ICT Group, controlled by Russian tycoon Alexander Nesis and state-owned corporation Rostec has reached a $1 billion deal to develop the Tomtor rare metals deposit in the far east of Russia.

Russian business newspaper Kommersant reports with 154 million tonnes of ore containing 6.71% of niobium oxide, 0.6% of yttrium, 0.048% of scandium and 9.53% of terbium, Tomtor can be considered a unique and potentially the biggest undeveloped deposit of rare metal and REEs worldwide.

ICT Group will own a controlling 50% in the venture in the remote Sakha (Yakutia) Republic while Rostec will control 25%. The rest of shares will be allocated to a yet to be determined investment fund.

Joint venture partners plan to invest at least $1 billion and it is understood that ICT-Rostec will also take control of the 82,000 tonnes of REE-containing monazite concentrate that has been stored in warehouses in Krasnoufimsk – the city in the Ural region of Russia – since the Soviet era.

The partners will also construct a hydrometallurgical processing plant with production capacity of 4,500 tonnes of ferroniobium and 10,000 tonnes of rare earth oxides per year.�The construction of processing plant will be commissioned this year and is expected to be finished by 2017.

Molycorp (NYSE:MCP) in the US and Australia’s Lynas Corporation (ASX:LYC) have had modest success in their attempts to loosen China’s grip on the global rare earth industry so far.

The scale and size of the project plus the market moving potential of the warehoused REEs make Tomtor a potentially much bigger threat to China which still controls 95% of the global production of REEs.