Arctic Lead-Zinc Deposit Reflects Limited Options for Kremlin

Executive Summary:

• After nearly 25 years, Russia is closest to constructing a new mining and processing plant at the Pavlovskoye lead-zinc deposit in the Arctic archipelago of Novaya Zemlya.
• The Pavlovskoye project was abandoned after Western sanctions caused Finnish companies to withdraw participation in construction and design in 2023. Russia’s state-owned nuclear corporation, Rosatom, attempted an alternative design only to find it was economically unviable. 
• The project reflects how Western sanctions have significantly disrupted the Kremlin’s need to ramp up production and reduce dependence on minerals and raw materials.

Russia is advancing plans to build a new mining and processing plant at the Pavlovskoye lead-zinc deposit in the Arctic, one of the largest of its kind in the world. During World Atomic Week in Moscow on September 25 to 28, Vladimir Verkhovtsev, general director of the mining division of Russia’s state-owned nuclear corporation, Rosatom, announced to Russian media outlet RBC that the corporation is moving forward with design and construction of a floating mining and processing facility for the Pavlovskoye deposit (RBC, October 2). Globally, however, zinc and lead are expected to be in surplus through 2025 and 2026 (SMM, October 14; Interfax, October 15). 

The deposit is located on Russia’s Arctic Yuzhny Island in the Novaya Zemlya archipelago, separating the Barents and Kara Seas. The new plant will have a planned capacity of 3.5 million tons of ore per year for 20 years (Aker Arctic, March 2020; TASS, October 2). With commissioning due by December 31, 2031, Rosatom is unlikely to construct the facility on its own, as reports indicate that companies from the People’s Republic of China (PRC) may join the project to support construction and exports (TASS, October 2).

The Pavlovskoye deposit is the fourth-largest polymetallic (zinc and lead) deposit in Russia. Its latest resource estimates amount to 47.7 million tons of ore containing approximately 2.49 million tons of zinc, 549 thousand tons of lead, and 1,194 tons of silver (Port News, March 30, 2017; Mining Technology, May 5, 2022; PromRazvedka, October 5). 

This latest announcement comes after Rosatom was forced to abandon construction plans in 2023 due to sanctions, as well as the failure to design an economically viable replacement land-based facility. The deposit was discovered in 2001 and, after geological exploration and survey work was completed in 2020, production was due to begin in 2021 (Service+ Group of Companies, June 30, 2016; Rosnedra, August 19, 2020; Arctic Russia, accessed October 21). Finnish company Metso Outotec was originally the design partner for the processing plant, while Aker Arctic, also Finnish, had prepared a design for a floating barge (Aker Arctic, March 2020; The Barents Observer, April 18, 2023). In April 2023, Rosatom announced that the project was postponed due to sanctions against Russia following its full-scale invasion of Ukraine, as Metso Outotec and Aker Arctic ceased involvement (TASS, March 30, 2016; RBC; Kommersant, April 18, 2023; Metso, April 24, 2023). 

Russia then announced it would pursue a land-based option, which was later abandoned due to financing constraints. Rosatom claims that the new floating design will cost half as much as a land-based project (RBC, October 2). It “simplifies logistics, reducing the need to transport raw materials over long distances, and minimizes environmental impact,” according to Verkhovtsev (PromRazvedka, October 5).

Reports have circulated that two PRC companies, NFC and Pauerite Limited, are likely to be involved in the construction project and in enabling metal exports to Asia. Both companies signed memoranda of understanding with Rosatom regarding the Pavlovskoye deposit on the sidelines of the 2024 AtomExpo in Sochi (RBC; Vedomosti, October 2). Details of the memoranda are not publicly available. They were reported on by a number of Russian media outlets, however, which highlighted PRC leadership in metal mining technologies and in the construction of floating facilities (KO.ru; Dprom.online, March 26, 2024). PRC officials maintain their country’s cooperative, “win-win” approach toward the Arctic and that any “geopolitical competition in the Arctic is very unwise” (Li Xiangfeng, Counsellor, Department of Treaty and Law, PRC Ministry of Foreign Affairs, Quote from the Arctic Circle Assembly, October 2025).  

The development of lead-zinc mineral reserves on Novaya Zemlya is among the national priorities outlined in the Kremlin’s 2020 Strategy for the Development of the Arctic Zone of the Russian Federation and Ensuring National Security for the Period to 2035 (President of Russia, October 26, 2020). The Kremlin’s 2022 Development Plan for the Northern Sea Route for the Period to 2035 calls for Rosatom to construct a port on the Novaya Zemlya archipelago between 2025 and 2026 for loading lead-zinc concentrate (Government of Russia, August 1, 2022). The degree to which Rosatom is receiving direction and support from the Kremlin is not publicly stated; however, Verkhovtsev recently said that the Pavlovskoye project has the potential to become a new standard for Arctic development and to make a significant contribution to Russia’s mineral resource base (Far East and Arctic Development Corporation, September 26). Kirill Kamenev, a Russian official associated with the Far East and Arctic Development Corporation, a state institution under the Ministry for the Development of the Russian Far East, said that the project will “create a center of economic growth in the Arctic region and a new industrial cluster with its own production and port infrastructure” (Far East and Arctic Development Corporation, September 26). The plant will include a 450-person shift camp and an administrative and utility building complex.

Rosatom nuclear technology is likely to provide electricity to the facility. The corporation touts its small modular reactor (SMR) design as the ideal solution for powering remote Arctic development projects. In 2017, Rosatom had proposed that an SMR provide electricity to the facility (RIA Novosti, November 21, 2017; The Barents Observer, February 26, 2018). Russia is the first country to operate an SMR commercially and is constructing a second one. Its operational SMR, the floating nuclear power plant Akademik Lomonosov, located in Russia’s Arctic Chukotka Autonomous Okrug, houses two 38-megawatt electric (MWe) pressurized water reactors, or SMRs, as their power capacities are below 300 MWe each (Rosenergoatom, World Nuclear Association, accessed October 22). The PRC’s first commercial SMR, the Linglong One ACP100 design by China National Nuclear Corporation (CNNC), located in Hainan, is not far behind Russia in its construction (China National Nuclear Corporation, April 27; The Asia Review, October 16).

Development of the Pavlovskoye deposit coincides with Russia’s annual nuclear exercise, Grom (Thunder) in the Barents Sea (see EDM, October 21, 23, 29, 2019; President of Russia, The Barents Observer, October 22). During the exercise, a Sineva ballistic missile was launched from one of Russia’s nuclear-powered submarines in the Barents Sea (President of Russia; The Barents Observer, October 22). In September 2024, Rear Admiral Andrei Sinitsyn, the head of the Novaya Zemlya facility, said that the “test site is ready to resume full-scale tests” and that “[i]f the order comes, we can start testing anytime” (RG.ru, September 17, 2024).

The Pavlovskoye project is not an isolated development. It is a collective reflection of the Kremlin’s alignment of its Arctic ambitions with domestic needs. These needs are driven by reliance on imported raw materials, particularly zinc and lead, which are essential to military equipment and defense technologies (see EDM, October 3). In April this year, Russian President Vladimir Putin emphasized the need to increase Russia’s domestic production of military equipment as economic militarization in Russia has become an end in itself (President of Russia, April 23; see EDM, June 1, September 25). The Russian government recently nationalized Dalpolimetall, one of the country’s largest lead and zinc mining companies (RBC, February 21; Interfax, March 17). In September 2024, Russia launched its largest zinc concentrate plant, which, after delays due to a fire, is set to process up to 600 thousand tons of zinc and 82 thousand tons of lead concentrates (The Moscow Times, February 6, 2024; TASS, September 4, 2024; Zeto, accessed October 22). 

Russia’s renewal of the Pavlovskoye project signals more necessity than a demonstration of technological prowess or Arctic know-how. Fortunately for the Kremlin, Russia holds vast natural resources such as those at Novaya Zemlya. Exploiting them, however, is likely proving to be more complicated than the Kremlin anticipated.