How the government is going to support projects for the production of rare earth metals, the Deputy Minister of Industry of the Russian Federation told Kommersant Alexey Bezprozvannykh.
– In 2020, the government reduced the MET rate for rare earth (REM) projects. Do you need an additional reduction?
– This decision at one time helped to support newly created projects. But last year, as you know, it became necessary to use a 3.5 rental coefficient for the extractive industries. This rent has spread to all rare earth and rare metals, and now, together with our colleagues from the Ministry of Finance and companies, we are solving issues of supporting our projects. There are two approaches: to make an exception for the rare earth industry as a whole, or to look individually at each project in our roadmap. In the case of an individual approach, we will separately conclude an agreement on the protection and encouragement of investment with each enterprise and thereby reduce the coefficient to 1 instead of 3.5.
– In the new “road map” for the development of REM, the main contractor is Rosatom, whereas before the industry leader was Rostec. What is the reason for this change?
– Rostec was engaged in the development of a number of important and complex projects within the framework of its interests. But Rosatom was the main executor on the roadmap, which plans to diversify its business in the coming years. At the same time, since Soviet times, rare and rare-earth metals have been in the sphere of activity and competence of Rosatom.
– Russia, according to the “road map” until 2030, wants to occupy 10-12% of the world rare earth market. Whose positions are we claiming – Australia, USA, China?
– The main market share is currently occupied by China. The main thing is that our products will be competitive, so we expect to take our place in the world. China, Australia or the United States – it’s hard to say this now, but we have the potential to take a much larger market share.
Let me remind you that from 1970 to 1992 the USSR ranked third in the world in rare earth metals, exporting about 14% of production. There was a complete production chain in the country. We not only satisfied internal needs, producing 8.5 thousand tons of separated rare earth metals per year, but also had a high competitiveness in the world market. However, after the collapse of the USSR, since the production facilities were located in different countries, the chain, consisting of extraction, enrichment, processing and separation, consumption and utilization, disintegrated. Separation capacities in Russia have been completely lost, and now our country imports up to 90% of REM of high value added. Therefore, today the most important task for us is to restore the lost separation production capacities. So far, we are mostly exporting REM concentrate and importing oxides.
– Where is the concentrate being transported to now?
– To different countries, but mainly to Estonia. This, of course, does not suit us, especially since consumption is growing in Russia. Today our processing and separation is about 150 tons with a total consumption of 1.1 thousand tons. Therefore, the key task by 2023 is to achieve production in the amount of 500 tons, and by 2024 – up to 2 thousand tons, to reduce import dependence on rare metals to 50%, and from rare earth metals – to 20%. By 2030, we plan to completely abandon dependence on the import of rare and rare earth metals.
We understand that we need to focus on two areas. On the one hand, on the systemic support of the entire industry, and on the other, on the support of specific projects that would solve our priority tasks.
– How do we compare to competitors in terms of production costs?
– The cost of production is primarily determined by production technologies, the level of content of useful components in the field, logistics capabilities, the availability of transport and energy infrastructure. According to many of the listed criteria, our country has enough advantages to have a low cost.
– How does the domestic rare-earth market look like now and how can its growth be stimulated?
– The civil sector, according to our estimates, consumes about 875 tons per year. These are mainly catalysts for oil and gas processing, metallurgy, optics, etc. In the roadmap, we created a balance of production and consumption for each metal, looked not only current consumption, but also how it will grow in the future. Consumption will grow, and in the near future. Our task is to create a quality product.
– What are the key roadmap projects for the industry?
– Today there are six of them. The Skygrad Group of Companies is implementing a project to process phosphogypsum and extract from it virtually the entire range of rare earth metals in Voskresensk (Moscow Region) on the territory of Voskresensk Mineral Fertilizers JSC (part of Uralchem .— “B”). With this project, we almost completely cover our need for rare earth metals, so it is a key one for us. Today it is being implemented jointly with Rosatom’s subsidiary Atomredmetzoloto. By September 2021, funding for the project should be open and the creation of a pilot plant should be started. The capacity of the first technological line is 66 thousand tons of phosphogypsum per year with the production of 250 tons per year of rare earth concentrate. It is possible to double production to 500 tons per year after working out all technological modes and regulations for the first technological line. The line will reach its design capacity in 2024.
The second important project will be implemented at the Tugan field, where it is planned to produce zirconium and ilmenite concentrates. Here, too, we work in partnership with Rosatom. We hope to open production in December and produce 2.22 thousand tons of zirconium and 11.4 thousand tons of ilmenite concentrates per year. In the fourth quarter, the first stage will be put into operation, which will be able to process 575 thousand tons of ore sands per year.
At the Zashikhinskoye field (owned by the structures of the ex-owner of the ChTPZ Andrey Komarov. – “B”) it is planned to produce by 2026 about 2 thousand tons of niobium pentoxide, 200 tons of tantalum pentoxide and about 4 thousand tons of zirconium dioxide. The next project in the Krasnoyarsk Territory is the production of germanium. By 2024, we plan to produce 5 tons per year, and in 2026 – 15 tons. Another project is the creation of a production of permanent magnets. It is implemented by TVEL (part of Rosatom .— “B”). In 2022, it is planned to produce about 400 tons per year, and by 2025 – 1,000 tons. The products will be of interest to wind power engineers, whose industry is actively developing.
And of course, one of the key projects is being implemented at the Tomtor field (the IST group of Alexander Nesis.— “B”). Production is scheduled to start in 2024. The capacity of the Krasnokamensk Combine, which will process the ore, will include 10 thousand tons of niobium, which is used as an alloying additive in the production of frost-resistant steels for oil and gas pipes of large diameter. The world ferroniobium market is growing by 4-7%, while Russian metallurgists are still forced to import raw materials in the absence of local producers. Also on Tomtor there is scandium, terbium, yttrium. The volume of only one Tomtor will be enough to fully meet the domestic demand for rare earth metals and exports.
– The Tomtor field has a problem with radioactive waste disposal. How will it be solved?
– This issue is being resolved at the legislative level. We hope that this year it will be possible to balance the law in such a way that projects that are beneficial for the Russian economy and industry can be implemented without harming the environment.
– What is the status of the project for the production of lithium at the Kovykta field of Gazprom? Are there any difficulties with the division of the license due to the fact that lithium production is planned at the gas field?
– At the moment the project is being coordinated with the strategy for its implementation. Three development scenarios are possible: either develop their own technology (extraction of lithium – “B”), or use an existing one, developed entirely by third parties, or in conjunction with them. Perhaps, it will indeed develop its own technology and equipment for the processing of hydro-mineral brines containing lithium and other useful components by 2023. Gazprom will also decide whether it will work in partnership with anyone or not. The issue of licenses is being decided jointly with the Ministry of Natural Resources. The Ministry of Industry and Trade is faced with the task of providing support to the project: it can be subsidizing R&D costs, as well as changing regulatory legal acts.
The project with Gazprom is not the only lithium mining initiative we are considering. For example, we are working on a project for the production of 45 thousand tons of lithium hydroxide per year, the investment passport of which has been submitted for consideration to Rosatom.