The Russian government wants to accord tax exemption projects for the projects for the production of rare earth elements (REE) in the country.
Currently the government discusses further adjustments to the mineral extraction tax for the rare earth elements industry, after the tax on metal ores rose by 3.5 times in 2020. Deputy Minister of Industry and Trade of the Russian Federation Alexei Besprozvannykh told the Russian business paper Kommersant that there are two approaches under consideration: to make an exception for the rare earth industry as a whole, or to act individually on each project listed in the roadmap for the development of rare earth elements until 2030.
The increased tax on mineral extraction was adopted from January 1, 2021. The MET rate increased 3.5 times for potassium salts, apatite-nepheline, apatite and phosphorite ores, ferrous and rare metal ores, bauxite, non-ferrous metal ores.
In the meantime, the increase of tax pressure on REE producers may pose a threat for implementation of Russia’s ambitious plans for a significant increase in the production of rare earth metals and a decrease in dependence on imports.
At the moment, China is the world leader in the industry, but Russia plans to take 10-12% of the world market. Although Russia ranks fourth in the world in terms of reserves of rare earth metals, after the collapse of the USSR, the Russian industry lost most of its capacity for the separation of rare earth ores and now depends on the import of these metals.
By: Eugen Gerden