To Russia with Love: Russia to Resume Production of Rare Earth Metals.

Russia FlagThis month has been an incredible one for content on RareMetalBlog. Just sitting in a Holiday Inn in Rolling Meadows, Indiana where I just checked in — getting ready for the kick-off of the Chicago Resource Investment Conference where Mickey Fulp and I can debate our respective view points on rare earth. But before I do this, I want to get this post up before I hit the floor. Several months ago, I was introduced to a writer named Eugene Gerdin. He made a very positive impact on me and I agreed that we need more coverage on Russia. 

This piece was commissioned for the RareMetalBlog audience, we hope you enjoy it.

Editor, Eugene Gerdy – Russia is considering resuming active production of rare earth metals, amid the ever growing demand for them from high-tech segments of the domestic industry and the possibility of the imposition of export restrictions by China, the world's largest producer of rare metals.  

It is reported that the Russian government has already started to develop a package of bills, designed to create conditions for a significant increase in the production of rare earth metals in the country in the near future. As part of this initiative a federal target program, known as the "Development of the production of rare earth metals for the period of 2012 – 2015 years and up to 2020", as well as a number of additional legislation are expected to be adopted.

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There is also the possibility of the establishment of a special state body, which will  regulate the production, processing, production and sales of rare earth metals in Russia.

According to state plans, Russia's share in the global market of rare-earth metals, which is currently dominated by China, by 2020 is expected to increase up to 10% -15%. This should happen through the development of a number of local large fields of rare earth metals.

Today almost all rare-earth metals are imported to Russia from abroad, despite the fact that the country has the world’s second largest reserves of these metals. According to Arkady Naumov, a well-known Russian analyst in the field of rare-earth metals, Russia has enormous resources for the production of rare earth metals.

Naumov comments: "At present Russia has 14 fields of rare earth metals, of which 60% are located on the Kola Peninsula, 14% in the Murmansk region, and 22% – on the territory of Yakutia. Large stocks are also located in the Krasnoyarsk’s Chuktukonsky field."

According  to the Russian Mionistry of Natural Resources, at the initial stage a particular attention is expected to be paid to the development of Tomtorskoy field in Yakutia (one of Russian Republics, which is also a center of gold mining in Russia) as well as projects in the processing of monocyte at the Solikamsk magnesium plant.

Currently the Solikamsk plant remains virtually the only supplier of rare earth metals in Russia, the majority of which products are exported abroad. At the same time Russia's annual demand for rare earth metals is estimated in the volume of 2000-3000 tons is currently provided by imports by almost 90%.

In the case of Tomtorskoy field, its ore currently contains an average of 9-12% of oxides of rare-earth metals. These ores has high content of niobium (up to 7%, which have no analogues in the world), yttrium, scandium, and part of a class of complex polymetallic raw materials.

Russian scientists believe that the development of a only Tomtorskoy field can generate as much revenue to Yakutia, as the entire annual production of gold.

In addition to the direct increase in production, the Russian government plans to resume geologic exploration in the field of rare-earth metals (which stopped since 1990), as well as training of experts in this area.

According to Gennady Sarychev, director of the All-Russian Scientific Research Institute of Chemical Technology, today, only five high schools prepare such specialists and the establishment of R&D in this area is a an acute need for the Russian economy and industry.

It is planned that in the case of successful implementation of projects the domestic production of rare earth metals in Russia is expected to increase to 14,000-15,000 tons, which will be significantly higher than the production of rare earth metals in the USSR.

With the collapse of the Soviet Union, which produced 8500 tonnes of rare earth metals per year, Russia has lost many of its deposit of rare earth metals, and especially their processing capacities. In addition, a series of economic and political crises in the country in the 1990s resulted in the fact that the extraction of rare earth metals, which was conducted in 35 regions of Russia during the Soviet era, has been almost completely stopped.


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Tracy Weslosky

About Tracy Weslosky

Tracy Weslosky is the Publisher and Editor-in-Chief of InvestorIntel, a leading global investment intelligence source created for the innovative and entrepreneurial minded that represents over 50 publicly listed companies globally that are listed on InvestorIntel.com. Tracy is also the Founder & CEO for ProEdge Media Corp., an online publishing and media production company since 2001; and is the Managing Partner for 724 Capital Corp., a business consulting firm that currently represents U.S. Rare Earths, Inc. Previously she has owned a boutique Investment Banking firm for 7 years that was the basis for a business reality television series called, DealFlow. Aired around the world for 3 years on CNBC World, WealthTV and many other networks globally; Tracy is a speaker, writer and an entrepreneur.
  1. Are there any risks to “neighboring” REE supplies.
    Putin politically is talking “expansive”?
    How insulated is Stans from Russia takeover?
    Kind regards,

  2. Thank you Veritas Bob
    Fascinating link and commentary.
    I liked Robin Bromby’s comments among others
    And the reference to Indiana Jones and government storage in wooden boxes is spot on.
    Kind regards,

  3. Also like this current link.
    http://www.raremetalblog.com/2012/04/rees-from-space.html
    Outer space asteroid search for REEs and other precious or strategic metals?
    Certainly gives us RMB regulars a boost in our minds? We are on to the biggest opportunities in the next 25 years.
    How does it feel to be on the ground floor of breakthrough investment opportunities?
    The “big boys” are following us for a change?
    Kind regards,

  4. What about Stans? They have access to Russian University scientist I read? They have the only non chinese former operating mine that mined all the heavies…I would love an update on this company…

  5. Stans may have access to some Russian scientists, but the mine itself is located in that notorious den of corruption, Kyrgyzstan, which of course is not part of Russia. Stans’ Kutessay II mine and processing facility is one of the rare earth deposits which “Russia” lost, as alluded to in this sentence from the article “With the collapse of the Soviet Union, which produced 8500 tonnes of rare earth metals per year, Russia has lost many of its deposit of rare earth metals, and especially their processing capacities.”

  6. “…is located in that notorious den of corruption…” :
    Stans management team is comprised of many highly competent politicians that have gained respect of the locals and it’s government.
    As an investor, you have to assess whether you have believe in management and have an appetite for risk. GLTA.
    Disclosure: Long and strong

  7. Having Dr. Sarychev, the Director of VNIIHT (All Russian Research Institute of Chemical Technology),as a member of our Advisory board is a tremendous asset for Stans Energy and its shareholders. As part of the working relationship with both Dr. Sarychev and VNIIHT, Stans Energy continues to actively evaluate new REE oportunities in all areas of the the Former Soviet Union.
    David Vinokurov
    Manager Investor Relations
    Stans Energy Corp

  8. On more than I already wrote in his comments, Russia has great potential in rare-earth metals, and it’s true. As it is also true that the revival of the industry is problematic. Not part of the industry because you can convert a number of plants of Rosatom, and in part byurakratii nepovarotlivosti and state, and business.

  9. Well: I am glad that there are others out there that start to get more interest in Stans. And not being in Russian hands is in my honest opinion rather a good thing. Or are you a believer of the Russion Democratic Party? Well, I am not…
    @David Vinokurov: where excactly is Stans on its way to become a succesful rare earth mine again? What are the companies strongest trump cards for the future? Please give us investors a look into Stans sleeve.

  10. Well, Russia is not exactly the paragon of transparent or corruption-free government or business. But I certainly don’t think Kyrgyzstan is any better in those regards, and likely worse.

  11. I do not think that konfferentsiya may decide that something concrete. It is organized in the wake of the global interest in this subject and all.

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