Is There Any Russian Natural Resource Which is Not a Strategic Asset Which Only a Russian Investor Should Operate?

Implications: The Russian State has regained its self-esteem under the rule of Vladimir Putin, and the result is that his approval ratings within Russia make him invincible there. Putin does not believe in free market capitalism or the global economy when it comes to the control of domestic natural resources.   Russia's default on its sovereign debt, ten years ago, and its rejection of foreign ownership or control of its natural resources today make its state-planned economic approach to natural resource development make investment by foreigners in that sector foolish.

Analysis: Russia is the world's largest producer of oil; it pumps 10 million barrels a day. Russia's domestic consumption of oil is about 1/3 of that. Therefore Russia generates daily revenues of 1/2 billion dollars a day just on its exports of oil!

The Russian steel industry is booming and going global. Although there are several 'private' steel companies in Russia they operate under the agenda of developing Russian natural resources solely for the benefit of the Russian people and state. Thus the fastest growing steel company in the US is Russia's Severstal, which is building now two new mills in the US with a total new production of nearly 6 millions tons a year.

Russian steel companies are not like Chinese steel companies substituting volume for quality. Severstal operating in Dearborn, Michigan, home of the Ford Motor Company, has been providing 'automotive quality' steel to both Ford and GM and making profits since nearly the first day that it took control of the failing former Rouge Steel perviously operated by a Japanese firm, unprofitably, and prior to that operated unprofitably by the Ford Motor Company.

Severstal is at this moment bidding on a new iron ore strike in the American west. so that it can vertically integrate its American operations. It already owns and operates a coking coal operation based in Wyoming.

The idea that ArcelorMittal would have been allowed to do the same thing in Russia that Severstal is doing in the USA was an egotistical dream of Lakshmi Mittal.

It's becoming clear that Russian sovereign wealth funds will be available to Russian companies like Severstal so that Russian natural resources can be conserved.

State control of natural resources is the model in former and present socialist economies. Russia stood a chance of becoming another Africa where foreign resource-strippers could operate, but that is not to be under Vladimir Putin, and i will not be surprised to see the Chinese juggernaut in Africa challenged by Russian reentry into that arena.

The American free market approach to acquiring supplies of natural resources is rapidly dwindling in influence as the dollar loses its place as a reserve currency in which resources are priced. In addition mindless 'green thinking' has closed down the American mining industry leaving America as just another buyer of natural resources and one whose companies are no longer leading the world.

Lakshmi Mittal may be the wealthiest man in the UK, and the owner of the world's largest steel maker for the moment, but he is rapidly being squeezed out of access to the critical natural resources needed to make his steel empire competitive.