Murmansk, a port city, located in the extreme northwest part of Russia, is expected to become a center of Russia’s rare earth metals production in the coming years, according to state program “Production of rare earth metals in Russia until 2020”, which was officially adopted by the government on the 5th of February.
The implementation of the program will take place in two stages. During the first period of 2013-2016 years a series of research and exploration works will be completed after which the explored fields will be registered. The first stage also involves the development of regulatory framework for such type of activities.
Total funding of the first stage of the program will be 72.5 billion rubles (USD$2.2 billion), of which 8 billion rubles will be allocated from the federal budget, while the remaining will account for private investments.
The second stage of the program involves the provision of measures of state support to the established enterprises in the form of loans, tax breaks, and improvement of the system of licensing.
Total funding of the whole program until 2020 will be RUB 147 billion.
According to Gleb Nikitin, Deputy Minister of Industry and Trade, the main target of the program is full provision of the country’s total needs in rare earth metals by 2020 as well as Russia’s entry into the world market of high added value products, manufactured with the use of rare earth metals (REM).
The program also involves that Murmansk region will become a base for production of rare earth metals in Russia until 2020.
According to Marina Kovtun, Murmansk governor, the region has perfect conditions for it, taking into account that at present it accounts for 75% of total Russian reserves of rare earth metals.
According to state plans, the majority of future production of rare earth metals in the Murmansk region will account for Khibiny-Lovozero field.
Until recently, the majority of rare earth metals, which were produced in the Murmansk region, were considered as byproducts of the production of fertilizers by local Phosagro and Akron companies, Russia’s leading producers of fertilizers.
However this soon will change, as the new program involves the participation of the Russian government together with Rostechnologii corporation, Russia’s leading producer, developer and exporter of high-tech products, and Rosatom in the project of investing up to 100 billion rubles (USD$3 billion) in the establishment of a base for the production of rare earth metals in Russia, which is expected to be located in Murmansk.
According to the investors, as part of these plans a series of investment projects is expected to be implemented, payback period of which is expected to be in the range of 8 to 20 years.
One of such projects may involve the development of the Lovozersky field, Russia’s largest loparite field, where the REM content of primarily of cerium group is estimated at about 1.12%.
After this, titanium-tantalum-niobium concentrates, which will be produced at the Lovozero mining and processing complex, will be supplied for further processing to Solikamsk magnesium plant, which specialize in the production of REM carbonates.
Local analysts believe that the establishment of its own production of rare earth metals is an acute need for Russia, as in recent years, the demand for rare earth metals in the country has significantly increased.
According to Russia’s analyst agency Mineral, since 2000s imports of rare earth metals to Russia in finished products has increased by 16 times, from 3000 tons in 2000, up to 49,000 tons in 2012.
Currently Russia has three plants for the production of rare earth metals, among which are Lovozero mine, Solikamsk magnesium plant as well as Chepetsky Mechanical Plant.
Until the end of 2012, the production of rare earth metals was not in the sphere of interests of low-tech Russian industrial products. Moreover, the country experiences a lack of processing capacities. The USSR had several plants for REM production, however after its collapse they became ownership of Estonia, Kazakhstan and other post-Soviet states.
At the same time, according to analysts of the Russian Ministry of Energy, the Russian government has chosen right time for the development of the national industry of REM, which is part of the state strategy of innovative development of the country’s economy until 2050.
The only problem may be associated with low demand for REM from the country’s industrial branches and also military.