Russian Forestry and Wood Supply Operations Analysis

NORTH-WESTERN FEDERAL DISTRICT KOMI REPUBLIC Komi Republic: The Land of Oil Derricks Life in the Komi Republic is determined by the production and transport of energy resources Large-scale forest enterprises of Komi Republic ARKHANGELSK OBLAST Mezen' BARENTS SEA Knyazh-Pogost Fiberboard Factory Lesozavod No. 1,000 Zheshart Plywood Plant, ZAO LesTrans, OOO Luzales, OOO Mondi Syktyvkar JSC Norwood SM, OOO SevLesPil, 000 Sewer, MF, O00 SLDK Severny Les, 000 Syktyvkar Integrated Industrial Plant, OOO Syktyvkar Plywood Factory, 000 Syktyvkar Tissue Group, OOO Zheshrat Settlement Vym' NENETS AUTONOMOUS OKRUG Naryan-Mar PECHORA P-25 Ukhta Izhma Ertom • Usogorsk Emva Kazluk Settlement O Kotlas Vychegda Mikun' P-26 SYKTYVKAR Ust'-Nem P-176 Obyachevo Settlement Kazhym Usinsk Pechora Troitsko-Pechorsk Settlement PERM KRAI SLK, OOO Azimut, OOO PechoraEnergoResurs, OOO KIROV OBLAST Solikamsk KIROVO 84 #6 (2015) RUSSIAN FORESTRY Inta Usa Vorkuta Salekhard YAMAL-NENETS AUTONOMOUS OKRUG Sosva KHANTY-MANSY AUTONOMOUS OKRUG SVERDLOVSK OBLAST Nyagan The Komi Republic is a part of the North-Western Federal District of the Russian Federation. About one-third of the region belongs to the Extreme North and the capital, Syktyvkar, is where executive and legislative governmental institutions, and the Supreme Court of the Komi Republic, are located. STATISTICS The Komi Republic totals 416,800 km² or about 2.4 per cent of Russia. At its longest extent, from the south-west to the north-east, the region extends 1,275 km. The republic has no common borders with neighboring countries. The region's largest cities (apart from Syktyvkar) are Vorkuta, Ukhta, Inta and Usinsk. According to the Russian state statistics agency Goskomstat, the population of the Republic in 2015 was 864,238, with a population density of slightly more than 2 persons per km²: in rural districts it is half that figure. Most of the population is concentrated in cities. GEOGRAPHY AND CLIMATE Geographically, the Komi Republic is in the extreme north-east of European Russia. The terrain is diverse; there are lowlands, uplands, and access to the western slopes of the Ural Mountains. The climate is mainly temperate continental, with a long winter and short and cool summer. According to long-term data, the average temperature of January is -20 °C in the north of the republic and -17 °C in its south, although in winter, the temperature may drop to -60 °C in some parts of the region. The average temperature in July is +11 °C in the north and +17 °C in the south. A feature of the climate in the Komi Republic is frequent incursions of cold air masses from the Arctic, and of warm air from the Atlantic coast. RESOURCES The region produces oil, coal, natural gas, bauxite, titanium, and manganese. Fuel/energy resources are important in the Komi Republic, due to the presence of a large part of the Timan-Pechora oil and gas field, the large Pechora coal basin, and three oil shale basins. The scope of the reserves and production of minerals in the republic makes it the main fuel base for Russia's European North. According to official data, deposits prospected in the republic contain about 50 per cent of all Russia's titanium reserves and at least 50 per cent of its bauxite reserves, as well as about 80 per cent of its reserves of quartz. Against this background, the oil and gas reserves are modest: about 3 per cent and 4.5 per cent, respectively. The Pechora coal basin is Russia's second largest in terms of coal reserves, and there is a large, long- term raw material base for the development of coal-based chemistry, energy sector, and methane production. Peat resources include 4,840 deposits, and commercial prospected reserves are estimated at 452.9 million tons. The Komi administration has certain region development plans related to the deposits of deficit minerals; the republic has proven reserves of manganese and chromite ores. The total booked reserves of placer and primary gold are about 50 tons, and estimated gold resources, over 200 tons. Another resource in the region is salt. There is a large basin of rock salt and potassium-magnesium salts in the south-east of the republic. In the Upper Pechora deposit the measured reserves are over 13 billion tons of common salt, over 165 million tons of magnesium salt, and over 122 million tons of potassium salt. TRANSPORT The transport infrastructure in the republic comprises water, air, road, railway, and pipeline transport. According to official data from the region's government, the length of railways is 2,300 km, navigable waterways total 4,100 km, and motor roads total 11,800 km. The density of the public railway network is 4,100 km per 1,000 km². The length of the basic Kotlas- Vorkuta railway line is 1,700 km. is The BelkomUr project (White Sea-Komi-Urals) will be a new sector of the regional railway, which forms the basis of the Integrated Program of Industrial and Infrastructural Development of the Komi Republic, the Perm Territory, and the Arkhangelsk Oblast. The commissioning of this trunk line will enable, in particular, communication between the seaport of Arkhangelsk and extractive regions of the Extreme North. The region's authorities expect that given sufficient funding, the line's construction will be completed by the end of 2018. The total cost of the project is about 180 billion rubles, with government funding not exceeding 50 billion rubles, the rest being borrowed funds and investment under a public-private partnership. "The BelkomUr may give a push to the development of projects worth nearly a trillion rubles," believes the republic's head Vyacheslav Gaizer. "About 40 per cent of the industrial wood in European Russia is in the Komi Republic. Our allowable cut is 32 million m3, but we harvest several times less than this. When the Belkom Ur is commissioned, we will be able to utilize up to 50 per cent of the merchantable cut, which will enable building a timber processing complex on a scale similar to Syktyvkar LPK." Regular air traffic in the Komi Republic is supported by seven airports. As well as the region's largest cities, Pechora and Ust-Tsilma can also receive air transport. Currently, the government is taking active measures to develop internal airlines. Oil transport in the Komi Republic is represented by the Kharyaga-Usa interfield oil pipeline system and the Usa-Ukhta and Ukhta- Yaroslavl trunk oil lines. Trunk gas transport in the Komi Republic consists of four stages of trunk gas lines that are 7,300 km long. The republic's trunk gas lines ensure delivery of natural gas to Russia's Unified Gas Supply System in at a volume of more than 100,000 tons/year. Since 2007, a 2500 km new generation gas transport system has been under construction, part of which will extend across the Komi Republic to transport Yamal gas to the Unified Gas Supply System. Construction is planned to be completed by 2030. THE ECONOMY Impressive reserves of minerals and a ramified system of their production and transportation set the pace for the entire economy of the region. The development of oil refining in the republic is justified by the vast sales market for oil products. In addition, a sizeable part of the GRP is represented by timber processing / woodworking, and the pulp and paper industry. The proportion of machine-building in the region's industrial output does not exceed 1 per cent, and the application of these products is again determined by the region's specializations: the oil, coal and gas industry, the timber sector, and construction. FOREST RESOURCES The total area of the forests controlled by the Forest Committee of the Komi Republic was 36,264,900 hectares (87.2 per cent of the republic) as of January 1, 2014. Forests not included in the forest resources occupy 2,656,700 ha. The forest coverage indicator differs in different districts of the republic, and depends on physico-geographic, climatic, and soil conditions. Average forest coverage in the republic is 79.1 per cent. Over 60 per cent of the total area of the republic's forest resources and other categories of forests are classified as commercial forests. The majority of the forested land (53 per cent) is covered by spruce stands that are widespread in all districts and grow nearly on all soils in the republic except for peat bogs and dry sandy soils. Pine stands occupy one quarter of the forested land (25.2 per cent). Stands with cedar, larch and fir predominating cover a small area (1.1 per cent). Birch accounts for 16.6 per cent of forested lands. Clear felling and wildfires were the main factors that produced the occurrence of such birch stands on large areas. Aspen woods occur in all forest ranges and prevail in the southern part of the republic. All aspen woods are secondary forests. They appeared as a result of spruce forest felling and fire clearing of felling sites. The total timber reserve in the republic's forests (forest resource lands) as of January 1, 2014 was 2838.47 million m³, of which softwood timber accounted for 2349.82 million m³ (82.8 per cent), and hardwood timber accounted for 428.02 million m³ (17.2 per cent). In the total reserve of stands, spruce stands account for 56.3 per cent, pine stands for 25.1 per cent, other softwood (fir, larch and cedar) for 1.4 per cent, birch for 13.7 per cent, aspen for 3.4 per cent, and other species for 0.1 per cent. In the total reserve of mature and old growth stands, softwood species account for 85.3 per cent, of which spruce accounts for 67.2 per cent, pine for 16.5 per cent, fir for 0.7 per cent, larch for 0.8 per cent, and cedar for 0.1 per cent; hardwood species RUSSIAN #6 (2015) 85 FORESTRY