NICKEL PRODUCTION ON COMMUNIST COUNTRIES (ER M 76-1020)

Created: 3/22/1976

OCR scan of the original document, errors are possible

CENTRAL INTELLIGENCE AGENCY

VPROG

arch 6

MEMORANDUM FOR: Rebecca Wright

Ocean Mining Administration Department of the Interior

Nickel Production in Communist

Countries

Attached is the information on Communist countries' nickel production, plans for expansion of production capacity, and capability fornickel that you requested

3arch. The information is unclassniea nut should not be attributed to this Agency. If you have further questions on this please call

Office of Economic Research

Attachment: as stated.

Nickel Production in Communist Countries

SUMMARY

The USSR is the world's second largest producer of nickel, its annual output being exceeded only by that of Canada. It has only limited export capabilities at present,ulti-billion ruble project is underway in Northern Siberia which will make possible substantial increase in exports not only of nickel but also of platinum-group metals and copper.

Cuba is the only other important producer of nickel amofyg the Communist countries. It plans substantialin production with aid from the USSR and Eastern Euro;ae. The assisting countries are scheduled to be the prirocipal recipients of the increased output. However,by helping to meet Communist needs Cuban nickel may free Soviet nickel for export to non-Communist countries.

The Communist countries of China and Eastern Europe are essentially "have-not" countries with respect to nickel. China imports most of the nickel it needs from non-Communist countries. Eastern Europe relies mainly on the USSR and Cuba for its supplies. Yugoslavia is somewhat of an It now imports nickel but with foreign assistance plans to become an exporter of ferronickel

I. Present Production

The USSR is by far the largest Communist producer of nickel. Soviet output5 is estimated atetric tons or about two-thirds of Canadian output.*

The Communist countries of China and Eastern Europe produce only small amounts of nickel. Their combined annual output is less0 tons. Cuba, however, is an important producer with an annual output of0 tons divided about equally between nickel oxide and sulfide concentrates.

Tl. Present Supply Relationships

The USSR, an importer of nickel in the, became an exporter in the latter half of. Annual eajports have fluctuated but have averagedn recent years. The principal recipients have been non-Communist countries (West Germany, Japan, the United States, and the UK). Most of the remainder has gone to Eastern Europe and only very small amounts to Communist China. The USSR, on balance, ismall net exporter of nickel because it receives about half of Cuba's output of nickel as partial repayment for its extensive economic assistance to that country.

'*'" "soViet-output includes smelter products such as nickel oxide and fcrronickel as well as fully refined nickel. Soviet smelter-refinery output is now about equal to that, of Canada. The latter's total output also includes ores' and concentrates which are exported, principally to the UK, Norway, and Japan, for smelting and refining.

Eastern Europe also imports nickel from Cuba tothe amounts received from the USSR. In contrast to Eastern Europe, Communist China imports most of its nickel from non-Communist countries, mainly Canada. China has imported only very small amounts of nickel from the USSR and Cuba in recent years. 34 China imported0 tons of nickel per year from all sources.

III. The Soviet Nickel Industry

The USSR has extensive reserves of nickel about equal to those of Canada and exceeded only by those of Cuba and New Caledonia. f the reserves are in the form of ccupper-nickel sulfide deposits on the Kola Peninsula and at Noril'sk and the nearby Talnakh region in the Soviet North. The remaining deposits consist of lateric deposits in the Urals, the Ukraine, and Kazakhstan and of nickel-cobalt arsenides in Tannu-Tuva. Another potentiallysourceopper-nickel deposit discovered in recent years near Nizhne Angarsk at the Northern end-of Lake Baikal.

The deposits at Noril'sk account for about half of Soviet nickel output. The other principal sources are the deposits on tho Kola Peninsula and in the Urals- Anew but small producer of nickelerronickel plant at Pobugskoye in the Ukraine, it was put into operation in

The USSR is concentrating most of its efforts for

-

expansionnickel productionajor development project at Noril'sk. The project was initiated in thefter discovery of rich deposits nearby at Talnakh. Several mines have been developed but large-scale exploitation has been held back by difficulties encountered by the Soviets in developing satisfactory technology for processing the ores at Talnakh, which differ considerably from the ores of the older Noril'sk deposits. One step taken by the Soviets to move ahead with the project has been to purchase "flash-smelting" equipment and technology from Finland for the processing of nickel and copper concentrates. of equipment are scheduled to be completed However, additional mine development and construction of concentrating facilities, refineries, and otherand ancillary facilities probably will continue into. Aggregate Soviet investment in the Noril'sk project may reach several billion rubles. The deposits in the Noril'sk area are roughly comparable to those of the International Nickel Company at Sudbury, Ontario in that theyich source not only of nickel but also of copper, cobalt, platinum-group metals, and various' rare metals.

IV. Production Plans A. USSR

The USSRplans to increase itsof.onshis target

- 4-

implies productiononsost of the increase is scheduled to come from Noril'sk. No formal goals have been set for the periodut substantial increases in production probably will be realized. Noril'sk alone, according to some indications, nay attain an annual outputons. At least moderate increases in production are likely at othersites by means of enlargement and modernization of focilitics. ong-deferred project for expansion- of nickel production at Burukhtal in the Urals could also be reactivated. The Soviets might also resume.their earlier and unsuccessfulefforts to obtain foreign participants in the Burukhtal venture.

B. Cuba

Cubaajor increase in its production of nickel, but target dates for completion of the expansion projects are not known. The two existing US-built plants at Nicaro and Moa Bay are to be reconstructed and expanded with Soviet assistance to boost annual output0 tone. The USSR is also providing assistanceew plant at Punta Gorda with an annual output0 tons. Provision is made for subsequentof the plant. 0 tor plant is to be built with financial help from the Council for Mutual rronomic Assistance, tho Soviet-Kast European counterpart

to the Common Market.

C. Yugoslavia

Yugoslavia plans toining and fcrro-nickel complex in Macedonia The project is being financed by credits froa the US Export-Import Bank, various commercial banks, Yugoslav banks, and the Polish and Soviet governments. Technical assistance is being providedS firm. Planned annual output is0 tons of ferronickelickel content0 tons.

V. Export Prospects

No dramatic increase in exports of Soviet nickel is likely in the remainder of. The Soviet plan to increase output0 implies an estimated increase in annual output00 tons, of which an important share would be required for domestic use. However, inas work on tho Noril'sk project moves ahead and nears completionthe Soviets will-have large amounts of nickel available for export. Annual Soviet exports could eventually approach and evenons if the Noril'sk combine reaches the size suggested by available evidence. The Soviets have particularto push ahead steadily on development of the Noril'sk complex because of its valuable co-products, platinum-group metals and copper, which are also sources of

- 6 -

foreign exchange earnings.

Cuba's capability to export nickel will be increased dramatically when all scheduled expansion projects are completed. Progress on these projects is likely to be slow, however, judging by the past records of Soviet and East European assistance on metallurgical projects. esult, only moderate increase in Cuban export of nickel is likely during the remainder of the decade, and most of this is earmarked for the assisting countries. In, the projected increases in Cuban outputif they materializemay prove more than adequate for East European and Soviet needs and mayurplus for export to non-Communist markets.

Yugoslavia plans to export0 tons of0 tons of contained nickel in its planned output of fcrronickei. Poland is toons annually forears and is negotiating for larger amounts. Most of the remainder will be marketed in non-Communist countries according to available information.

Original document.

Comment about this article, ask questions, or add new information about this topic: