Russia gives controlling stake in strategic Lovozersky mine to Rosatom
ST. PETERSBURG. June 1 (Interfax) - Russia's Federal Property Agency has transferred a controlling stake in Lovozersky GOK LLC (LGOK), a rare earth ore mine and processing plant in Murmansk Region, to Rosatom, the state nuclear corporation's mining division, Atomredmetzoloto (ARMZ) reported on its website.
LGOK will become part of Rosatom's mining division, ARMZ said. Vladimir Fedyakov, who previously worked in Rosatom's mining division, has been appointed chief executive of LGOK.
Prime Minister Mikhail Mishustin signed the order to transfer 74.97% of shares in Fin-Proyekt LLC, the sole owner of LGOK, to Rosatom on April 23, according to the official website for legal information.
LGOK is Russia's only miner and processor of loparite ore, from which rare earth metals are extracted for subsequent use in industry, ARMZ said.
LGOK supplies loparite concentrate to the Solikamsk Magnesium Plant (SMZ) , which extracts tantalum, niobium and titanium from it and produces a concentrate of other rare earth elements. These products are subsequently used in sectors such as electronics, chemical equipment, optics, quantum generators, acoustics, surgery, alloyed steels, ultrahigh-temperature alloys, superconductors and the nuclear industry.
"Unfortunately, the complete production cycle for rare earth metals is not currently self-contained in our country, so Solikamsk Magnesium Plant shares are also being prepared for transfer to Rosatom as an asset contribution of the Russian Federation. The next step being planned here is the construction of a separation plant to ensure complete resource and, consequently, technological sovereignty," the company said.
As a result, Rosatom will have a complete production chain for rare earth metals, from mining to production.
In February 2022, the Arbitration Court of Murmansk Region, at the request of Russia's Federal Antimonopoly Service (FAS), ruled to strip foreign investors of voting rights in regard to LGOK. The court ruled that Cyprus-based firms Vojiesko Holding, Fullcircle Facilities Management and Slontecco Investments indirectly acquired control over LGOK, which is strategically important for Russia's defense and national security. These firms earlier each acquired 24.99% stakes in Fin-Proyekt LLC.
The sole owners of the Cyprus-based firms are Russian citizens. Vojiesko Holding is owned by Russian citizen and Austrian tax resident Yevgeny Syrtsev; Fullcircle Facilities Management is owned by Russian citizen and tax resident Sergei Shalayev; and Slontecco Investments is owned by Russian citizen and Austrian tax resident Pyotr Kondrashev, who ranked 86th on the Forbes list of Russia's 200 wealthiest individuals in 2021.
In May 2022, an appeals court ruled to seize these firms' stakes in Fin-Proyekt LLC, totalling 74.97%, for the Russian state. Then in July the Murmansk Region Arbitration Court froze 24.99% of shares in Fin-Proyekt owned by Igor Pestrikov and 0.04% of shares owned by Sergei Kirpichev.
Concurrently, an arbitration court in Perm Territory issued a ruling in a lawsuit filed by Russia's Prosecutor General's Office that resulted in 89.5% of shares in SMZ being seized for the state from Kirpichev, Kondrashev, Pestrikov and Timur Starostin.
SMZ produces magnesium and rare metal products, such as niobium, tantalum, titanium, among others. It exports magnesium alloys, primary magnesium, niobium and tantalum pentoxide and pentachloride, rare earth metal carbonates, titanium sponge and potassium chloride. SMZ gets its raw materials from LGOK.