EDITOR: | September 12th, 2013

Russia’s REE: the secret Soviet legacy

| September 12, 2013 | No Comments
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russia flagThe headline read “Exclusive: Russia’s REE potential”. That was June 2011 here on the forerunner of Investor Intel. Now Daniel McGroarty has broken a great story about rare earths in Russia’s far east.

Many thousands of people are reading this website that were not with us two years ago, so here is a story we broke in June 2011 which will bring in some background to Daniel’s fascinating post today. It reads …

Russia seems ready to emerge as a new rare earth power. Not only has it identified several projects, but also there is – amazingly – a stockpile of concentrate whose origins date back more than 50 years.

Rare earths and the Soviet Union have not figured too much in our thoughts here. The preoccupation has been all about China. Time to adjust that thinking.

It may be that the inheritors of the Soviet empire, the various now independent republics that have taken its place, have been a little overlooked. Now, however, we have chapter and verse of some of the bigger projects located within Russia that, if they were to go ahead, could change significantly the REE “balance of power”.

There are five main projects for which we now have details. The information is publicly available in Russia – but we understand that you have to know your away around the system to gain access.

The most extraordinary is near the city if Yekaterinburg in the Urals. There is warehouse full of monazite concentrate. It would be available to process the concentrate to produce REE; the information is that it would be possible to create a highly profitable enterprise producing 2,500 tonnes a year of total rare earth oxide.

The concentrate was stored from 1956 in wooden boxes placed in metallic sheds, the total quantity being 82,653 tonnes. Concentrate is represented in several lots differing in chemical content, but the boxes average 54 per cent rare earth oxides, 22.2 per cent phosphate, 7.8 per cent thorium, along with uranium, zirconium and titanium dioxide, plus oxides of iron, aluminium, silicon, calcium and magnesium.

The Russians have studied four possible sites for processing the concentrate. These could between them produce lanthanum carbonate and oxides, cerium, neodymium, praseodymium, samarium, terbium, dysprosium, europium, erbium, gadolinium and yttrium. Production at one plant in the Sverdlovsk region will include manufacturing magnets. It is expected that production of magnets containing REE will be possible from 2016.

The other projects are potential mining operations.

There is Tomtor in Yakutia, well inside the Arctic Circle and with only three months a year not covered in snow. The temperature range over the year is from 13C in the summer to -50C in winter. The resource of 150 million tonnes of REE is spread over three main deposits. The Russian documents show that it could be mined by open pits down to a depth of 70 metres with operations taking place between October and April. Production would be possible from 2015 with annual output of 11,000 tonnes of total rare earth oxides, 9,000 tonnes a year of niobium oxide and 4,000 tonnes of titanium dioxide. The transport options are northwards by road to a seaport or south by road to the railway at Lena.

Near the northern city of Murmansk (180km by highway) there is the Lovozerskoe deposit, part of a group of mining and processing facilities geared to produce rare earth metals as well as niobium, tantalum, titanium and magnesium. Potential produce of REE is 3,600 tonnes a year. This area was discovered in the 1920s and magnesium production began in the 1930s. Rare earth “raw materials” production began in 1971.

Then we have two projects near the important Siberian city of Irkutsk. The Katuginskoe deposit, northeast of Irkutsk, is expected to produce REE, niobium, tantalum and zirconium. Temperatures range from over 30C in the summer to about -60C in winter. Infrastructure is being developed to serve the nearby Udokan copper project and 45km away there is a coal deposit. Preliminary assessments are that annual production could amount to 5,000 tonnes a year of total rare earth oxides, 4,000 tonnes a year of niobium, 300 tonnes of tantalum and 33,000 tonnes of zirconium.

Northwest of the city is the Chuktukonskoe deposit with, the Russians believe, the capacity to produce 9,000 tonnes a year of total rare earth oxides, 1,000 tonnes of niobium, and 18,000 tonnes of magnesium. Just 110km away a hydro power plant is under construction.

Footnote:
In a post in November 2010, I did note that back in the 1970s the now independent Kyrgyzstan was the source of most of the USSR’s rare earths (just as it was in respect of uranium). As I said, for all the Cold War chill back in 1973, the Russians seemed fairly relaxed about shipping them abroad. The New York Times reported in December that year on a press conference held on Madison Avenue by Leonid M. Andreyev. The Soviet trade mission head was promoting his country’s rare earths such as lanthanum and praseodymium. The Soviets, he said, were very pleased about the expanding US imports of yttrium.


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