Russian fertiliser group Phosagro is working on technology to allow it to tap into its substantial reserves of rare earths -- strategic elements used for everything from battery cells to catalytic converters.
Phosagro, whose rivals include U.S. group Mosaic, has around 42 percent of Russia's total rare earth reserves and 92 percent of its developed reserves of the minerals, critical for the high tech industry.
But the rare earths currently end up in by-products or are turned into fertiliser, meaning they are essentially wasted.
"We are currently in the stage of developing technology which will enable us to extract rare earth oxide out of phosphoric acid or phosphogypsum that we have as a by-product," chief executive Maxim Volkov said in an interview.
"If we succeed, we could produce substantial volumes."
China currently produces more than 95 percent of global rare earths and sent prices soaring as it slashed exports in the past two years. Prices have eased in recent months, but the market has turned to alternative potential sources, including Russia.
Russia's deposits, as much as a third of the world's total, are largely undeveloped, with output limited to one Soviet-era plant in the Murmansk region.
Volkov said Phosagro's rare earths were currently wasted in phosphogypsum, a by-product of processing phosphate ore, or partly transformed through phosphoric acid to fertiliser.
"The technology is complicated - we are talking about millions of tonnes of materials that have to be processed to receive tonnes of rare earth oxides," he said, adding production could be five or six years away.
Phosagro listed global depositary receipts in London in July, tapping into investor appetite for fertiliser stocks, as the world's rising population and unpredictable weather patterns pile pressure on food supplies.
Volkov said there had been an "over-reaction" over the effects of the European crisis in some parts of the market, but said current fertiliser prices -- with diammonium phosphate or DAP, the main phosphate fertiliser, around $610-$620 per tonne free-on-board at the port of Tampa, Florida -- were sustainable.
"We believe soft commodity prices at current levels support current prices for fertilisers, or even higher.
Current prices are absolutely adequate," he said. "We do not see any cancellation of orders or decreased demand."
Volkov said a recent agreement to cut prices for two key Indian buyers after a sharp fall in the rupee was a "gesture" and not a correction. The market, he said, was balanced.
A string of Russian companies have sought premium listings in London in recent months, several hoping for a spot in the FTSE 100. Phosagro, with a market cap of $3.3 billion, had been among those rumoured to follow suit.
But Volkov, countering the trend, said he saw little point in a move to London, particularly with liquidity potentially improving after a merger between Moscow's rouble-denominated MICEX exchange and dollar-based rival RTS is complete.
"I do not share the view of some of the investment bankers trying to persuade different Russian companies that moving from GDRs to primary listing in London creates value, because frankly, it does not change the substance," he said.
He added it was unlikely that investors currently barred from Russian stocks would remain out of Russian companies as rules changed.
"Fundamentally, our investors and shareholders play in emerging markets. Primary listing in London does not take us out of the emerging markets."