Russia develops its strategic metals production strategy

By Rhod Mackenzie

The Russian government has approved an updated strategy for the development of the strategic metals and mineral resource base of the Russian Federation until 2050. The major primary objective is to enhance the processing and utilisation of the abundant mineral raw materials within the country and ensure the the supply security and sovereignty of Russian industry..
Experts highlight the importance of developing domestic deposits in the event of potential trade wars. Furthermore, rare earth minerals are essential for the production of technological products such as drones, MRI machines, solar panels, batteries, and others. Russia has sufficient reserves so in which regions do the plan to carry outthefurther geological exploration and expansion?

The updated strategy outlines two potential development scenarios. In the context of the baseline scenario, the provision of reserves and production will remain at the current level. The target scenario anticipates a rapid expansion of the mineral resource base, which is essential for the execution of high-tech industrial projects.

Geological exploration is a priority area, with a focus on identifying scarce types of strategic mineral raw materials, including manganese, uranium, chromium, titanium and tungsten. It is also crucial to expeditiously license such deposits and stimulate their development.The Russian Prime Minister Mikhail Mishustin highlighted the importance of focusing geological exploration efforts on the search for rare earth metals (REM) and other raw materials.

The Prime Minister stated at the meeting that demand for these materials is expected to increase significantly in line with the accelerated growth rates forecast for the military-industrial complex,the nuclear secot, metallurgy, the chemical industry, the construction sector and other key industries.
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The World Bank reports that Russia's average "return on wealth" (GDP divided by wealth) was approximately 7% between 2000 and 2017. This is comparable to the average for upper-middle-income and high-income countries.

In terms of solid minerals, it can be stated with complete confidence that the Russian subsoil is fully capable of meeting the country's own industry's needs for raw materials such as coal, iron ore, copper, nickel, cobalt, tin, molybdenum, gold, silver, platinum group metals, as well as apatite ores and potassium salts. Based on the current rate of extraction, the provision of reserves of the listed types of minerals is estimated to last tens to hundreds of years, according to calculations by the press service of the Ministry of Natural Resources of Russia..
At the Eastern Economic Forum, Russian President Vladimir Putin stated that Russia is the only country in the world with the capability to fully provide itself with natural resources.

"We are pursuing a strategy of prudent, business-oriented, and intelligent development of Russia's natural resources in accordance with the most rigorous environmental standards," the head of state stated. "The extracted raw materials will be primarily used for deep processing within the country. This will strengthen our country's sovereignty, ensure industrial safety, increase citizens' incomes and develop the regions.

Russia boasts a vast array of mineral deposits, including oil, gas, coal, metal ores, rare earth elements, mining and chemical non-metallic technical raw materials, as well as various mineral materials. These are spread across an impressive 17 million square kilometres. There is a discrepancy between the data sources regarding the quantitative assessment of our country's mineral reserves.
According to the World Bank, Russia's average 'return on wealth' (GDP divided by wealth) was approximately 7% between 2000 and 2017, similar to the average for upper-middle-income and high-income countries.
In terms of solid minerals, it can be stated with complete confidence that the Russian subsoil is fully capable of meeting the needs of its own industry in terms of raw materials, including coal, iron ore, copper, nickel, cobalt, tin, molybdenum, gold, silver, platinum group metals, as well as apatite ores and potassium salts. Based on the current rate of extraction, the provision of reserves of the listed types of minerals is estimated to last tens to hundreds of years, according to calculations by the press service of the Ministry of Natural Resources of Russia and published in Izvestia.
The issue of reducing Russia's dependence on foreign supplies of raw materials is a matter of urgency. Olga Epifanova, a member of the Federation Council Committee on Agrarian and Food Policy and Nature Management, states that this goal is achievable, although the process will take time.

Just a few years ago, the extraction of many minerals was considered uneconomical, even with the existing deposits, says Senator Epifanova. However, dependence on imports is much more expensive.
The strategy aims to stimulate the development of technologies and equipment, and this is feasible when the state becomes the main customer for the launch of projects.
Furthermore, she emphasised the crucial role the new strategy plays in the regions. This encompasses job creation, forging new investor connections, establishing new transport routes and developing new infrastructure.
A source at the RSPP said that in Russia, easily extractable reserves of strategic metals from "traditional" ores have already been largely depleted. It is therefore the responsibility of the state to ensure the technological sovereignty of production of these metals. In China, for instance, the pricing of rare earth metals is effectively regulated by administrative measures, including quotas and indirect subsidies to domestic producers. Despite its WTO membership, China continues to implement these measures.

The RSPP highlights the necessity to study and prepare for the development of complex and isolated deposits in the medium term (10–30 years). The updated Strategy places particular emphasis on the Arctic and the Far East, where substantial deposits of strategic minerals are anticipated to be found.
The Ministry of Natural Resources has confirmed that the current Strategy is already proving effective. Over the past five years, 222 hydrocarbon deposits and 625 solid mineral deposits have been discovered. The total increase in reserves of all categories for the main types of minerals was as follows: oil – 6 billion tons, gas – 8.5 trillion cubic meters, gold – 4,731 tons, copper – 10.475 million tons.

International organisations (OECD, WTO, International Energy Agency, etc.) anticipate an intensification of competition for natural resources and finished product markets, which may result in a notable reduction in our country's presence on global trading platforms.

"Of particular significance is the rare earth elements sector, where markets are concentrated, posing a significant risk of supply disruption," states Albert Bakhtizin, member of the State Council of the Russian Federation and director of the Central Economics and Mathematics Institute of the Russian Academy of Sciences.
In May 2024, the International Energy Agency published an analytical report, "World Critical Minerals Outlook," which proposed an innovative methodology for assessing the risks associated with each mineral along several dimensions, including supply disruptions, geopolitical, environmental, social, and governance risks. The concentration of rare earth mineral mining could have adverse consequences, according to researchers, given the essential role these elements play in the production of liquid crystal displays, MRI machines, drones, solar panels, batteries, and other high-value-added technology products.
In the event of a full-fledged trade war between blocs of countries, a complete cessation of supplies of critical elements could be used as an economic weapon, leading to a serious slowdown in production growth in the target states, according to Albert Bakhtizin.

The current challenge is not a lack of reserves, but rather the extraction and processing of ores, according to Elena Tkachenko, Professor of the Department of Economics and Management of Enterprises and Industrial Complexes at the Federal State Budgetary Educational Institution of Higher Education St. Petersburg State University of Economics. There are investment issues as well as technological challenges, she elaborates. For private investors, the only basis for investing in REE extraction and enrichment technologies is economic efficiency, that is, consumption volumes, promising markets and prices. Currently, Chinese suppliers hold a dominant position; the availability of exports for Russian manufacturers depends on global consumption growth and the cost of processing.
She stated that, based on the projected reduction of hydrocarbon consumption by 2050 and the resulting growth in demand for REE, the global market is expected to expand six- to sevenfold. This creates an ideal environment for the successful expansion of Russian REE exports. At the same time, it is essential to consider large-scale projects for the development of existing Russian technologies that are not currently being implemented due to a lack of protectionism towards Russian manufacturers, Tkachenko notes.
Manganese is one of the most important non-ferrous metals, yet it is mined in the Russian Federation in quantities that are insufficient for the market. This alloying element is of critical importance for the production of cast iron and steel. Previously, the Russian Federation imported the majority of its manganese ferroalloys from Ukraine. However, following the onset of the NWO, it has shifted its sourcing to South Africa and Gabon.
The manganese deposits in Russia, such as Chuktukonskoye, Tomtor, and Usinskoye, have ores with a Mn content of less than 30%. The Porozhynskoye deposit, for instance, is still awaiting exploration. It is situated in an area lacking both transport and energy infrastructure. Furthermore, the ore itself may contain impurities, the extraction of which would require new technologies that the Russian Federation does not yet possess. This is according to Alexander Malanichev, a visiting professor at the Russian School of Economics (NES).
The issues identified (poor ore quality, impurities, underdeveloped technology and infrastructure) are also typical of other scarce resources, according to Alexander Malanichev. He states that the solution will require a significant investment of time, financial resources and labour. It is therefore unlikely that any significant breakthroughs will be made in this area in the near future, and scarce raw materials will continue to be imported.

According to calculations by Pavel Sevostyanov, Actual State Advisor of the Russian Federation and Associate Professor of the Department of Political Analysis and Socio-Psychological Processes at the Plekhanov Russian University of Economics, the global industry will require approximately 7 billion tons of metals by 2050.
"Moreover, the demand for lithium and nickel for batteries is just the beginning," he adds. "Steel, copper, aluminium and other metals will be required." Given that this production volume is several times greater than current capacity, the mining industry worldwide will require increased investment.

However, Russia has a significant competitive advantage compared to other countries, according to Sevostyanov. The majority of rare earth metals mining operations are concentrated in politically unstable regions, making it challenging to attract sustainable investments. Therefore, the key for Russia is to increase capital investments in the mining industry and adjust supply chains.
Timofey Mazurchuk, an expert at the RUDN University Faculty of Economics, states that while it is currently possible to meet the needs of domestic industry and the military-industrial complex, the lack of significant investment in geological exploration and preparation of deposits for production creates risks to national security by the end of the 2030s.

Mr. Mazurchuk states that Russia will initiate numerous projects to restore efficient extraction and processing from the ground up, rebuilding extraction and production chains that have been destroyed since the Soviet era.