In November this year, the Iovinsky deposit in
Russia’s Ural Mountains will produce its first
tonne of the olivine-rich mineral, dunite.
According to JSC North Urals Dunites (NUD), the company
developing Iovinsky, the project, which is located on the
Urals’ Mount Konzhak, will have a capacity of 1m
tpa from 2019, with the potential to increase this volume to 2m
tpa in the future – making it the world’s
second largest olivine mine.
NUD’s CEO, Nikolay Kuzmin, believes that this
output will be enough to meet demand from Russia’s
entire foundry industry and leave some for export. Once the
mine is producing at a rate of 1m tpa, the payback period is
estimated to be three-to-four years.
Total investment needed to launch mining operations at
Iovinsky is estimated at Russian rouble (R) 950m ($13m*),
including R150m ($2m) to construct a road to the deposit.
Installing access infrastructure has been the most challenging
part of developing the project to date, as it faced fierce
resistance from environmentalists and local communities
throughout its construction.
At 1,570 metres, Konzhak is the highest mountain in the
Sverdlovsk region and is considered to be an area of particular
natural beauty. It is also the location of a relatively famous
marathon, attracting people from all over the world to run the
42km race, which takes place at the end of July every year.
In order to placate the protestors, who threatened to block
the entire project, NUD was obliged to allocate additional
funding to develop tourist infrastructure in the area, as well
as a number of environmental protection measures.
The road, which was started in 2014, was finally finished at
the beginning of this year, allowing NUD to progress with
building the mine and processing plant, at a cost of
approximately R 250m ($3.4m).
Mount Konzhak, the site of NUD’s
proposed Iovinsky dunite mine, is located in the
Sverdlovsk region of Russia’s Ural
Mountains and is a popular recreation spot – a
fact which has sparked conflicts over the
mine’s development. (Alex Alishevskikh,
The dispute over the Iovinsky access road was one of the
most prominent battles between the mining sector and
environmentalists in Russia in recent years. In 2014, it
spurred a number of social media campaigns, including the "Save
Konzhak" movement and several thousand people signed a
petition, which was sent to the Ministry of Ecology and Natural
Resources, to ban all NUD’s mining plans.
In the end, however, the company managed to convince the
ministry that the mine would have a minimal ecological impact.
According to Kuzmin, the mine plan does not include any
overburden dumps, as the deposit’s mineralisation
lies at surface and to depths of just 0.5-2.5 metres, meaning a
shallow open pit operation is possible.
Once extracted, ore will be transported to the Karpinsk
district, in the vicinity of the Veselovskaya railway
substation. A crushing and screening plant is being built 5km
from Karpinsk and is due to be commissioned later this
"We have deliberately chosen a place remote from Karpinsk
city, so as not to cause disturbance from noise or dust.
Mineral dust is also our product," Kuzmin said, explaining that
the company plans to capture and sort its processing waste
Opponents of the project argue that similar mining complexes
in Russia, for the production of nickel and uranium, for
example, have caused considerable ecological destruction, even
though it was asserted at the initial stages that these
projects would have very little impact on the environment.
"We simply do not believe that manufacturers will organise
production as they have said," Konstantin Kuznetsov, head of
the local recreation club at Karpinsk and one of the
environmental activists opposed to NUD’s Iovinsky
"Many rivers originate in the Ural Mountains. So far, they
are clean, but [building a mine] could contaminate the rivers
flowing down from the mountains of the Konzhakovsky array,
destroying the aquatic ecosystem of the area, which is already
in a poor condition, due to the operation of the nearby
platinum mine," Nadezda Zakharova, another activist, added.
Kuzmin, however, insists that all the necessary measures
have been taken to ensure the mine will not damage the
environment or pose a health risk to humans. "To investigate
the [possible environmental contamination] of Iovinsky, we
enlisted the services of the Russian Academy of Medical
Sciences. We also carried out tests in our own laboratories.
This mineral is completely safe for the body and the
environment, so the operation process poses no threat," he
He noted that studies on the mine’s ecological
impact will continue up to 2019, until which point the mine
will operate on a pilot scale.
NUD plans to mine dunite as a source of olivine to
Russia’s casting industry and potentially
its agricultural and
construction sectors. (Pasek)
Openings for olivine
NUD’s plans to open Iovinsky could
significantly alter the supply chains of several Russian
"Olivine is needed for a number of uses," said Kuzmin. "This
is magnesium-silicate raw material with 50% magnesium content,
40% silicon and 10% iron and nickel. Foundries and molding
factories have switched from using silica (quartz) sand to
olivine, for performance reasons but also because silica sand
can cause the disease, silicosis. Using olivine improves
casting quality, due to the absence of silica, and eliminates
the threat of silicosis among workers."
According to NUD, there may be political and industrial
pressure to prohibit the use of silica sand in the foundry and
molding sectors in Russia in the future, which would lead to
higher demand for olivine.
"In 2003, the Russian Ministry of Health banned the use of
silica sand in sandblasting, because of silicosis," Kuzmin
said. "It was not banned in the casting and molding industry,
because the substitute material would have to be imported from
Norway and their olivine is too expensive, costing around
The Iovinsky deposit was originally identified as a target
for development in 1984, during the Soviet era, and was
considered one of the most important mining areas in Russia,
owing to its unique mineralogy. However, progress was hampered
by the economic crisis that preceded the collapse of the Soviet
Union in the late 1980s and start of the 1990s and led to
Iovinsky being abandoned.
"The mineral is unique because it is also used in metallurgy
and in construction as a concrete filler," Kuzmin explained.
"Dust from olivine processing can be used in feeds compounds
increase magnesium levels agricultural animals, as well as for
soil oxidation. There has also been some research on using
olivine as an absorber in water filters. Next year, we can
intensify this testing process and discover a number of new
applications for olivine," he said.
Research performed by NUD to date includes testing olivine
as a feed additive for poultry. The recommended concentration
of magnesium in poultry food is 3,000-4,000mg/kg of dry feed
and its addition brings a number of benefits to farmed birds,
according to Evgany Ermolaevets, CEO of the Surskay poultry
farm, which took part in the trials.
"We have previously commissioned studies of the potential of
using olivine in the construction of roads," said Kuzmin. "The
results showed that the mineral can be used for this purpose,
so we are going to try it in a segment of the road we build to
the Iovinsky deposit. If the project is successful, it would be
the world’s first olivine road," he
Marketing Russian olivine
According to Kuzmin, NUD’s first priority will
be to meet the olivine demand of Russian customers. When the
company achieves a stable level of production and can
comfortably supply the domestic market, it will shift its focus
The cost of Russian olivine for foreign customers could be
twice the domestic price, but would still be cheaper than
prevailing prices paid in Europe, Kuzmin claimed.
He estimates that the initial prices will be roughly
equivalent to silica sand and will not exceed €100/tonne,
but said that is likely to be revised in future, depending on
demand levels and export business.
The company expects it will easily be able to compete with
Norwegian exports, which contribute 6.5m tpa dunite to the
Initially, however, NUD plans to sell its olivine in small
batches to domestic customers, with a focus on supplying the
Vector Vekker, the head of the Karpinsk city authority, said
that the Iovinsky deposit contains reserves of more than 1bn
tonnes dunite – meaning that the project can sustain
mine life of, in theory, up to 1,000 years.
NUD has secured a mining licence for an initial 20-year
period, but expects to extend this.
According to NUD’s plans, the olivine
processing plant will also extract magnesium, silicon, nickel
and platinum from the Iovinsky ore, which will deliver
by-product revenue for the company, although economic problems
have delayed the project’s timeline.
"We were going to launch the plant by the end of 2016, but
our schedule has been affected by the devaluation of the
Russian rouble," Kuzmin explained. "Initially, for the
processing plant, we were aiming to purchase equipment from the
Czech Republic. However, when the rouble collapsed, the cost of
this equipment for us in rouble equivalent rose almost three
times. As the result, we have had to switch to domestic
manufacturers and now hope to launch the processing plant at
the beginning of 2017."
Kuzmin’s "blue sky dream" is to construct an
olivine processing plant capable of producing enough magnesium
that would eliminate Russia’s need to import this
metal from China, and even compete with its Asian neighbour in
"We are confident that our material will be very competitive
on price," he added.
*Conversions made March 2016