EU plans to propose sanctions against Russia's mining industry

The European Union's politically independent executive arm, the European Commission, is planning to bring a proposal for a ban on new investments in Russia's mining sector as part of a new package of sanctions for the Russia-Ukraine geopolitical crisis.

In accordance with our source, the prohibition on mining investment, which will have exceptions for certain products, is part of a ninth EU sanctions package that officials will discuss with member states next week and aim to reach an agreement on.

Before the Russia-Ukraine conflict, foreign investment accounted for one-quarter of Russia's vast mining sector, producing commodities such as gold, iron ore, uranium and phosphates.

It would be Brussels' first direct attack on Russia's metals sector, which it has previously avoided due to concerns over global supply chain effects. The measure would mark a significant step forward if backed unanimously by the 27 EU states.

Glencore, one of the world’s largest globally diversified natural resource companies, holds a 10.55 per cent stake in EN+ Group, whose metal segment is represented by Russian aluminium giant Rusal.  Investors worldwide, including BlackRock, Vanguard, and UBS Asset Management, hold positions in Russian mining companies, including Norilsk Nickel and Evraz.

There could be amendments to the EU sanctions package before implementation, which includes export controls on civilian technologies that Brussels believes are being used by Russia to maintain its arms factories, a ban on transactions with three other Russian banks, and targeted sanctions against 180 more individuals. However, the European Commission is yet to comment on it.

Gary Nagle, the CEO of Glencore, said, “The Company would continue to monitor and take any appropriate actions regarding sanctions that might affect its assets.”