Rare Earth Exchanges

Putin Not Happy About Rare Earth Element Delays at Tomtor Project

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Highlights

  • Putin criticizes Tomtor deposit operators for delaying development of a strategically important rare earth and niobium resource in Yakutia.
  • The Tomtor project is one of the world’s largest rare earth deposits, with high-grade ore estimated at 11.4 Mt.
  • The project has potential for the defense, technology, and electric vehicle industries.
  • Russia aims to reduce dependence on Chinese rare earth metals by developing the Tomtor project.
  • Development of Tomtor has global implications for critical mineral supply chains.

President Vladimir Putin accused the operator of Tomtor, Russia’s largest, rare earth element (REE) deposit, of delaying the deposit’s development, suggesting it should either raise investment or seek help from third parties, including the state according to a Reuters report.

What is the Tomtor project?

According to SRK Consulting (opens in a new tab), the Tomtor project is one of the world’s premier deposits of niobium and rare earths in terms of scale and grade. The deposit is located in the north-west of the Russian republic of Yakutia.  The license is held by a subsidiary of ThreeArc Mining Ltd.

The consultancy reports some challenges. “Due to the site’s remote location and the complex processing methods required, it is planned to transport the ore several thousand kilometers, via ice roads, barges, ships, and rail, to the planned hydrometallurgical processing facility at Krasnokamensk (in south-east Siberia, near the border with China).”

What’s the geological characteristics?  The complex solutions required for moving the ore to Krasnokamensk and then extracting niobium oxide and REE products, are economically viable because of the exceptionally high grade of the deposit. The Ore Reserve estimate as at end of 2019 comprises 11.4 Mt of open pit ore, at 6.0% Nb2O5 and 14.5% Total Rare Earth Oxides.

SRK Consulting (opens in a new tab) reviewed the various studies on the project and prepare an independent  Ore Reserves and Mineral Resources estimate (opens in a new tab) of the in accordance with the guidelines of the JORC Code, the first such estimate under an international reporting system. For this assignment SRK assembled a team of specialists with knowledge of the mineralization, mining in the region, transportation across ice-roads and the processing flowsheet. Specialists from SRK visited the Tomtor site in 2019.

A Feasibility Study (opens in a new tab) for the project is in progress. Further information about the Tomtor project is available from the Three Arc Mining or Polymetal websites.

Putin’s Commands

Nastya Lyrchikova and Gleb Bryanski report on Tomtor, located in the north of the Siberian region of Yakutia, is a key project in Russia’s plans to boost output of the metals that are used in the defense industry and in making mobile phones and electric cars, to reduce reliance on imports from China.

According to multiple accounts Putin told First Deputy Prime Minister Denis Manturov during a meeting in the Kremlin “those business structures that took over these deposits many years ago are not investing. We need to somehow talk to them and resolve this issue.”

“Either they invest, or they establish relationships with other companies and the state. This is a strategically important resource that the state needs now,” Putin added.

Russia was preparing to invest $1.5 billion in REE, part of a bid to transcend even China’s position by 2030. But then the Ukraine conflict occurred, with Russia’s invasion into that nation.

Other countries, including the United States, are also trying to curb their reliance on China, which controls 95% of the global production and supply of rare earth metals.

Businessman Alexander Nesis (opens in a new tab), a former shareholder in Polymetal, a major producer of gold and silver, used to own a 75% stake in a firm called ThreeArc Mining, the operator of the project, via his IST group of companies reported Reuters. At one point Polymetal had a 9.1% stake in ThreeArc Mining.

However former manager of IST, Vladislav Resin, now operates the project post the Russia’s invasion of Ukraine.

According to Reuters the reporters communicated with a Polymetal spokesman who said the company fully exited the project in June. In 2023, Polymetal wrote off $24 million in losses after the project’s development was put on hold.

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