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28 Feb 2022

Polina Devitt, Nina Chestney, Pratima Desai & Nigel Hunt, Reuters

Commodity exports, including transition minerals, at risk as Russia invades Ukraine

"Factbox: Commodity supplies at risk as Russia invades Ukraine", February 28 2022

Russia's invasion of Ukraine by land, air and sea threatens to disrupt exports of commodities such as grains and oilseeds from both countries, while the prospect of toughened sanctions against Russia could disrupt energy and metals supplies.

Russia and Ukraine are major wheat suppliers, accounting for a combined 29% of global exports, the bulk of which go through ports in the Black Sea. Much of that wheat is exported to major buyers in the Middle East and North Africa such as Egypt and Turkey. Ukraine is also one of the world's top four corn (maize) exporters and had been shipping around 4.5 million tonnes a month with major customers including China and the European Union.The two countries also account for about 80% of global exports of sunflower oil.

Europe relies on Russia for around 40% of its natural gas. Most comes through pipelines including Yamal-Europe, which crosses Belarus and Poland to Germany, and Nord Stream 1, which goes directly to Germany. By last year Ukraine was a transit corridor largely for gas going into Slovakia, from where it continued to Austria and Italy. Russia has said it will continue to deliver uninterrupted natural gas supplies to world markets. Although EU or U.S. sanctions on Russian gas imports are seen as unlikely, damage to pipelines or Russia stopping gas transit through Ukraine could happen, analysts said, and fully replacing Russian gas to the EU would not be achievable in the short term...

Data from the U.S. Geological Survey (USGS) shows Russia produced 7,600 tonnes of cobalt last year, more than 4% of the global total. Russia was the second largest producer, far behind the Democratic Republic of Congo, which produced 120,000 tonnes. Nornickel (GMKN.MM) is the largest producer in Russia, selling 5,000 tonnes in 2021. Nornickel sells most of its output to Europe.

Russia produced 920,000 tonnes of refined copper last year, about 3.5% of the world total, according to USGS, of which Nornickel produced 406,841 tonnes. Asia and Europe are the main export markets.

Nornickel is the world's top producer of refined nickel. It produced 193,006 tonnes in 2021 or about 7% of global mine production estimated at 2.7 million tonnes. It sells to global industrial consumers under long-term contracts...