With any demand, RM and REM will not go into the area of unprofitability.

According to the Development Bank of Kazakhstan JSC, exports of some rare metals increased by 75% in the first half of this year. After China reduced its presence in the RM and REM market, high-tech manufacturers began to look for alternative suppliers. However, in order for Kazakhstan to become a significant player in the REM market, serious investments in deposits and special technologies suitable for local complex ores are needed. Abdrasul Zharmenov, General Director of the RSE "National Center for Integrated Processing of Mineral Raw Materials of the Republic of Kazakhstan", told the correspondent of "K" about Kazakhstan's potential.

– Abdrasul Aldashevich, the production of rare and rare earth metals in Kazakhstan is going through difficult times. The Irtysh Chemical and Metallurgical Plant is not working, there is no vanadium pentaxide at Aluminum of Kazakhstan, only gallium remains, vanadium and scandium are produced intermittently at the Ust-Kamenogorsk titanium-magnesium combine, Kazzinc produces only cadmium and thallium, although previously they also extracted indium, gallium, germanium and other metals. Can you name at least one recently launched or upcoming production facility?

– I cannot name any new projects in the field of production of rare and rare earth metals at existing enterprises – there have been no changes there for at least five years. As a positive example, I can mention the Balasauskandyk project, which was launched in the second half of last year.

This is a polymetallic deposit containing vanadium, uranium, and rare earth metals. It is owned by the British Ferroalloys Resource. She founded the Balausa company here, which produces on a pilot scale, at the level of 30 thousand tons of ore per year. According to our technology, about 50-60 tons of ammonium metavanadate are produced from it, a product for the production of vanadium pentaxide, which is used in the production of ferroalloys. Other metals are still being stored because serious investments are needed.

In order to bring vanadium production to industrial volumes, at least $50-60 million is needed for the purchase of equipment, reagents, and stripping operations. And in order for the deposit to fully operate at full capacity, so that both uranium and rare earth metals are extracted from it, it takes about $200-300 million.

– Why haven't specific agreements been signed yet?

– Because there are no fully developed proposals on our part. The Kazakh side is just figuring out what is needed for ThyssenKrupp. In addition, the situation is complicated by the fact that many deposits are in private hands, from companies unknown on the market. But they hold these deposits tightly, and so far the state cannot fully put them into circulation.

– Do they need to be redeemed?

– In principle, the law allows it to be taken away, because the owners of the sites do not fulfill their obligations to extract and produce products.

– Why do you think they are slow?

– There are objective reasons. Kazakhstan's rare metal raw materials are complex in composition, and many ores are not very rich, so it is difficult to choose the technology to extract rare elements. Another reason is the lack of contact between technology developers and those who need them. Many mine owners are not metallurgists or scientists, so they simply do not know who to contact for information about mining and production of RM and REM.

There is a widespread opinion that there are no good technologies in Kazakhstan, so they are being sought abroad. But in fact, no one knows our raw materials better than we do. And as far as our raw materials are concerned, we hold a leading position in the world in the field of rare metals.

– Are only foreign companies showing interest in Kazakhstan's rare earths?

– Rare metal deposits are divided into two categories. The first is RM and REM as associated metals extracted in the production of zinc, copper, and lead, as we see at Kazzink or Kazakhmys. The second is independent rare metal deposits. They are not in economic circulation, and they need to be started from scratch. Here, most likely, we should rely only on foreign investments.

– What are the project launch dates under a favorable scenario?

– It takes 3 years to set up production. Of these, half a year is spent on geological exploration. Investors are unlikely to believe historical data from Soviet times. Although I doubt that the data on the main deposits were distorted – in Soviet times, exploration was approached responsibly.

– How likely is the scenario when a large foreign investor from among the consumers of rare earth metals, who was left without raw materials after the reduction in exports of RM and REM by China, enters the deposit and begins to actively develop it?

– This option is very likely. With China's withdrawal from the market, many companies are not sparing investments in raw materials. Our state is also interested in developing rare metal deposits, so it will either take over the sites or negotiate with their owners on the terms of development.

– Was China interested in Kazakh deposits?

– I think, for reasons of market expediency, China will not be accepted as a partner. It is strategically more important to attract to this industry those countries that have not invested so actively in Kazakhstan so far, such as Japan.

– Did domestic companies take the initiative?

– No. It is cheaper for large companies to extract rare elements along the way. There is no need to spend extra money on mining ore.

– Despite the fivefold increase in prices?

– There is a point here: no one knows how long he will last. For example, Kazzinc can extract 23 metals. He's currently extracting nine. Let's say he spends the money to mine these remaining 14 metals. What are the guarantees that prices will not fall? Therefore, large companies that have sufficient profits on the base metal try not to invest in metals with fluctuating demand. However, even in these conditions, practically no RM or REM will go into the area of unprofitability. Of course, profitability may not be the same as that of the base metal.

– What is their ratio, according to your data?

– I estimated that at current prices, the profitability of copper production is about 200%. At the moment of falling profitability for metals with volatile demand (which include RM and REM) It can be 30-40%, and on the rise it can reach 300-400%. In the meantime, these metals are being released in an unrecoverable form. And the numbers are pretty big.

In Soviet times, molybdenum was extracted at Balkhash (Balkhash MMC, part of Kazakhmys –K), for example. Then the demand for it dropped, and no one dealt with it for 10 years. Then demand increased again, and it was mined again. But over these 10 years, $5 billion worth of products have been thrown away in an unrecoverable state.

– Why is it easier to throw away than to establish production?

– Less headaches. There is no need to set up production, sales markets, worry about whether it will work or not, about royalties, or include new metals in the subsoil use contract.

– Kazakhmys reanimated Yuzhpolymetal last fall. They are currently processing lead dust there, extracting osmium-187 and rhenium. Do you think the main purpose of production is rare metals?

– The 100% owner of Yuzhpolymetal is its president Tursynbek Asambayev. And Kazakhmys is working with Yuzhpolymetal because it was not allowed to sell rhenium and osmium-containing lead dust abroad. Currently, Yuzhpolymetal produces about 5-6 thousand tons of lead from 17-18 thousand tons of lead-containing waste. At current prices, they can earn about $15-17 million. And Kazakhmys will not start industrial production of osmium until it is convinced of the sustainability of demand.

Another thing is that a lead factory should not be located in the city center. The akim of South Kazakhstan region has already appealed to the government with a request to stop the plant. However, it is strange that this has been done only now – lead has been produced in Shymkent since the 30s of the last century. And it's hard to say why they started to be outraged only now: either the people have matured, or they are putting pressure on Kazakhmys.

– According to our data, now Yuzhpolymetal also produces cadmium, thallium, tellurium and indium from ore supplied from Russia, Iran and Poland.

– Really? If this is true, they should not be clearing bankruptcy, but swimming in gold.

– Zhezkazganredmet, which was your "daughter" in 2001-2002, until recently sold rhenium and osmium itself, which it produced from Kazakhmys waste. However, since the beginning of this year, Kazakhmys has switched to a tolling scheme. Why do you think this was done?