According to Russian newspaper Kommersant, ICT Group, controlled by Russian tycoon Alexander Nesis, and state-owned company Rostec will aim to put the deposit, one of the largest repositories of rare earth elements in the world, into production.

Under the deal, ICT Group will take a controlling 50 percent interest in the project, with Rostec owning 25 percent and the remaining 25 percent controlled by an as-yet unnamed investment fund.

The 250-square-kilometer field, located in the Russian region of Yakutia, is estimated to contain 150 million tonnes of rare earths reserves, including ytrium, niobium oxides, scandium and terbium.

International Business Times reported that the deposit contains a whopping 12 percent of the world’s total rare earth reserves, with proven reserves of 154 million tonnes, and possible reserves exceeding all the rest of the world’s reserves combined.

Assuming that the deposit could be turned into a producing mine or set of mines, it would most certainly pose a challenge to the current rare earth monopoly enjoyed by China, which produces roughly 95 percent of the rare metals used in everything from missile guidance systems to cellular phones and renewable energy applications.

Russia currently only accounts for about two percent of global production and consumption of rare earths; putting the Tomtor deposit into production would see Russia putting significantly more skin in the game.

The only two companies currently in a position to challenge China are Lynas (ASX:LYC), which recently began processing rare earths at its plant in Malaysia shipped from its Mount Weld mine in Australia, and Molycorp (NYSE:MCP), which processes rare earths from its Mountain Pass mine in California.

Meanwhile China, which in 2010 launched a campaign to curb illegal over-production of rare earths elements that was depressing the prices of rare earth oxides, admitted on Friday that its program is not working.

Su Bo, China’s vice-minister of industry, said on the ministry’s website that ”Problems in the industry that have accumulated over the long-term have still not been fundamentally resolved,” adding the following explanation:

“Unplanned exploitation and production of rare earths has affected the normal workings of the market, and illegally-produced rare earth products have reached downstream consumers through a variety of channels or been smuggled abroad, leading to a continuous decline in prices.”

Rare earth oxides enjoyed record prices in 2011 but have since slumped, mostly due to the global economic slowdown, especially in China which is both the world’s largest REE consumer and producer. Overproduction in China has exacerbated the situation.


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Rare earth prices have remained sluggish recently, with lanthanum and cerium unsellable, causing profitability of rare earth to decrease sharply.

Rare earth prices reversed their increases in August 2011. As demand for magnetic materials improved since early 2013, didymium prices stabilized, and once rebounded in Q1, hovering around RMB 350,000/mt. Gao Yuxin, an analyst of Ruidow, reported that mainstream prices of didymium were between RMB 370,000-375,000/mt last week, with traded prices lower. That is because didymium supply was ample, but purchases were modest due to low prices and decreasing orders and enterprises cutting production.

Neodymium oxide prices once exceeded RMB 1.40 million/mt in 2011.

The Ministry of Land and Resources decided to execute inspections on rare earth exploration and construction project rare earth recycling.

The MLR set three targets in the Notice Regarding the Implementation of Inspections on Rare Earth Exploration and Construction Project Rare Earth Recycling recently. First, it will inspect illegal rare earth exploration, putting emphasis on illegal mining and exploration without permits, and inhibiting mines that have been closed in previous mineral inspections from restarting. Second, it will strictly inspect rare earth mine exploration, investigating illegal mining. Third, it will inspect rare earth recycling, examining railway, highway, industrial zone, city and town expansion rare earth recycling projects, and distribution of those projects, eliminating illegal recycling, and rectifying the projects which do not meet environmental protection and safety requirements.

The Notice affirms major rare earth producing regions will make inspection plans and implement inspections during May and June, rectifying and reform immediately once any problem is found out. Provincial land and resources departments will examine the inspections to assure the inspections produce concrete results.

The Notice emphasizes the inspections will be implemented by local governments, with the cooperation with environmental protection and safety supervision departments, standardizing rare earth exploration and construction project rare earth recycling, and improving long-term mechanism.


Rare Earth Supplier: Chinatungsten Online - http://www.chinatungsten.com
Tel.: 86 592 5129696; Fax: 86 592 5129797
Email: sales@chinatungsten.com
Tungsten Picture Center: http://picture.chinatungsten.com
Tungsten Video Center: http://v.chinatungsten.com
Tungsten News & Tungsten Prices, 3G Version: http://3g.chinatungsten.com

Surveys revealed that rare earth prices fell noticeably during the past week.