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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