Two Russian Government Ministers Say Putin’s Russia Running Out of Soviet Resource Reserves

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(Source: Nenets autonomous okrug government portal via The Barents Observer)

Executive Summary:

  • Russian President Vladimir Putin’s invasion of Ukraine has rapidly turned into a war of attrition. Along with Moscow’s difficulties raising an army and adequately equipping it, Russia is running out of the resource reserves left over from Soviet times.
  • Senior Russian officials are warning that their country is rapidly running out of easily accessible mineral deposits, has struggled to locate new ones, lacks the infrastructure needed to exploit the resources, and is exhausting its capacity to generate sufficient electrical power.
  • The Kremlin has failed to allocate funds to meet these challenges, choosing instead to divert funds toward the war. Putin could turn to China for help, but Beijing will demand concessionary arrangements, which would likely leave Russia weaker and infuriate many Russians.

Russian President Vladimir Putin’s expanded invasion of Ukraine has rapidly transformed into a war of attrition. Looming behind Moscow’s problems in recruiting enough men to fight and providing them with sufficient weapons is a bigger issue: Russia is running out of essential reserves left over from Soviet times. These reserves include natural resources developed before 1991, transportation infrastructure needed to access and exploit deposits, and a power grid that has not been expanded sufficiently since the Soviet period to support new finds or even fully realize old ones. Experts have talked about these problems for years. Now, these three problems have grown to the point that ministers and other senior officials are warning of real dangers ahead, even as Putin continues to offer upbeat talk about his plans for major projects in all three directions. Such projects are unlikely to be fully funded or ever completed so long as his war against Ukraine continues. (For an example of projects announced with much pomp that are delayed or never completed, see The Barents Observer, December 9, 2021). As the war wages on, the Kremlin leader is likely to be confronted with a serious deterioration in Russian capacities. He may be reduced to asking Beijing for help. China could provide the much-needed assistance, but it will come at a price: Moscow will have to make concessions that will render Russia Beijing’s junior partner, an arrangement that many Russians will find highly offensive (see EDM, June 16, 2022). The dwindling Soviet reserves may become an important foundation for more protests against Putin’s war in Ukraine, especially as senior members of the Russian government are actively discussing these problems (TASS, September 11). 

On September 11, Aleksandr Kozlov, the Russian minister for natural resources and ecology, warned that the most easily accessible natural resources of those developed in Soviet times will run out over the coming decade unless Moscow changes course. He asserted the need for a massive effort to explore for new deposits and build the transportation infrastructure needed to exploit them. If this does not happen, the minister continued, Russia will either face serious shortages of key minerals or be forced to import them from abroad—something that will be increasingly difficult in the current geopolitical environment (TASS; RIA Novosti, September 11; The Moscow Times, September 12). However, the problems of doing so are enormous, hence the prospect that Kozlov’s warning will not be heeded in the Kremlin. Most of the geologically unexplored regions of the Russian Federation are in the north and Far East, areas where few, if any, roads and rail lines exist and where the rapidly melting permafrost layers underlying them make any development both expensive and controversial (see EDM, December 6, 2018, November 14, 2023; Window on Eurasia, September 26, 2023; Kedr.media, September 12).

Moscow has already slashed funding for expanding geological research and the transportation network since the start of the full-scale invasion of Ukraine in February 2022, not only in the north and the Far East but across the country. The estimates of one Moscow expert demonstrate just how deep these cuts have been. They show that while 10 percent of Russia’s existing roads need to be repaired every year to avoid disaster, funding for such projects will allow for only six-tenths of 1 percent to be fixed this year, a decline of more than 90 percent (Sibreal.org, November 23, 2023). As a result, due to the lack of railways and highways, in the north, Russia will continue to rely on ice roads, available only in the winter and for a limited time due to global warming, and aviation. Exporting natural resources such as coal by either of those means is not cost-effective (Window on Eurasia, January 6, 2023).

A second warning of disaster came earlier from the Russian Accounts Chamber. The influential government agency pointedly said at the end of 2022 that Russia’s transportation infrastructure outside Moscow is inadequate, aging, and underfinanced and that these shortcomings are already having a negative impact on the country’s economic and demographic development. Where roads and railways do exist, their condition is so bad that traffic moves too slowly to meet the needs of the economy. Where they do not, the situation is truly disastrous (Ach.gov.ru, December 2022; Profile.ru, December 12, 2022).

Other Russian experts have built on this warning. They have pointed to an aspect that Putin and many Western observers have seemingly ignored. While Moscow likes to talk about developing routes such as the Trans-Siberian Railway and Northern Sea Route, it rarely builds the feeder highways and rail lines that would make such “mainlines” successful. Instead, the Kremlin builds giant projects without much regard for their real utility, yet another legacy of the Soviet past that Putin’s Russia has not overcome (Profile.ru, July 25, 2022).

A third warning of disaster ahead comes from Sergey Tsivilyov, Russia’s energy minister. On September 9, he said that Russia has now exhausted the reserves of electrical power generation equipment that had been left over from Soviet times. He warned that Russia has little chance of replacing that capacity anytime soon due to Western sanctions that keep Moscow from acquiring spare parts or new equipment and the lack of Russian government spending, given the needs of its military campaign in Ukraine. Tsivilyov added that the situation in the Russian Far East is now so bad that energy production there is at a high risk of collapsing, despite all of Putin’s assurances that the situation is in hand (TASS; The Moscow Times, September 9). The Russian minister’s pessimism rests on the findings of Russian experts who suggest that in the relatively near future, even the city of Moscow will suffer from power shortages (So-ups.ru, accessed September 17). Another expert has concluded that half or more of Russia’s aging power plants and power distribution networks cannot be repaired, let alone have their capacity increased, because of sanctions and the absence of domestic funding (Newizv.ru, July 20).

Many Western analysts are currently looking for signs of a split in the Russian elite over the war. However, they have generally failed to attend to complaints like those of Kozlov and Tsivilyov and the experts at the Accounts Chamber. These are clear if indirect evidence that even those at the top of the Russian government are unhappy. Their complaints about how Russia is losing its Soviet resource reserves may, in fact, be the most powerful argument that those within the Russian government can make about the war and the degradation it is inflicting on the Russian Federation. These complaints may even become the basis for broader protests against Putin’s war.