Industry news
Russia will increase production of ＂rare＂ metals
According to a report by MiningNews.net, Russia's Ministry of Industry and Trade announced on August 12 that, based on the industrial development plan adopted in March, Russia aims to increase the annual production of "Large-tonnage rare metals" (LARM) to 50,000 tons by 2030. LARM is a term used in Russia to describe a variety of key minerals, including lithium, tungsten, molybdenum, niobium, and zirconium. The Russian government's so-called "Low-tonnage rare metals" (LORM), which include tantalum, beryllium, germanium, gallium, and hafnium, are targeted for production of 80 tons by 2030.
In 2024, Russia produced almost no such minerals. Under this plan, the Russian government aims to build domestic processing capacity to produce refined products for sale on the domestic market. On July 2, Russian Minister of Industry and Trade Anton Alikhanov announced at a meeting of the Federation Council, the upper house of parliament, that the government is working with investors to promote 20 projects in the field of key minerals and rare earth metals. The ministry is screening projects that could receive state support, including direct subsidies for research and development activities, discounted soft loans, and reduced import and export tariffs. According to the industrial development plan, Russia plans to allocate 60 billion rubles (US$744 million) from the federal budget to support several projects in this field. Currently, there is no consensus on the scale or feasibility criteria for Russia's key mineral deposits. In 2024, the Russian Federal Subsurface Resources Agency (Rosnedra) estimated that the country's reserves of key minerals and rare earth metals were approximately 28.8 million tons, ranking second in the world. The United States Geological Survey (USGS) estimated that Russia's rare earth mineral reserves in 2023 were only 1 million tons, ranking fourth behind China, Vietnam, and Brazil. Over the past few years, all rare earth projects in Russia have stalled because most deposits are unprofitable to mine at current market prices. For example, Rostec, a state-owned enterprise in Russia, and its partners won the Tomtorskoye project in Yakutia, northern Siberia, through a bidding process in 2014. The project is considered one of the world's largest rare earth deposits with reserves of nearly 3.2 million tons and was originally planned to be put into production in 2019 or 2020.
However, Rostec withdrew from the project in 2019, and since then, the future of the project has remained unclear. Another attempt to start rare earth production in Russia was made by fertilizer manufacturer Acron Group, which began extracting rare earth metal oxides from monazite-nepheline in the Murmansk region in 2016. The estimated $50 million investment went down the drain, and due to low profits, the plant ceased production in 2021. Strategic significance Observers remain skeptical about Russia's ability to expand rare earth metal production as per its goals. "From an economic perspective alone, mining rare earth deposits in Russia makes no sense," said a source from the Russian mining industry who declined to be named. "The reason for developing this plan is that, under the current geopolitical situation, we (Russia) do not want to rely on imports of these crucial raw materials, even if they come from friendly countries." "It can be argued that it is precisely because rare earth deposits are strategically significant to the national economy that Russia will continue to produce rare earths," the source added. "One of the key issues in Russia's rare earth metal industry is the lack of necessary technology," explained Igor Yushkov, a senior analyst at the National Energy Security Fund and an expert at the Russian Federal University of Finance and Economics. "Given the sanctions, Russia actually needs to develop almost all the equipment used for mining and processing rare earth metals."
Therefore, the cost of rare earth production in Russia is expected to further rise, Yushkov said. The recent industrial development plan's promised state assistance may provide some help, but it does not guarantee its long-term profitability. Yushkov believes that US President Trump's interest in rare earths may have an impact on Russia's rare earth industry. In February, Russian President Putin stated that the United States may be interested in exploring joint exploration of rare earth metal deposits in Russia. Yushkov pointed out: "The lifting of sanctions on the transfer of rare earth mining technology by the United States and allowing US companies to invest in rare earth deposits may help the rapid development of Russia's rare earth metal industry."
