Russian state-owned Rostekh and ICT Group plan to invest at least one billion dollars in a joint holding that would extract and refine rare-earth metals at the Tomtor deposit in the Russian republic of Yakutia, Russian media reported on Friday.
The construction of a hydro-metallurgical plant that would process rare earth metals is due to be completed by 2018.
Rare
earth metals, or rare earth elements, are a set of seventeen chemical
elements in the periodic table that are used in the manufacture of
tablet computers and smart phones, as well as in aircraft engineering,
automotive and atomic energy industry and the military sphere.
In
February 2013, the Russian government approved a state program on
producing rare earth elements in the country, something that was then
hailed by head of Yakutia Yegor Borisov who touted ICT Group as a
“strategic investor.” Borisov was echoed by Moscow-based investment
expert Nikolai Sosnovsky.
"Earlier,
ICT Group successfully implemented a spate of projects pertaining to
the production of ferro-alloys and precious metals, Sosnovsky says,
praising ICT Group’s mining expertise. As for Rostech, it represents the
state because the production of rare earth elements is a strategic
sector."
The past several years have seen an
ever-increasing demand for rare earth metals due to the development of
the economy. China presently produces more than 95 percent of the
world’s rare earth metals, something that enables Beijing to restrict
rare metal exports and push up prices. Nikolai Sosnovsky once again.
"China
managed to consolidate practically all global production of rare earth
elements, Sosnovsky says, pointing to low-cost labor and low
environmental requirements in China. These factors are of great
importance to the production of rare earth metals, he concludes."
Other
major players react angrily to China’s monopoly on rare earth elements,
with Russia, the United States, India and Brazil trying to start their
own production.
Analysts say that Russia accounts for
only 2 percent of production and consumption of rare earth metals.
Another Moscow-based investment expert, Vasily Kuligin, says that Russia
has yet to create more refining capacities.
The Russian
government has repeatedly signaled its readiness to develop those
innovation areas that badly need rare earth metals. Experts say,
however, that if the production of rare earth elements outpaces the
domestic demand for them, Russia will have to significantly increase
rare earth metal exports.
In any case, the
diversification of Russia’s raw material industry is of paramount
importance, experts say, adding that a global demand for rare earth
elements is likely to grow.
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