The European Commission proposed banning new European investments in the Russian mining sector in its ninth set of sanctions against Russia to be submitted to member states, media reported on Tuesday, citing people familiar with the matter.
The EU envisages member states discussing the latest round of sanctions in the coming days and agreeing by the end of next week. If approved, the measure would be the first time the EU has directly targeted Russia's metals industry. In Russia, a producer of commodities such as gold, iron ore, uranium and phosphate, a quarter of foreign investment is concentrated in mining, according to the OECD.
Commodity-trading giant Glencore, for example, owns nearly 10% of En+, the controlling shareholder of Rusal; Blackrock, Vanguard and UBS also have stakes in big mining companies such as Nornickel and Evraz.
The scope of the ban on Russian mining investment is still being discussed, according to people familiar with the matter, with specific minerals likely to be exempted. Along with crude oil, Russia is also a big exporter of many commodities, such as titanium and palladium.
In addition to the mining ban, the latest EU sanctions will also include restrictions on the export of some civilian technology that politicians in Brussels believe is being used by Russia in the military sector. Three other banks, 180 individuals, media and market research companies will also be subject to the sanctions.
There are signs that the EU is adding to its sanctions list things that the Russian military has not traditionally used. According to Denis Redonnet, Director-General of the European Commission's trade department, the EU's current ban already covers a third of pre-conflict exports to Russia worth 99 billion euros.
In a series of previous sanctions imposed by the European Union and Western countries, the main targets were key sectors such as banks, the military industry, oil and gas, and hundreds of government officials. Very characteristic of the EU, past discussions have also involved rounds of horse-trading among member states, and sanctions have often been waived in order to win unanimous approval.
For example, Hungary forced the exclusion of pipeline oil from the current round of the Russian oil ban, and Belgium blocked EU sanctions on Russian diamonds because they could affect its own industry.
