible volume of cheap raw materials. As a result, most of the population of our country was below the poverty threshold, while the European Union, on the contrary, was experiencing an unprecedented economic boom during this historical period. The situation was changed only after the election of President Vladimir Putin, who redistributed the rent in favor of our state and created conditions for a sharp increase in the quality of life of Russians.

солнечная панель
© Форпост Северо-Запад

Returning to the document prepared in the EU, we should separately emphasize the proposals on the extraction and order of supply of critical mineral raw materials for renewable energy sources, which, by the way, have a very high metal content. The EU countries are prioritized there, which will undoubtedly be to the detriment of other countries of the world. At the same time, one of the declared goals is the development of the defense industry of the Old World.

Now attempts are being made to adopt the documents on critical minerals and materials prepared in the EU as a basis for the UN, which is a direct imposition of its "rules of the game" on other powers.

- What steps could be taken to avoid unfavorable developments for Russia?

Vladimir Litvinenko: The development of our country's mineral resource base in the foreseeable future is possible only through the generation of new geological knowledge about the world ocean, Arctic, Antarctic, continental shelf, and the state subsoil fund on land. They can give a new impetus to the development of our country and, together with the progress of the deep processing industry, ensure Russia's sustainability for decades to come.

Of course, for this purpose it is necessary to sharply improve the quality of training of geologists, engineers and scientists. Urgently abandon the bachelor's degree in technical universities, replacing it with a full-fledged higher education, which includes fundamental and specialized knowledge, practical skills and additional competencies. The pilot project to improve the system of personnel training for the national economy, which is currently being implemented at St. Petersburg Mining University, has already proven its worth. Our task is to scale it up to the whole country as soon as possible.

Саблино
© Форпост Северо-Запад / Павел Долганов

Another most important task is to restore the capacity of the state geological service. We need to increase the reserves of natural resources, primarily through the search and exploration of new deposits. This is the foundation on which the well-being and prosperity of our country will be built for many decades to come.