EDITOR: | January 6th, 2017

Russian government “unhappy” with rare earth supply for defense sector

| January 06, 2017 | No Comments
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The Russian government is unhappy with the current rates of domestic rare earth developments in their major local fields.

According to the Russian Ministry of Energy, while Russia currently has no problems with rare earth reserves, which are estimated as one of the world’s richest: the rates of their development leave much to be desired.

In recent years the consumption of rare earths in Russia has significantly increased and is currently estimated at 1,000-2,000 tonnes per year. The majority of rare earths are supplied for the Russian defense sector needs, however, according to the government – these figures are insufficient.

Currently Russia accounts for 1% of global rare earth elements (REE) production and, according to state plans, these figures should significantly increase in the coming years, which is expected to take place through more active development of the existing Russian REE fields.

Currently among Russia’s largest REE fields are the Tomtor, Seligdar and Lovozero. According to the government, currently the development of the majority of these fields, except Lovozero, is carried out at very slow rates.

According to state plans, in addition to the development of the largest fields, particular attention should be paid for the production of REE from fly ash coal ash, titanium-zirconium fields, apatite deposits, volcanic gases and rewash discards.

In the meantime, according to producers, the criticism of the government is unfounded as they cite Western sanctions making foreign investment dollars inaccessible to producers for the delays. Adding that the development of domestic REE fields are being slowed down due to the huge investment requirements required during the first stages of the implementation of these projects.

Producers also believe that technological gap currently remains one of the major problems of the Russian REE industry. That could be mainly explained by the lack of systematic research and development on the design of new and modernization of the already existing technological schemes for the last 20 years.

Among the problems of the industry are also lack of analytical laboratories for mineralogical and elemental analysis, geographical inaccessibility of the majority of REE fields, problems with the attracting of funding for these projects; complex structure of the fields and high volatility of the REE market.

At the same time the Russian government is aware of the existing problems and is considering adopting additional measures to support producers. Among the planned measures are direct state participation in the mining and processing of REE fields, the expansion of R&D activities, the provision of additional tax incentives for subsoil users, the guaranteed purchase of REE to the existing State Depository for Precious Metals (Gokhran) and the formation of strategic reserves of REE.

Overall, the demand for REE in Russia is steadily growing. For example, there is the ever growing demand for lutetium – the rarest of REE, which is currently in high demand in the Russian nuclear medicine. In the case of nuclear energy, there is a steady demand for gadolinium and erbium.

According to state plans, by 2020 the volume of consumption of REE in Russia will exceed 180,000 tonnes.


Eugene Gerden

Editor:

Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>


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