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Mineral Imperialism

Lest we become too obsessed with Russia’s politicized oil and gas sector, there are also concerns that the massive mining clout held by Norilsk Nickel could be mobilized as another Kremlin weapon in the case of nationalization. Rumors say that Mikhail Prokhorov was pressured by the government to sell his stake to loyalist Vladimir Potanin, who has said that it would “not be a tragedy” if the government took over his company. From AP:

In the West, there is quiet concern Russia will use its clout in the metals market to help consolidate its geopolitical power. “Due to Russia’s actions on the nonferrous metals markets, there have been claims of manipulation or dubious behavior,” Robert Larsson of the Swedish Defense Research Agency wrote in a report. “As the sector by and large is shielded from insight and data are secret or unreliable, it is hard to assess, but it is clear that Russia’s impact on the markets is substantial.” Metals are too easily moved around for Russia to cut off supplies to a single country, as it can with piped gas. But any interruptions at mines like Norilsk’s would have a huge impact on markets. “A Russian decision, or threat, to cut off supplies of minerals would certainly drive the world price up _ probably significantly,” said Liam Anderson, co-author of the book “Strategic Minerals and Global Geo-Economics.” Disruptions in nickel or aluminum supplies, he said, “would have a trickle-down effect throughout the global economy.”