HPQ production in Russia gains momentum

By IM Staff
Published: Thursday, 22 October 2015

Russian Quartz LLC is ramping up its Kyshtym project in the southern Urals to produce 10,000 tpa high purity quartz concentrates from the beginning of next year. In cooperation with Japan’s Sumitomo Corp., the company hopes to turn the previously uneconomic project into a major supplier to Asia’s high-tech industries, Vladislav Vorotnikov, IM Correspondent, discovers.

By the end of this year, Russian Quartz LLC expects to have ramped up its quartz mining project in Kyshtym, in Chelyabinsk Oblast, to a production capacity of 10,000 tpa high-purity quartz (HPQ) concentrates.

Located on the eastern slopes of the southern Ural Mountains, the project is being run by Russian Quartz’s subsidiary enterprise, Kyshtym Mining. Once it reaches its maximum output, with actual production slated for early next year, Kyshtym will account for around 15% of the global HPQ market, according to Russian Quartz. 


Although it has suffered a number of setbacks over 
the last decade, the overriding trend for solar panel 
production in Asia is upwards, creating demand for HPQ. 
(Source: Pete Jelliffe)

Kyshtym has been in development since 2011 and to date has recieved a total investment
of Russian rouble (R) 2.3bn ($37.6m* – although this figure is closer to $80m averaged over 2011-2015, taking into account the recent collapse in the value of the rouble). 

In 2013, Japan’s Sumitomo Corp. became one of the main shareholders in the project. This was a significant deal for Russian Quartz, since Sumitomo’s buy-in gives the company stable access to HPQ markets in Asia, where the mineral is used in various high-tech applications, such as fused quartz crucibles for making silicon metal ingots, photovoltaics for solar panels, semiconductors and waveguides for 4G/5G communications technology. 

Sumitomo’s participation has also brought modern processing expertise to the Russian project, which is particularly important for Kyshtym’s development because Russian Quartz’s existing technology was out of date and had suffered from a lack of investment. 


Quartz ore from the Kyshtym deposit is claimed to
be among the purest in the world.  (Source: Russian Quartz)

Quality quartz

According to published geological analysis, impurities in the quartz deposit at Kyshtym, which typically include aluminum, sodium, potassium or calcium, are low in number and concentration. After processing, its impurity levels are just 12 parts per million (ppm), Russian Quartz claims. 

Such high quality deposits are not common. Apart from Russia, equivalently pure ore bodies are found in the US and Norway, but are otherwise scarce. 

Russian Quartz estimates that the size of the global market for HPQ is 65,000 tpa, with an average growth rate of 3-5% per year. The company is gearing up to compete with North America-based Unimin, which is owned by Belgium’s Sibelco, and The Quartz Corp., which has operations in the US and Norway and is owned by French industrial minerals giant Imerys SA and Norway’s Norsk Mineral AS.

"Right now, the main supplier of HPQ concentrate [on the global market] is Unimin. Customers are [interested in finding] additional sources of quartz to 'hedge’ their supply risk, and we can substitute a part of the volume they consume," says Pavel Polishchuk, chairman of Kyshtym Mining’s board of directors.

A former producer of HPQ during the Soviet era, operations at Kyshtym were suspended in the mid-1990s in response to the weak economic climate in Russia. Quartz mining was revived at the site in 2005, but only in small quantities.

Since 2012, Kyshtym Mining has been producing around 6,000 tpa HPQ concentrates. Although the present ramp up is designed to take this figure to 10,000 tpa, the company’s management has not ruled out the possibility of further capacity increases from 2016. Global demand is expected to continue to grow, thanks to the expansion of the solar energy market in regions like China and Southeast Asia, the company notes. "For a number of years, the facility had only old equipment and production was unstable. But, through the production of small batches, we enabled consumers to try our quartz and assess its quality," Polishchuk explains.

"There are millions of tonnes of quartz produced in the world each year, mostly for the manufacture of window glass or various fillers for the construction industry," says Leonid Kuzmin, CEO of Russian Quartz. "The quartz in our deposit has nothing to do with these products. It can be purified to such an extent that it can be used in the production of high-tech products, including solar panels."


Russian Quartz is keeping the technology for producing 
its HPQ, which it has developed in cooperation with 
Japan’s Sumitomo Corp., a closely guarded secret. (Source: Russian Quartz )

The company’s own analysis of ore from the Kyshtym deposit describes the material as granular in texture. The length of the deposit in the submeridional direction is 15km and its width spans between 1km and 3km. The total area of the site is 20km2 and comprises 67 identified quartz veins running to depths of 30-90 metres. According to Russian Quartz’s estimates, at targeted production rates, the size of the deposit gives the project a mine life of around 50 years.

Russian Quartz acknowledges that the Russian market for HPQ is small, limited to a handful of manufacturers of lighting products, and it expects to sell just 5-6% of its output to domestic companies. 

HPQ markets

The rest will be exported, chiefly to companies in China and Southeast Asia. "This region is most attractive because [much of the world’s] microelectronics and solar energy capacities are located there," explains Kuzmin. "In Europe, there are very few manufacturers left. We plan to deliver 60% of our production to China, 20% to Japan and 20% to Europe, primarily to Germany." 

Kuzmin said he could not disclose details of the technology his company is planning to use to extract and process the quartz, as the information is commercially sensitive, adding that the "closed" nature of the high-tech industry would partly determine Kyshtym’s marketing strategy. 

"We are not a public company and our customers are rather closed as well," he said. "So we do not need to make any serious efforts to enter the market, in the usual sense of these words. For us, it is more important, to implement a quality system that complies with ISO [International Organization for Standardization] requirements and with the standards of the consumer."

According to the opinion of some industry experts in Russia, the viability of the Kyshtym project would be questionable without the participation of the Sumitomo, owing to the lack of funding and technology available within the company.


Sumitomo is also providing much needed training to the Russian personnel tasked with developing the project, which according to Russian Quartz, is not available in Russian institutions. "We train specialists here in the [Chelyabinsk] and then send them for further training abroad," says Kuzmin. "[Foreign institutions] are better at preparing personnel from technical and engineering standpoints and in terms of the standards expected by our consumers."

"We have a rather good situation, in that our company still has specialists trained during the Soviet era in clearly defined technological disciplines, and the younger members of staff are taking over their experience," Kuzmin said.

Anatoly Chubais, chairman of the board at Rusnano, a government-backed private equity firm which aims to fund the commercialisation of nanotechnologies in Russia and is a major shareholder in Russian Quartz, said that the mining company has made significant progress in developing production process technology, thanks to Sumitomo’s participation.


HPQ is used in the semiconductor industry to produce 
crucibles, quartz glass products and silicon metal, which 
is the base for semiconductor wafers. The main centres 
of semiconductor manufacturing are Japan, South Korea, 
Germany and the US state of California. (Source: Wikimedia

"We have been negotiating with Sumitomo for about a year and a half. The Japanese have an understanding of the global market and are very important for us [because of their] quartz processing technology, including for [use in] microelectronic and nanotechnologies," he said. "They not only brought money, but brought 'smart’ money," he added.

Improving the quality of the final products is one of the most important requirements for accessing the high-tech markets for HPQ.

"In terms of constant product improvement, the world does not stand still and the quality of the material should be getting better and better," notes Kuzmin. "A team of specialists have been engaged in precisely this task, as well as reducing costs." Even though he stresses that the research team employed on the Kyshtym project have "the most modern laboratory" at their disposal, he admits that the company’s US-based competitors are a long way ahead of Russian Quartz.

"They have been on this path for a long time, and we are just getting started and are still a growing company. The quality of products is a matter of investment in the further steps of processing. At the moment, we believe that we need to move steadily. We are number two in terms of quality, [which] meets the demand of 90% of customers." He says that, within the next year or so, Russian Quartz will be in a position to compete with market leader Unimin on quality.

Future for Russian Quartz


The Kyshtym mine in Russia has been producing 
small volumes of quartz on an irregular basis for the
 last decade but is set to ramp up to 10,000 tpa capacity 
for the start of 2016. (Source: Russian Quartz)

Russian Quartz expects its Kyshtym venture to turn an annual profit of around R400m ($700,000), but due to the ongoing devaluation of the Russian currency against the US dollar, this figure could almost double. 

The company expects that all the technical equipment required at the facility should be installed by the end of 2015 and the project will be in a position to produce 10,000 tpa HPQ by the start of 2016.

At present, however, the company is not prepared to disclose the details of its beneficiation plans, offering only general targets for volume and revenue which it says will be increased in the coming years.According to Kuzmin, the project’s production capacity could grow from as early as next year, particularly if the company succeeds in making commercially significant products out of material formerly considered as waste.

Other quartz developments in Russia

JSC Polar Quartz

Moscow-based JSC Polar Quartz is reported to be developing the Neroika deposit on the eastern slope of the sub-polar (northern) Urals.

Like Kyshtym, the Polar Quartz project languished for a number of years since development activities ceased in the 1990s.


Russian Quartz’s Kyshtym HPQ project is based on 
the eastern slopes of the southern Urals in Chelyabinsk 
Oblast. (Source: Russian Quartz)

According to various sources, Rusnano and Khanty-Mansiysk Autonomous Okrug signed a shareholders’ agreement for the Polar Quartz project in 2011. Press reports released in March 2014 however suggested that Rusnano terminated its agreement with Polar Quartz after the company failed to meet certain objectives laid out in the deal.

The current status of the project has not been confirmed.

Kozhim RDP

According to Kozhim’s website, the company began its activities in 1936 as the Polar Ural Geological Expedition, a part of Trust No. 13 of Ministry of Defence of USSR to explore for quartz deposits in the Polar Urals.

After discovering quartz in 1948, the company outlined and started developing the Zhelannoe deposit.

From 1955-1977, the deposit was exploited using open cast mining techniques. After 1969, work at the site moved to underground mining. In 1978, Kozhim began producing and selling quartz for the speciality glass industry and since the 1990s, the mine has continued to produce material for various markets.

The last official update from Kozhim was published in 2009 and its present production status is unclear.

*Conversions made October 2015