Russian Industry and Trade Ministry Announces Plan to Increase Production of Rare Earth Metals
The Russian Industry and Trade Ministry has announced plans to increase the production of rare earth metals in Russia to 50,000 tons, valuing the resources at 100 billion rubles. Russia has also offered the United States to participate in the development of this industry.
The interest in these resources is due to their use in the production of high-tech products, such as smartphones, electric cars, lasers, aircraft and medical devices – not just in the civilian sector, but also in the defense industry.
Russia still produces modest amounts of these elements. While China produces 270,000 tons and the US produces 45,000 tons of rare earth metals, Russia only produces 2,600 tons per year, according to US estimates. Consequently, China holds 70 percent of the global market, the US holds 11.5 percent and Russia holds less than one percent, with the world producing a total of 390,000 tons of these minerals.
Alexander Toporkov, director of TDM96, a company that has been importing rare earths from China for over 15 years, explains in an interview with the newspaper Vsgljad why the world is competing for these resources, whether Russia has its own technologies for extracting and producing rare earths and how China’s experiences can help Russia.
“Why is there a global rush for rare earths? Will they be urgently needed by the United States? Is the logic that the one who has access to cheap rare earths will be the ruler in the future? The US wants not to be dependent on China for rare earths in order not to lose its economic leadership?”
“Technological security is a fitting term here, as both the US and Russia have given the market for rare earths to China and modern technologies are no longer imaginable without them.”
“Technological security is reflected in the reduction of dependence on other countries, especially those that claim a certain superiority in the world (mainly today), so that rare earths play a key role in technological independence.”
Russia and the US were dependent on China in the 1990s when China gained a monopoly in the industry. The US still has its own rare earth deposits and even developed deposits, but the inability to compete with Chinese companies led to a reduction and in some cases the closure of companies in this industry. And Russia did not pay much attention to this industry, as it had other problems.
“Why is Russia, rich in rare earths, lagging behind in their production?”
“It’s not that we are not represented on the market for rare earths – we simply were not represented. We were content with China’s cheap market, even the US was.”
“And only when China began to use rare earths and rare metals as a lever in new sanctions (in the first term of Donald Trump) did everyone realize that China had a monopoly on the market and could easily manipulate it.”
“How did China achieve its current heights? The country produces 270,000 tons of rare earths and rare metals, which is 70 to 90 percent of the world’s production. What did the country do to achieve this and what can we learn from its experiences?”
“China acted wisely. Already in the mid-1980s, the country realized that its eternal enemies – the Japanese – were actively buying up its rare earths and rare metals in the form of semi-finished products. And only then did the Japanese bring high-value products – machines and electronics – back to the Chinese market. Beijing came to the conclusion that not semi-finished products, but high-processed products – oxides and metals from rare earths and rare metals – should be sold. China began to increase the level of processing, earn more from its exports to Japan and invest in the development of its country.”
“Therefore, it is unlikely that we can adopt China’s experiences – it will neither be a temporal nor situational equivalent. We must develop independently. Moreover, our ore, which contains rare earths, is more complex than the Chinese, so their experiences are not even geologically suitable for us.”
“When the issue of technological security in Russia became acute, producers faced bureaucratic problems. Officials were asking whether Russia should first develop the domestic consumer market for rare earths and then produce rare earths from domestic sources, or the other way around – first produce rare earths from domestic sources and then develop the domestic consumer market. Due to these doubts, the industry has been stagnant for a long time.”
“If we adopt China’s experiences, then in this respect: they did not develop the market for rare earths and rare metals for their domestic consumers, it simply did not exist. They created a production that already had domestic technological consumers.”
“Yes, China copied and continues to copy leading technological products (electric cars, smartphones, electronics and so on), but they do it with their own resources.”
“The Russian Industry and Trade Ministry plans to start production of 50,000 tons of rare earths by 2030, valuing the resources at 100 billion rubles. What is required to achieve this?”
“The ministry plans to open a plant for the production of rare earth magnets in Glasow, part of the Udmurt Republic, based on the Chepezki Mechanical Plant, by 2028. This makes sense: the plant extracts metals from ores (hydrometallurgy) and should focus on the separation of rare earths, rare metals and refractory metals. The plant is specialized in refractory niobium.”
“The Chinese train, however, is racing at an unprecedented speed and it is difficult to keep up with it.”
“Russia must produce a certain number of tons of rare earths and rare metals to primarily supply the domestic consumer and ensure the technological security of its own material base.”
“What competitors does Russia have – apart from China – on the global market for rare earths, which is expected to grow at a rate of 10 percent per year?”
“A serious competitor is the US, with its own production facilities, including the Molycorp Silmet plant in Estonia. Another potential competitor is Brazil, if we consider the reserves of rare earths and rare metals known and recognized by the global scientific community. I, however, question who will be able to join this race faster and who will survive it?