2006 Minerals Yearbook

ESTONIA, LATVIA, AND LITHUANIA
U.S. Department of the Interior U.S. Geological Survey

November 2009

The Mineral Industries of Estonia, Latvia, and Lithuania

By Richard M. Levine

Estonia
In 2006, Estonia continued its economic expansion with the gross domestic product (GDP) increasing by 9.8% compared with that of 2005 (U.S. Department of State, 2007). Estonias mining industry was primarily engaged in extracting oil shale, peat, and industrial minerals, which included clays, limestone, and sand and gravel. The AS Silmet plant in northeastern Estonia was one of the leading rare metals and rare-earth metal producers in Europe. Silmet employed about 550 people. The plant included a factory for rare-earth metals separation, a factory for rare metals production, and a metallurgical factory. The factory for rare-earth metals separation produced such products as fluorides, hydroxides, oxides, carbonates, and solutions, as well as liquid nitric fertilizers. The factory for rare metals produced rare metals, hydroxides, oxides, and ammonium bifluoride. The metallurgical factory produced metallic products, which included niobium and tantalum chips, metallic powders and hydrides, and rare-earth metal products, which included neodymium metal ingots, neodymium ferroboron alloys, and mischmetal. About 99% of the raw materials used in production at Silmet were imported and 99% of the products sold were exported (AS Silmet, 2008). Estonia met more than 90% of its electricity needs with locally mined oil shale. The country imported all its natural gas and petroleum, which equaled about 30% of its total energy consumption, from Russia. Alternative energy sources, which included biomass, peat, and wood, made up about 9% of primary energy production. An undersea electricity cable commissioned in December 2006 allowed Estonia to export electricity to Finland (U.S. Department of State, 2007). Estonia had 64 ports along its coast, 31 of which handled commercial shipping and were open to vessels from other countries. Oil refinery products from Russia made up more than 50% of the cargo handled at the countrys ports. The Port of Tallinn was the countrys largest port in terms of freight handled. In the area of mineral shipments, Muuga Harbor, which was the main cargo handling harbor for the Port of Tallinn, handled crude oil and petroleum refinery products. Paldiski South Harbor of the Port of Tallinn handled scrap metal, Paljassaare Harbor of the Port of Tallinn handled petroleum refinery products and coal, Kunda Port handled cement, Sillame Port handled metals and petroleum refinery products, and AS Parnu Sadam Port handled peat (Enterprise Estonia, 2008). Production Silmet, which was Estonias main metal-producing enterprise, annually produced up to 3,000 metric tons (t) of rare-earth products and 700t of rare metal products (AS Silmet, 2008). Silmet was reportedly one of the worlds leading producers of
Estonia, Latvia, and Lithuania2006
niobium metal chips (Sillame, 2007). Estonia was the leading producer of oil shale in Europe and had been mining high-grade marine oil shale (kukersite of Ordovician age) for many years. In 2006, more than 14 million metric tons (Mt) of oil shale was mined from several underground and open pit mines (table 1). About 85% of the oil shale was burned as fuel in several large electric powerplants in northeastern Estonia. The remainder was retorted for shale oil, which is used in the manufacture of fuels and petrochemicals (Dyni and Johnson, 2006). Oil shale production decreased by about 3% in 2006 compared with that of 2005. Cement production increased in 2006 in line with the countrys economic growth; production data for other construction materials was lacking for 2006, although annual data had been reported in the past. Structure of the Mineral Industry Most of Estonias mineral production was privately owned. Silmet was privatized in 1997 (AS Silmet, 2008). In 2005, the Estonian Silmet Group sold its majority holding in Silmet to Zimal SA of Switzerland, which controlled the Revda loparite mine (located in Russia) and the Solikamsk magnesium works (also located in Russia) through the Russian holding company Mineral Group (Estonian Economy, 2006). Oil shale production was under the control of Eesti Energia, which was a state-owned company engaged in the production, sale, and transmission of electric power. The oil shale, which was extracted from mines owned by Eesti Energia, was the companys main raw material for energy production (Eesti Energia, 2008). Oil shale production was conducted by Eesti Plevkivi [Estonian Oil Shale Company], which was a subsidiary of Eesti Energia (Oil Shale Symposium 2009). References Cited

AS Silmet, 2008, Overview: AS Silmet. (Accessed December 10, 2008, at http://www.silmet.ee/default.aspx?m1=48&m2=51&lang=1.) Dyni, J.R., and Johnson, R.C., 2006, Will oil shale be a major player?: AAPG Explorer, May. (Accessed December 7, 2008, at http://www.aapg.org/ explorer/divisions/2006/05emd.cfm.) Eesti Energia, 2008, About us: Eesti Energia. (Accessed December 7, 2008, http://www.energia.ee/index.php?id=1&L=1.) Enterprise Estonia, 2008, Transportation: Estonian Economy, June. (Accessed December 8, 2008, at http://www.investinestonia.com/index.php?option= displaypage&Itemid=111&op=page&SubMenu=.) Estonian Economy, 2006, Industry: Estonian Economy, January. (Accessed December 10, 2008, at https://www.static.vm.ee/static/Failid/101/ Economy-Jan2006.pdf.) Oil Shale Symposium 2009, 2008, Field trips: Oilshalesymposium.com. (Accessed December 11, 2008, at http://www.oilshalesymposium.com/ index.php?id=13.) Sillame, 2007, Business in Sillame: Sillame, May 3. (Accessed December 10, 2008, at http://www.sillamae.ee/index.php?page=366&&PHPS ESSID=ab93a1f73565f1eda6a3fb789d2d146e.) 10.1
U.S. Department of State, 2007, Estonia: U.S. Department of State background note, October. (Accessed December 8, 2008, at http://www.state.gov/r/pa/ei/ bgn/5377.htm.)

References Cited

Riga Freeport Authority, 2008, Freeport of Riga in facts and figures, 2008, Riga Freeport Authority. (Accessed November 26, 2008, at http://www.freeportofriga.lv/eng/fakti.asp.) Ventspils Freeport Authority, 2008, Ventspils Freeport: Ventspils Freeport Authority. (Accessed November 26, 2008, at http://www.portofventspils.lv/?lang=EN&menu=13.) Liepajas Metallurgs, 2007, Quarterly report for the first nine months of the year 2007: Liepajas Metallurgs. (Accessed November 26, 2008, at http://www.baltic.omxnordicexchange.com/upload/ reports/lme/2007-q3_en_uni_00_ias.pdf.) U.S. Central Intelligence Agency, 2008, Latvia, in World factbook 2008: U.S. Central Intelligence Agency. (Accessed November 26, 2008, at https://www.cia.gov/library/publications/the-world-factbook/geos/lg.html.)

Latvia

Latvia had the Baltic states only steel mill. Other mineral commodity production was confined to industrial minerals used in construction, peat extraction, and production of a small amount of natural gas. In 2006, the countrys GDP increased by 11.9% compared with that of 2005 (U.S. Central Intelligence Agency, 2008). Latvias major role in the world mineral economy was as a transshipper of mineral products. The countrys three main ports are Liepaja, Riga, and Ventspils, all of which mostly transited cargoes to and from the Commonwealth of Independent States (CIS) countries. In terms of the volume of transshipments, Ventspils was the largest port in Latvia as well as on the Baltic Sea. Ventspils handled more than 25 Mt of cargo in 2006, which included crude oil, petroleum products, and potash. Ventspils Nafta Terminal LTD was the Baltic Sea regions leading oil and petroleum product transshipment terminal. Crude oil and petroleum products are received by pipeline and railways. The tank farm capacity of the enterprise exceeded 1 million cubic meters, which enabled the clients of the terminal to store products in case there was no immediate transshipment possibility owing to conditions (such as weather) or in expectation of a better market price. The terminal also included among its services chemical analysis of oil and petroleum products in the company laboratory (Ventspils Freeport Authority, 2008). The Freeport of Riga, which is the countrys second largest port, handled such cargo as mineral fertilizers, petroleum products, and various metals. About 80% of the products handled were transshipped to and from the CIS (Riga Freeport Authority, 2008). The Port of Liepaja handles one-third less cargo than the Freeport of Riga. Its mineral product cargo is mainly metals and mineral fertilizers. Production The growth in Latvias economy appeared to spur an increase in the production of mineral commodities used in infrastructure development, although information on the production of cement and steel was not reported for 2006. Data on mineral production are provided in table 1. Structure of the Mineral Industry The Ports of Riga and Ventspils operated as freeports and the Port of Liepaja was part of the Liepaja Specialized Economic Zone. The countrys only steel mill, Liepajas Metalurg, was the countrys main mineral industry enterprise; it was a public jointstock company (Liepajas Metallurgs, 2007).

Lithuania

Lithuanias main mineral commodity production enterprises were its nitrogen fertilizer enterprise in Jonava and its petroleum refinery near Mazeikai. The country also produced industrial mineral products, which included cement, clays, and sand and gravel, and mineral fuels, which included peat and crude petroleum. Lithuania had the Baltic states only nuclear powerplant at Ignalina, which generated more than 85% of the electric power produced in Lithuania. The reactors at the plant, however, are of the RBMK-2 model, which is the model that was involved in the accident at the Chernobyl plant in Ukraine (Energy Daily, 2007). The countrys Port of Klaipeda was a major transshipment center for mineral products, and, in particular, fertilizers and crude oil and petroleum products. The completion of upgrades at the Butinge terminal at the Port of Klaipeda, which is connected to the Russian oil pipeline system, increased the countrys ability to export crude oil and petroleum refinery products from Russia (U.S. Energy Information Administration, 2006). Production In 2006, Lithuanias GDP grew at a rate of 7.5%, which stimulated production of construction materials used in building the countrys infrastructure. Most industrial minerals used in construction experienced an increase in output compared with that of 2005. Production of most fuels decreased somewhat in 2006, however, compared with that of 2005. In June, Russia cut off pipeline supplies to Lithuanias Mazeikiu Nafta refinery reportedly owing to technical problems caused by an accident on the pipeline that supplied the refinery. The accident took place shortly after the sale of the refinery to the Polish refiner PKN Orlen (Graham, 2006). The refinery then had to transport oil from Butingea distance of 90 kilometers (Interfax Central Europe News Agency, 2007). Additional data on mineral production are provided in table 1. Achema AB, a nitrogen fertilizer and chemical products manufacturer, was the countrys other major mineral production enterprise. Its production of fertilizers exceeded 2 Mt/yr and included compound and nitrogenous fertilizers (Achema AB, 2008a).
u.s. geologicAl survey minerals yearbook2006
Structure of the Mineral Industry Yukos International UK BV, a United Kingdom-based subsidiary of the Russian oil producer Yukos Oil, sold its Lithuanian refinery Mazeikiu Nafta to the Polish refiner PKN Orlen in December 2006. PKN Orlen was the leading oil refiner in Central Europe and was part-owned by the Polish Government. PKN Orlen owned a number of refineries and gas stations in the Czech Republic, Germany, and Poland. Mazeikiu Nafta, which was one of Lithuanias most important strategic assets, had been purchased by the Yukos Oil subsidiary in 2002. In December 2003,Yukos head office in Russia was presented with the first of several very large tax bills, which bankrupted Yukos within a year. The Russian state oil firm Rosneft purchased much of Yukos debt and demanded a say in any potential sale of Mazeikiu Nafta. Yukos UK subsidiary contested Rosnefts claim in a legal dispute that was decided in favor of the sale to PKN Orlen (Moldova.org, 2006). Achema AB, Lithuanias nitrogen fertilizer enterprise, was privatized in 1994; Achema AB employed more than 1,600 employees in 2006 (Achema AB, 2008b).

Achema AB, 2008a, About AB Achema: Achema AB. (Accessed December 9, 2008, at http://www.achema.lt/about.) Achema AB, 2008b, History: Achema AB. (Accessed December 9, 2008, at http://www.achema.lt/history.) Energy Daily, 2007, General Electric interested in Lithuania nuclear power plant project: Energy Daily, January 23. (Accessed December 10, 2008, at http://www.energy-daily.com/reports/General_Electric_Interested_In_ Lithuania_Nuclear_Power_Plant_Project_999.html.) Graham, Tod, 2006, Mazeikiu media frenzy, sale still up in smoke: The Baltic Times, November 1. (Accessed December 9, 2008. at http://www.baltictimes.com/ print_article/16738/.) Interfax Central Europe News Agency, 2007, Russian oil deliveries fundamental for Mazeikiu Nafta refineryLithuanian PM: Interfax Central Europe News Agency, April 23. 1 p. (Accessed December 8, 2008, at http://www.forum-ekonomiczne.pl/docs/Russian_oil_deliveries.pdf.) Moldova.org, 2006, Yukos sells troubled Lithuanian refinery to Polands Orlen: Moldova.org, December 14. (Accessed December 9, 2008, at http://economie.moldova.org/news/yukos-sells-troubled-lithuanian-refineryto-polands-orlen-21596-eng.html.) U.S. Energy Information Administration, 2006, Baltic Sea regional factsheet: U.S. Energy Information Administration, July. (Accessed December 8, 2008, at http://www.eia.doe.gov/emeu/cabs/Baltic/Oil.html.)
TABLE 1 ESTONIA, LATVIA, AND LITHUANIA: PRODUCTION OF MINERAL COMMODITIES1 (Metric tons unless otherwise specified) Country and commodity ESTONIA2 Cement: Clinker Portland, other Clays: For brick thousand cubic meters For cement do. Coal thousand metric tons Coke, electrode Dolomite: For building cubic meters For finishing do. For industry (technological limestone) do. Fuel oil Gravel, pebbles, shingle and flint cubic meters Lead, metal, secondary Lime Limestone: For building cubic meters For cement do. For industry (technological limestone) do. Natural gas, dry million cubic meters Nitrogen, N content of ammonia Oil shale thousand metric tons Peat do. For fuel do. Briquettes do. Rare-earth products Sand and gravel Silica sand, industrial Sulfur See footnotes at end of table.
169,800 465,900 149,200 19,000 12,401 30,000 NA NA NA 301,800 NA NA 32,000 NA 366,200 NA NA 38,700 12,400 1,128 3,000 2,033 22,500 NA
157,300 506,200 134,900 27,300 14,896 30,000 291,200 3,200 150,800 317,600 NA NA 31,000
113,100 614,600 136,600 31,600 13,989 35,600 323,400 1,300 171,900 338,500 NA 3,000 34,000
88,800 726,000 151,800 37,200 14,588 38,700 261,700 2,000 155,300 367,400 597,100 7,000 37,000
65,100 848,900 NA NA 14,188 40,000 NA NA NA 389,200 NA 9,000 39,700 NA NA NA 1,456 170,000 14,138 1,97 3,000 NA 38,000 NA

thousand cubic meters

1,255,000 372,200 62,500 NA 80,800 14,618 r 1,089 r 3,000 4,470 41,300 NA
1,547,000 430,500 93,900 NA 166,000 13,910 r 769 r 3,000 3,131 49,800 NA
1,922,000 335,100 r 86,300 NA 170,000 14,534 r 1,034 r 3,000 2,186 r 53,800 r NA
TABLE 1Continued ESTONIA, LATVIA, AND LITHUANIA: PRODUCTION OF MINERAL COMMODITIES1 (Metric tons unless otherwise specified) Country and commodity LATVIA 2006 280,000 e 586,607 3,824,965
Cement 260,397 295,205 283,647 280,000 Crushed rock NA NA NA 414,305 Gravel, pebbles, shingle and flint of a kind used for -3,070,709 2,094,017 2,817,287 concrete aggregates; for road or for railway and other ballast Gypsum 217,074 159,133 225,742 220,000 e Limestone 393,285 431,590 443,987 420,000 e Natural gas, dry million cubic meters NA NA NA NA Peat 1,484,970 1,076,142 823,938 829,865 r Sand and gravel 761,614 1,981,431 1,875,494 3,242,199 r e 50,000 50,000 50,000 50,000 Silica sand, industrial Steel, crude 507,194 545,626 553,684 550,000 e LITHUANIA Cement, portland, other 605,800 596,900 753,100 832,076 r Clays NA 240,800 228,100 289,500 Granules, chippings and powder of stones, excluding NA NA NA 4,316 marble Limestone 984,300 944,600 1,385,600 1,242,200 Marble granules, chippings and powder NA NA NA 666 Natural gas, dry million cubic meters NA NA NA NA Nitrogen, N content of ammonia 468,300 461,800 424,000 431,700 Peat 513,000 366,900 367,900 536,200 r Petroleum: Crude 433,700 382,800 301,900 216,634 r Refinery products 6,447,700 6,703,000 7,682,600 8,518,500 Sand and gravel: Construction sands NA NA NA 3,689,217 Gravel, pebbles, shingle and flint NA NA NA 3,345,185 58,300 r 46,500 r Silica sand, industrial 63,000 49,700 r e p r Estimated; estimated data are rounded to no more than three significant digits. Preliminary. Revised. NA Not available. -- Zero. 1 Table includes data available through November 30, 2007. 2 In addition to the commodities listed, Estonia produces niobium, sulfur, and tantalum, but available information is inadequate to derive estimates.