Putin scolds Tomtor rare earth deposit’s operator over development delays

Tomtor, located in the north of the Siberian region of Yakutia, is a key project in Russia’s plans to boost output of the metals that are used in the defence industry and in making mobile phones and electric cars, to reduce reliance on imports from China.

“Those business structures that took over these deposits many years ago are not investing. We need to somehow talk to them and resolve this issue,” Putin told First Deputy Prime Minister Denis Manturov during a meeting in the Kremlin.

“Either they invest, or they establish relationships with other companies and the state. This is a strategically important resource that the state needs now,” Putin added.

Before the Ukraine conflict, Russia planned to invest $1.5 billion in rare earth minerals, striving to become the biggest producer after China by 2030.

Other countries, including the United States, are also trying to curb their reliance on China, which controls 95% of the global production and supply of rare earth metals.

Businessman Alexander Nesis, a former shareholder in Polymetal, a major producer of gold and silver, used to own a 75% stake in a firm called ThreeArc Mining, the operator of the project, through his IST group of companies.

Polymetal used to own a 9.1% stake in ThreeArc Mining.

Following the ownership change after the start of Russian military action in Ukraine, and subsequent Western sanctions on Russian businesses, the operator of the project is now controlled by IST’s former manager Vladislav Resin.

Resin’s company TM-Energo Finance did not immediately respond to a request for comment.

Polymetal’s spokesman told Reuters that the company fully exited the project in June. In 2023, Polymetal wrote off $24 million in losses after the project’s development was put on hold.