Russia’s oil major Rosneft takes over Tomtor rare metals deposit in the Far East

Russian state-owned oil and gas company Rosneft became the owner of Vostok Engineering, the most recent license holder for the development of the Tomtor deposit of rare metals and rare earth elements, as follows from the May 20 entry in the Unified State Register of Legal Entities.

Tomtor, or Tomtorskoye, in the Republic of Sakha (Yakutia), Russia's Far East, represents an untapped niobium and rare earth metals project. It is not clear though, whether Rosneft has taken over the whole deposit or only one or two of its sections.

According to earlier estimates, Tomtor's Buranniy section alone holds 11.4 million-13.2 million mt of ores available for open-pit mining with 5.9% or 780,000 mt of niobium oxide, and 15% or 1.7 million-2.0 million mt of rare earth oxides.

Rosneft was not available for comments.

The transfer of the project to a state oil company signals that REMs do not interest proper mining majors or investors. There is no urgent need for REMs, domestic consumption of which is estimated at 1,400-1,500 tons per year, but the government wants to show it cares about developing the respective industry, according to a Moscow analyst, who wished to remain anonymous.

Lovozersky GOK that processes loparite ore from the Karnasurt mine in Murmansk oblast is currently the only site in Russia from which some REMs are extracted, and is owned by the state corporation Rosatom.

Tomtor is considered the next most promising REMs deposit due to its higher-than-average metals content in the ore. It is key for the country to boost domestic output of REMs, if not to meet the government's target of 7,000 mt/year.

In November 2024, President Vladimir Putin said the Tomtor right holders had not been investing in the deposit for years and called on the developers to do what was required to get the delayed project into production. Putin advised them to partner with other companies, if they could not do so single-handedly. The Tomtor license was awarded in 2014, effective through 2034.

Various factors have impeded rare earth metal mining in Russia, including the country's insufficient technical development, its severed ties with the EU, which could have been the primary end-user market for that production, as well as minuscule domestic demand.

"Now the task is to deliver ore [from Tomtor], and Rosneft will do it for sure. [Igor] Sechin [Rosneft's CEO] does not fail orders," said the analyst, who expects Tomtor to pilot mining as early as 2027.

First ore batches from the site could be processed in China, in line with common practice, or at Rosatom's Solikamsk Magnesium plant, provided a separate beneficiation shop is installed specifically for Tomtor's ore, according to the analyst.