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11th September 2020
Russia plans an investment of USD 1.5 billion in rare earth minerals, critical to the defense, telecommunications, and renewable energy sectors, as it strives to become the biggest producer after China by 2030, said a top government official.
Russia has reserves of 12 million tonnes of lanthanides or 10% of the global total, the world's fourth-largest reserves of the group of 17 metals with unique electronic and magnetic properties that are vital to most modern electronic products and its government are willing to back any foreign investment.
Alexei Besprozvannykh, Russia’s deputy industry, and trade minister said, “Russia is offering reduced mining taxes and cheaper loans to investors in a list of 11 projects designed to increase Russia’s share of global rare earth output to 10% by 2030 from 1.3% now. The Russian projects will require at least $1.5 billion in investment.”
China will keep its market dominance, but “Russia’s goal is to be at least the second after them by 2030,” said Besprozvannykh.
The 11 projects, which include developing the Tomtor deposit in Russia’s far east, will allow Russia to become almost self-sufficient in rare earth elements by 2025 and start exports in 2026, the deputy minister said.
By 2024, Russia’s production of rare earth concentrate may reach 7,000 tonnes a year, he added. The U.S. Geological Survey estimated Russia’s 2019 production at 2,700 tonnes.
So far rare earth processing is almost totally controlled by China, with the exception of a plant in Malaysia, operated by Australia’s Lynas Corp, and the U.S. is reviving production.
Russia's initiative is in line with other countries, such as the United States, which are also trying to curb their reliance on China, home to 63% of global rare earth production and 37% of global reserves here.
Russia produced 2,700 tonnes of rare earth in 2019, flat from 2018. The country’s government is allegedly “unhappy” with its supply of rare earth, and the companies IST Group and Rostec made a USD 1 billion investment into production a few years ago. It’s expected that production in Russia will increase over time through the development of pre-existing rare earth fields.
China’s established dominance is hard to weaken. China has dominated rare earth production for a number of years. In 2019, its domestic output of 132,000 tonnes was up from 120,000 tonnes the previous year.
Chinese producers must adhere to a quota system for rare earth production. The full-year quota for mining in 2019 was set at a record high level, while the quota for smelting and separation was 127,000 tonnes. Interestingly, this system led China to become the world’s top importer of rare earth in 2018.
Currently, six state-owned miners are in charge of the rare earth metal extraction industry, in theory allowing China to keep a strong handle on production.
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