The government of Russia discusses the possible adjustment of taxation for the rare-earth industry after increasing the tax on the extraction of metal ores 3.5 times, writes Kommersant. Deputy Minister of Industry and Trade of the Russian Federation Alexei Bobravan said that two possible support options were found. The first suggests that the exception will be done for the entire sector, and the second is that for each individual project an individual decision will be made with the conclusion of an agreement on the protection and promotion of investment (SPC). In this way, it will be possible to avoid increasing mineral extraction tax.
Now the country plans to significantly increase the production of rare-earth metals (RSM) and reduce import addiction. China’s leader at the global level is China, but Russia intends to compress it and take up to 12 percent of the global market. Despite the fourth place in the reserves of RSM in the world, the Russian industry after the collapse of the Soviet Union lost most of the capacity for the separation of rare-earth ores and now depends on foreign supplies.
The production of rare-earth metals is a strategically important area, the managing director of the rating service of the National Rating Agency (NRA) Sergey Grishunin has explained. At the same time, in the world because of them there is already a trade war between the United States and China, which practically monopolized the market, and therefore Russia is especially important to develop their own production, he noted. The specialist reminded that RSM is actively used in electronics, including military.
In the US, rare-earth magnets included a list of “critical” resources for the economic and national security of the country, while they are largely supplied from China. In February of this year, US President Joe Biden ordered to study the situation with the supply of important products, including RSM, and at the beginning of June the authorities announced that they were planning to withstand dishonest trade practices from China, finding “holes” in the supply chain.
Rare-earth metals, among other things, are used to produce constant magnets, important for the production of electric vehicles. Such magnets are extremely effective, but the dependence of their production from China’s supplies causes companies in the West to look for an alternative. At the same time, such decisions can create problems for the industry due to their lower efficiency and jeopardize the transition to electric cars.