By Eugene Gerder
The Russian government has
publicised its intention to become the worlds largest
producer and exporter of rare earths over the next few years
and is investing up to Russian rouble (R) 145bn ($4.5bn*) in
the industry by 2020.
During the Soviet era, production
of rare earths in Russia reached 8,500 tpa. Production took
place in more than 30 regions of the USSR.
However, since the collapse of the
USSR in 1990 and the number of political and economic crises in
the country, the production of rare earths in Russia has almost
stopped, while Russia became a net importer of them. Since the
beginning of the millennium, the situation in the industry has
started to improve, which has resulted in the resumption of
production of rare earths in Russia.
According to Denis Manturov,
Russias Minister of Industry and Trade, the planned
investments will allow the country to fully provide its local
needs in rare earths and will mean there will no longer be any
need for imports.
He also added that Russia has
perfect conditions for the development of rare earths
production, taking into account that Russia currently remains
the worlds second largest country in terms of rare earths
reserves, which are estimated at 19m tonnes (17% of the global
market). Overall it has at least 14 discovered rare earths
fields, the majority of which are located in the northern
regions of the country, and in particular the Kola Peninsula,
Krasnoyarsk region and Murmansk.
According to analysts at the
Russian Ministry of Industry and Trade, implementation of the
announced projects in the field of rare earths is an acute need
According to the Ministry, Russia
currently accounts for about 2% of the worlds production
of rare earths and without the implementation of new projects
the countrys share in the rare earths world output of
rare earths will fall below 1.5% in the coming years.
Analysts at the Ministry also
predict that by 2020 the demand for rare earth metals in Russia
will reach 5,000-7,000 tpa in a bearish scenario. An optimistic
scenario gives a demand scenario of 13,000 tonnes.
At the initial stage particular
attention will be paid for to the development of the Tomtorskoe
rare earths field. The field is located in Yakutia and holds
reserves of 154m tonnes ore at a grade of 6.71% niobium oxide,
0.6% yttrium, 0.048% scandium and 9.53% terbium**.
The first stage of the project will
involve the production of ore, while the second the production
of individual oxides. The third stage will involve the
production of a final product.
The project will also involve the
establishment of a hydrometallurgical plant, the location of
which will be announced later, as well as deep processing of
radioactive monazite sand, containing about 40,000 tonnes rare
earths in the city of Krasnoufimsk (Ekaterinburg region).
According to state plans, the
project will be carried out by the already established joint
venture (JV) between state-owned enterprise Rostec, and IST
Group, one of Russias largest investment and holding
According to Manturov, the newly
established JV should receive a licence for the fields
development by the end of the current year and expects to begin
production in the middle of 2015.
In addition to Yakutia, similar
projects will be implemented in Murmansk, a port city, located
in northwest Russia, which is expected to become a centre for
Russias rare earths production in the coming years.
Murmansk Governor Marina Kovtun
said the region has perfect conditions for it, taking into
account that it accounts for 75% of total Russian reserves of
According to state plans, the
majority of rare earths future production from the Murmansk
region will be derived from the Khibiny-Lovozero.
Details of other projects are
currently not disclosed.
It is planned that implementation
of the majority of projects in the Russian rare earths industry
will take place on the basis of public-private partnership.
According to Andrew Korobov, CEO of
PT Global Resources, a Rostec subsidiary which will focus on
the direct implementation of the rare earths projects, by 2016
the government, together with private investors, plans to
create up to 3,700 new jobs in the industry and to introduce up
to 32 patents in the field of rare earths.
R&D into rare
The government has also set out
that it plans to participate in the project through the funding
of R&D activities in rare earths, as well as designing a
single regulatory framework for the industry by training
personnel, as well as the provision of subsidies for the
disposal of radioactive waste.
In the case of R&D projects,
the government has already allocated a $5m research fund for
Urals Federal University to be used specifically for
investigating rare earths and scandium extraction from uranium
At the same time, it plans to
resume geologic exploration in rare earths (which stopped in
1990), as well as training experts in this area. The latter is
also expected to be achieved through the establishment of a
number of high schools throughout the country and the opening
of special departments in Russias leading universities,
which will focus on the training of specialists in the field of
During Soviet times, the USSR had
about five high schools, which specialised in the training of
such experts, however, after the collapse of the country, the
majority of them were closed.
According to state plans, the
successful implementation of the project will lead to total
sales of finished domestic production of R50bn ($1.2bn) by
2020. Main end markets are expected to be seen in wind energy,
as well as automotive, aerospace and electronics
It is planned that, in addition to
Rostec and IST Group, implementation of rare earths projects in
Russia will involve the participation of the countrys
leading fertiliser producers such as Akron, Uralchem and
Phosagro, as rare earths can be a by-product in the production
of fertilisers. Moreover, there is also a possibility of
participation of Russian nuclear giant Rosatom.
*Conversion made October
**These figures have not been verified by IM but are
widely quoted. The Tb figure, in particular, looks very high -