"A quarter of the world's reserves of rare earth metals are concentrated in Russia"

Russia is one of the three world leaders in reserves of rare earths — our deposits contain about a quarter of all these metals on Earth. However, the country's share in production currently barely exceeds 1%, while demand for raw materials is growing. Sergey Kirillov, Associate Professor of the Department of Rare Metals and Nanomaterials at Ural Federal University, told Izvestia about this in an interview. The thirty percent jump in production was caused by the sharply increased popularity of electric vehicles with rare earth metals in their engines. About this, as well as the fact that Russia has enough deposits to meet the needs of the global economy, but this requires serious investments, in an interview with Izvestia.

"The most valuable rare earth ores are mined in China"

— Let's start with the definition. What are these materials? How widespread are they in the world?

— 17 elements belong to rare earth metals. These are the so-called lanthanides, there are 15 of them. And additionally, yttrium and scandium, which are chemically as close as possible to lanthanides. "Rare earths" is just a name. In terms of their content in the earth's crust, they are comparable to copper or nickel, which are extracted industrially.

The peculiarity of their extraction is that there are few deposits of these elements. Most of them are usually concomitant. The difficulty of the geology of rare earth metals is that it does not resemble, for example, a dedicated copper deposit. The elements are very scattered. And in order to extract them economically, the minerals must be concentrated in one place or the extraction must be concomitant. For example, in addition to rare earths, tantalum and niobium are mined at the Lovozersk Mining and Processing Plant in the Murmansk Region. And complex mining makes it economically profitable to do this.

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How their value may change in the future and what factors influence this

— And where and how in the world are they mined now?

— China is the main global producer. Their ores are quite rich. The peculiarity of rare earth metals is that, as a rule, all the elements are found together in the deposit. However, their value varies and depends on the needs of the industry. For example, lanthanum and cerium were in demand in the Soviet Union because they were used in metallurgy and the oil industry. But then, with the development of green energy, electric transport and electronics, metals of the magnetic group, as well as terbium and dysprosium, began to come out on top. At this stage of industrial development, the most valuable ores of rare earth elements are mined in China.

— Do we need any special technologies for their extraction? How do they affect nature?

— Mining methods are approximately the same as for non-ferrous and ferrous metals. This includes ore, its enrichment, chemical processing of concentrates with the release of target rare earth elements, and then metallurgy — the production of metals. As a rule, these are the same methods that were developed back in the 30s, 40s, and 60s of the 20th century. In terms of their impact on nature, they do not differ from the methods of mining nickel or cobalt. But technology is evolving. Green chemistry methods are emerging aimed at studying interphase distribution so that more nature-friendly leaching agents can be used, which, even if leaked, would not harm the environment. But these technologies are more expensive.

"The problem with the rare earth elements business is that it is very volatile"

— What is the main feature of the global rare earth elements market?

— The problem with the rare earths business is that it is very volatile. It's not oil or platinum. China, as a monopolist, can drop the price tenfold overnight, and then all businesses that focused on the environment and used some more expensive mining methods immediately go down the drain. Therefore, mining in Europe is not developing at all, because there is a very strong environmental lobby there and everyone understands that business there may be unprofitable.

China produces about 70% of rare earths. But over the past couple of years, the United States has come in second place. That is, if China supplies about 210 thousand tons, then America has about 40 thousand tons. Australia is in third place, followed by Vietnam and Myanmar.

— And what place does Russia occupy in this market?

— Currently, Russia's share in global production is less than 1%. And what we extract, we don't use inside the country. And we import goods or products of high limits containing rare earth elements.

About 35% of the world's reserves are concentrated on the territory of China. He is also in the first place in the world. But experts are arguing about the second one. It's either Brazil or us. Chinese deposits range from 40 million to 45 million tons, while Russian deposits range from 20-25 million tons. This is about 20-25%, that is, a quarter of the reserves of rare earth metals are concentrated in our country.

— In which industries are rare earths in demand now?

— Green energy, electronics, electric cars, scooters, quadrocopters and so on are in the first place now. These metals are found in the phosphors of mobile phone screens, headphones, and speaker magnets. There are few of them, but when tens of millions of such products are produced, demand increases. The second most important consumer is the defense industry. In Russia, the oil industry ranks third. These are catalysts for oil refining. Metallurgists use these elements to alloy steel and produce special steels. In optics— it is used for polishing glasses. A very important application as catalysts in the automotive industry for the production of machines that meet Euro-6 and Euro-5 standards related to exhaust emissions.

"Demand is growing noticeably, and the main driver of this is electric vehicles and wind power"

— How is global demand for rare earths changing?

— It is growing noticeably, and the main driver of this is electric vehicles and wind energy. The elements are needed for electric car engines. The Chinese economy or The United States really needs them because they produce end products, and for this it is important that, as they say, "supply chains are stable."

Five years ago, global production was somewhere around 200-250 thousand tons per year. Now it has reached about 340 thousand tons. Electric vehicles and green energy have become the driver of the 30% jump. If there is another boost, production volumes will start to increase even more. Most likely, the growth will be stable, but small.

— How has the recent increased interest in rare earth metals affected stock prices?

— Although the rare earth element is an exchange—traded commodity, it is still regulated by China. It is possible that some speculators are buying something now. But if China wants to make money from it, it will. And if he doesn't want to, the prices won't change.

— Russia has quite large reserves, but low production. If we want to increase it, where can we start?

— We have an operating deposit in the Murmansk region, Lovozersky GOK. And until 2022, and possibly until 2023, we sold his products. Partially, about 5%, or maybe even less, were kept for themselves. We have the Tomtorskoye field in Yakutia as a promising one. It is quite rich, but the problem is that large capital expenditures are needed to develop it. We need a railway and electricity. Since it's in the center of Yakutia, it's quite difficult. Everything will depend on where we sell it later. Recently, many foreign markets have been closed to us, and domestic consumption is too low.

If a system is built, as in China, which, at the expense of the state or private business, begins to meet the demand for end products (for example, for the creation of quadrocopters, telephones or wind farms), then the rest of the business chain will be built within the country to cover this demand. So far, we have the opportunity to produce only a semi—finished product - concentrate, then we can get these elements from it, and then we have nowhere to use it.

Lovozersky GOK concentrate, of which we receive 2.5 thousand tons, costs about $5 per 1 kg. And if you isolate neodymium from it, it costs about $50 per 1 kg. The question is whether consumers will be willing to buy this final product from us, rather than concentrate.