Russian-based miner JSC Atomredmetzoloto (ARMZ Uranium Holding Co.) — the major shareholder of Uranium One Inc. (TSE:UUU) — announced Tuesday its uranium mining subsidiary, JSC Dalur, commenced the pilot extraction of bulk rare earth metals (REM) concentrate as a byproduct of uranium in-situ leaching production in the Kurgan region.

REM bulk concentrate recovered from the productive leaching solutions will be delivered from JSC Dalur to the processing plant in Lermontov for final treatment and manufacturing of 99.9% scandium oxide and alumino-scandium alloy.

The Lermontov processing plant is owned by Intermix Met LLC which acts as ARMZ’s partner and investor in the project.

In 2012, about 35 million rubles (approx. US $1.2 million) were injected into this project, with further investments ramping up to about $17 million in 2013-2023.

ARMZ plans to increase production from 24.5 tonnes of REM concentrate in 2013 to 134 tonnes in 2023. Final REM products will mainly be used in the Russian aerospace industry.

Igor Zhilkin, chief operating officer of ARMZ, said that, "This new project will allow us to significantly increase JSC Dalur’s cost effectiveness.

"Without large investments, we will be able to produce REM concentrate from the same product solutions in addition to uranium."