Russian oil producer Rosneft has acquired the Tomtor rare earth metal deposit in the north of the Yakutia region in Siberia by taking complete control of Vostok Engineering, the project operator, as per the official state registry of Russian companies.
The move follows President Vladimir Putin’s directive to expedite the Tomtor field’s development, reported Reuters.
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The acquisition, completed on 20 May, is a step towards reducing Russia’s reliance on imports, particularly from China.
In November last year, Putin criticised the operator for stalling the project and suggested it should either increase investment or seek assistance, including from the state.
Tomtor is crucial to Russia’s ambition to enhance its production of rare earth metals, which are essential for manufacturing mobile phones, electric cars and various defence industry components.
Prior to the conflict in Ukraine, Russia had planned to invest $1.5bn (Rbs119.25bn) in rare earth minerals to become the second-largest producer after China by 2030.
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By GlobalDataThe US and other nations are similarly looking to decrease their dependence on China, which currently dominates 95% of the global production and supply of these metals.
Russia is estimated to hold the world’s fifth-largest reserves of rare earth metals at 3.8 million tonnes (mt), according to the US Geological Survey.
The country’s strategy for the sector aims to secure up to a 12% share of the global market by 2030, positioning it among the top five producers.
Businessman Alexander Nesis, through his IST group of companies, previously held a 75% stake in ThreeArc Mining, the initial operator of Tomtor.
Polymetal, a gold and silver producer, formerly owned a 9.1% share in ThreeArc Mining.
Following the onset of military actions in Ukraine and subsequent Western sanctions, control passed to Vladislav Resin, a former manager at IST, before Rosneft’s acquisition. Last month, Russian state bank VEB announced plans to invest more than Rbs1.1trn into the development of the Baimskaya copper mine in the Chukotka region.
