Russia eyes major lithium production increase in years to come

By Eugene Gerden

Russia plans a significant increase of lithium both within the country and abroad in years to come, that will take place with the participation of ARMZ Uranium Holding Co, the Russian uranium mining company and part of the domestic nuclear monopoly Rosatom.

As part of these plans, ARMZ plans to start producing lithium compounds in the Murmansk and Irkutsk regions of the country, planning to invest over RUB 50 billion (US$674 million) in these projects.

As Ruslan Dimukhamedov, ARMZ’s Business Development Director, told in an interview with the Russian Kommersant business paper the exact amount of investments will be determined after the actual launch of the projects.

According to Dimukhamedov, in addition to domestic lithium exploration, the company is considering the development of some major properties abroad, particularly in South America and some other parts of the world.

In general, ARMZ intends to produce up to 50,000 tons of lithium compounds per year and to reach industrial production volumes by 2030.

The company hopes to receive support from the state during implementation of the projects, that could be in the form of tax benefits, removal of administrative restrictions and the provision of assistance in attracting long-term project financing.

Notably, foreign lithium projects of Rosatom will be implemented by its Uranium One subsidiary, that may acquire stakes in companies, that will develop lithium projects in Argentina and Chile with the launch date in 2027 and 2029, respectively. As part of these plans, the company intends to acquire 51% in the lithium project, Canadian Wealth Minerals Ltd in Chile.

According to earlier statements of Kirill Komarov, Rosatom’s first deputy general director,  Bolivia is also under radar of the company, as it plans to participate in an international tender for the development of lithium projects in this country.

In addition, Rosatom plans to acquire ore assets in Africa. As Sergei Polgorodnik, General Director of TENEX, a Rosatom’s overseas trade company and exporter of enriched uranium and other services of uranium enrichment told the Strana Rosatom corporate newspaper, the  main goal of Rosatom is to occupy 3.5% of the world lithium market by 2025, and up to 10% by 2030.

Most of analysts believe the development of lithium properties could be economically beneficial for investors at least in the middle term.

According to them, amid the ever growing interest in green energy, global lithium prices have increased rapidly and in 2018 peaked at US$25,000 per ton. Despite the fact that prices went down after this due to an overabundance of supply, they began to rise again from mid-2020.

According to analysts, today the price tag for lithium is at the level of US$14,000-15,000 per ton of lithium carbonate. According to their predictions, further development of the green agenda will lead to an increase in demand for batteries, therefore,  the development of lithium projects within the next 5-10 years will be associated with profits for investors. That will also apply to Latin American lithium projects of Russia, particularly Rosatom.

Still, the long-term lithium prospects of lithium are cloudy, as battery technology may change in the future, while lithium-cobalt batteries may be replaced by storage devices based on carbon nanotubes and aluminum.

In the case of Russia, although the extraction of lithium compounds comes from spodumene ores, and its cost is high, the production of the metal for military and nuclear (thermonuclear) purposes should become a priority for the country and its government in years to come.

In this regard, Russia plans further development of domestic lithium production despite generally low profits associated with the implementation of such projects.

ARMZ at present is responsible for the implementation of the Rare and Rare-Earth Metals business line in the Rosatom’s Roadmap for Technologies of New Materials and Substances. The cost of the program is estimated at 284.6 billion rubles (USD$3,857,753,000) until 2024. Of these, 62.67 billion rubles (USD$1,071,719,670) will be allocated from the state budget. Rosatom will invest 17.7 billion rubles (USD$302,687,700), while its partners – 144.6 billion rubles (USD$2,472,804,600).