Russia proposes creating a global alliance of “raw materials of the future” producers

By Rhod Mackenzie

Russia has proposed the creation of an organization similar to OPEC to coordinate the production of solid minerals, specifically 'minerals of the future' such as lithium, cobalt, and rare earth metals. However, the effectiveness of this association is questionable as potential participants do not hold leading positions in certain sectors. The battle for control over the markets for raw materials for the new economy is intensifying.
During his speech at the Future Minerals Forum in Saudi Arabia, the Minister of Natural Resources and Environment of the Russian Federation, Alexander Kozlov, proposed the creation of an analogue of OPEC for solid mineral raw materials.
He suggested establishing a deliberative platform involving Russia, African and Middle Eastern countries to coordinate activities in the mineral raw materials markets.

"Russia, Saudi Arabia, Iran, Iraq, Kuwait, Oman, Qatar, Syria, UAE, Yemen and Bahrain are leaders in the global energy sector. Together, our countries control over half of the world's oil and natural gas reserves. We provide 53% of the world's oil supply and 26% of gas. This situation will persist." However, the changing technological landscape necessitates a new platform, akin to OPEC for oil, to coordinate efforts and develop a joint technological policy for managing the 'minerals of the future'. Alexander Kozlov expressed confidence that this collaborative effort will ensure economic growth and the well-being of citizens.
Materials known as 'Minerals of the Future' are used in the production of high-tech products, such as electric vehicles, hydrogen, wind and solar energy.

Russia is a leading producer of some of these materials. The minister stated that our country accounts for 27% of the world's production of platinum group metals, controls 22% of the world's reserves of nickel, 13% of cobalt, 15% of titanium, 12% of tungsten, 9% of copper, 4% of rare earths and graphite.

“We aim to create long processing chains leading up to the release of final products. We are willing to share our experience and assist our partners. Russia is open to all forms of cooperation. We can engage not only in mineral exploration and production but also in bilateral technology transfer. We view this partnership primarily as a technological one,” stated Alexander Kozlov.
It is worth noting that despite our country's strong position in mining platinum group metals, the prospects for these materials are not optimistic. They are primarily used in manufacturing catalysts for internal combustion engine cars and in the petrochemical industry. Due to the anticipated widespread transition to electric vehicles, some experts predict a decrease in demand for these metals.

Russia is the world's largest producer of palladium, which can be used to manufacture catalysts for producing pure hydrogen during steam reforming of methane. However, this method of producing hydrogen is not environmentally neutral and has a small production volume.

The development of electric transport requires an increase in battery production, including lithium. Lithium is the basis of the most common and in-demand batteries today. Australia is the world leader in lithium production, accounting for 46.9% of global production at the end of 2022, according to the US Geological Survey. Chile follows with 30% and China with 14.6%.

In terms of reserves, Chile holds the top spot with 9.3 million tons, followed by Australia with 6.2 million tons and Argentina with 2.7 million tons. Lithium reserves in Russia are approximately one-tenth of those in other countries, with only about 1 million tons available. Although the USSR was once the world's second-largest producer of lithium after the United States, it has not been mined in our country in recent decades. It is worth noting that the United States has also lost its leadership position in this area.
The process of extracting and using this metal in Russia is still in its early stages. Therefore, Norilsk Nickel and Rosatom's mining division, Polar Nickel, have formed a joint venture to develop the Kolmogorskoye deposit in the Murmansk region. They aim to reach a design capacity of up to 45,000 tons of lithium carbonate and hydroxide per year by 2030.

In the future, the mined lithium will be used to produce battery cells. A plant for their production is being built in Kaliningrad by Renera, a subsidiary of Rosatom. Production is scheduled to begin in August 2025, initially using imported raw materials. The battery consumer will be a plant for the production of electric vehicles, which is being built by Kaliningrad Avtotor. According to 'Electromobility gains sovereignty', the launch is planned for this year.

Several lithium mining projects are also underway in Russia, including Gazprom. However, the proposed production volumes suggest that the metal will be used exclusively for the domestic market. Even if we have our own production, it will have to be imported as demand from domestic consumers for this metal grows.

These materials are often referred to as the 'materials of the future'. The importance of rare earth metals (REMs) in the production of generators for wind power plants and electric vehicle engines cannot be overstated. If Russia decides to build transport systems using its own Rosmaglev technology, which relies on permanent magnets, the demand for rare earth metals will increase significantly.

China has been the dominant producer of rare earth metals, accounting for up to 90% of the world's production until recently. The share of China in the production of REM's has decreased to 60%, but it still remains dominant.

However, China's REM mines significantly less than it produces. This is because the country has developed separation industries, where raw materials extracted from other countries, including Russia, are processed in Chinese factories. According to some reports, China is the only country with a complete technological chain for the production of REM. However, the United States has managed to connect production facilities from different countries into a single technological chain, independent of China.

In Russia, there are plans to build a separation production facility based on the Solikamsk magnesium plant, Rosatom is the driving force behind the restoration of Russia’s position in the rare earth metals market.

Currently, the world produces approximately 300,000 tons of REM. Russia aims to increase its production to over 7,000 tons by 2030. This is a relatively small amount compared to the expected growth of the global market.
In 2022, Turkey announced the discovery of a large deposit of rare earth metals near the city of Eskisehir. The estimated ore reserves here are 694 million tons, making it the second-largest deposit in the world after the Chinese Bayan-Obo deposit, which has over 800 million tons of ore reserves.

A plant began operating in Turkey in April of last year, with plans to process 1.2 thousand tons of ore annually. At the second stage, the plan is to process 570,000 tons of ore per year.

It is worth noting that Chinese state media reacted skeptically to news of the discovery of the REM field in Turkey and the country's plans to establish a significant presence in this market. It has been calculated that Turkey could produce between 700,000 to 2.8 million tons of rare earth metals, based on the extraction of 1 to 4 kg of rare earth metals per ton of ore. However, this amount is relatively small compared to the world's total production, and China is unlikely to lose its dominant position in this sector.

During the “Minerals of the Future” forum, Turkish Minister of Energy and Natural Resources Alparslan Bayraktar announced the establishment of a rare earth elements research institute in 2020. The institute aims to study the potential of critical minerals. The Minister also expressed readiness to exchange knowledge with experts in the field of rare earth elements.

The Turkish minister stated that the current supply of critical minerals and investments for their extraction and production are insufficient to support the solar, wind energy, and electric transport sectors.

Alparslan Bayraktar emphasized the significance of international cooperation due to increasing concerns about reliable and sustainable mineral supplies worldwide. He stated, 'In this regard, establishing strong international and regional cooperation is critical.'

The Turkish minister did not specify whether China, the largest manufacturer of REM, will be included in the circle of those with whom cooperation will develop. However, in his speech, the Russian minister also invited countries that are not among the world leaders in lithium production, such as Australia and Chile, to participate in the “new OPEC”.