MOSCOW, June 11. /TASS/. Russia may become a leader in extraction and processing of rare earth metals (REM), if it manages to create infrastructures and comfortable business conditions in the Arctic, while the global industry will face a deficit in REM in 2030, Russian Academician, Doctor of Geology and Mineralogy Nikolay Pokhilenko told TASS.

At the International Arctic Forum in April, Russian President Vladimir Putin said the creation of a rare earth metals processing industry in the Arctic is one of priorities in the region's development. The work will be organized under the federal project "Geology: Legend Rebirth."

"The demand for rare earth metals will grow sharply, and the mining industry, despite China's mining capacity, will progressively lag behind demand. This is where we, in addition to internal needs, will have the opportunity to enter the global market. The Russian Arctic can satisfy part of the global demand for rare earth metals after 2030," the expert said.

The state plays a leading role in creating infrastructures and favorable conditions for businesses, which, in turn, will incur high costs for exploration, processing and enrichment. "Production at the Tomtorskoye field in Yakutia requires building appropriate infrastructures and roads. Presently, nothing is there," the academician said.

"In my opinion, a key to problems that currently hinder development of the Arctic's largest deposits is up-to-date technologies for REM enrichment, as well as development of logistics, primarily of the Northern Sea Route. In order to attract investors, it is necessary to create a clear and transparent support, using international experience and creating a system of benefits and direct subsidies," said Alexander Vorotnikov, coordinator of the Arctic Development Project Office's Expert Council, Associate Professor at the Russian Presidential Academy of National Economy and Public Administration (RANEPA).

Minister for Development of the Far East and Arctic Alexey Chekunkov told TASS the state had been creating conditions to build up rare metals production. For example, the Ministry of Natural Resources and Environment has initiated to cut by 10 times the tax on extraction of rare minerals, updated methods to calculate initial payments for auctions thus cutting them significantly. The lower initial payment for types of rare materials, including rare and rare-earth metals, has been formalized legally. "The Russian Arctic Zone offers unprecedented tax benefits for businesses: federal part of taxes like income tax, land tax and property tax has been lowered to zero for 5-10 years," the minister said.

Leading regions

Rosneft, which is Vostok Engineering's owner, holds a license for the Tomtorskoye field until August 2034. It will develop this one of the richest deposits in the world. Estimated resources make 154 million tons of ore with very high contents of 10 rare earth elements oxides.

Earlier, Yakutia's Governor Aisen Nikolaev said he expected work on the project to begin in the near future. According to him, the company intends to extract niobium and other REM for export as well as to create new industries inside the country.

Yakutia's scientists have suggested creating a single rare earth cluster, which, in addition to the Tomtorskoye deposit, would unite a project to extract lithium from hydromineral raw materials (Udachnaya tube brines) and a project to develop the Agylkinskoye deposit to produce tungsten concentrate. According to the governor, in 2025, under the Geology: Legend Rebirth project, geological exploration will take place in Yakutia's eight districts, and by 2035, this work will be organized in the region's 20 districts.

The Murmansk Region also plans a REM deep processing cluster, the minister continued. It is due to include projects to develop rich and promising deposits in the Lovozersky District and in the Afrikanda massif of perovskite-titanomagnetite ores. "The implementation of these projects will lay the foundation for a full production cycle in the region, thus to localize production in the region as much as possible, creating added value at every stage - from the raw materials extraction to production of finished products," the local Ministry of Arctic Development and Economy told TASS.

The region's first and strategically important project in this industry is the development of the Kuljokskaya Square zircon-britolite ore deposit, the installation of a special crushing and screening complex, and the construction of an enrichment plant in the Lovozersky District - Kuljok-Rare Earths by the Arsenal Company. Investments will amount to 10 billion rubles ($126 million). Pilot ore processing is due to begin in 2026.

"The Geology: Legend Rebirth project means a significant potential to reveal the Murmansk Region's geological stock. At the moment, we have been working with Rosnedra (Russia's Federal Agency for Subsoil Use) on a program for participation in the project to maximize this potential for the industry's development, which meets our strategic interests," the ministry added.

The outlook

Earlier, Russian Deputy Prime Minister Dmitry Patrushev reported investments in exploration in Russia hit a record of 450 billion rubles ($5.7 billion) in 2024. According to the Ministry of Natural Resources and Environment, 175 billion rubles ($2.2 billion) were invested in exploration, including in the Arctic. According to Rosnedra, reserves of rare and rare earth metals in the Arctic are accounted for in 30 deposits and take 75% of all reserves in the Russian Federation. However, scientists say, the country has significant potential for additional exploration even of deposits that have been discovered already.

The Russian Arctic Scientific and Educational Center told TASS the Arkhangelsk Region also has deposits rich in rare earth metals, in particular at the Pavlovskoye deposit on Novaya Zemlya, or near the kimberlite pipes at Europe's only diamond deposits - the Lomonosov and the Grib deposits.

"Here, it is necessary to make economic calculations, possible studies on how effective this is. Everything will depend on processing and enrichment of these ores, which is quite expensive in high latitudes. Given there is no energy infrastructure, large investments are required there. But ore enrichment and extraction of these metals' concentrate will give a new impetus to development of the Arkhangelsk Region's industrial production potential," the center's Scientific Director Marat Yeseev told TASS.

The experience of other countries

Associate Professor Vorotnikov suggested using foreign experience to speed up the process, including adopting US technologies for additional exploration, and measures of state support and economic incentives - from China.

"Chinese state support measures begin at the investment project stage, and the country offers incentives to existing industries. For example, China has import duties and VAT refund mechanisms: local industries can import REM ores duty-free and reimburse 13% when exporting high-grade products. In my opinion, we could use the offtake contract tool of interaction between the state and businesses," the expert said. Under such a contract, goods containing REM (storage devices, permanent magnets, catalysts, and so on) would be of interest to the world, primarily to Asian and Middle Eastern counterparts, he added.

Russia also has successful support measures. "They are not direct subsidies, of course, but we have an agreement on the protection and promotion of investments (NWPC), we have special investment contracts. [Business] residents of [advanced-development territories] enjoy tax benefits, they can take loans from the [Industrial Development Fund]. The government subsidizes R&D, and REM projects enjoy mineral extraction tax benefits. However, they practically are not applicable to existing enterprises. They work only at new ones," he added.