President Vladimir Putin proposed a joint exploration of Russia’s rare earth metal deposits, which he claims are larger than Ukraine’s, as part of a future economic deal with the US, Reuters reported on Wednesday.
This offer comes after the US and Ukraine negotiated a draft minerals deal expected to be signed during Ukrainian President Volodymyr Zelenskiy’s Washington visit on Friday.
“I’d like to buy minerals on Russian land too. If we can, the rare earth. They have very good rare earth also, they both do (Russia and Ukraine),” US President Donald Trump had said.
Trump had also said that the agreement would be in favour of both the US and Russia.
China’s dominance in the rare earth metals market, controlling approximately 95% of global production and supply, has raised concerns worldwide.
These metals are essential for various industries, including defense, aerospace, and consumer electronics, making them strategically important.
This near-monopoly has prompted other countries to explore developing their own rare earth metal resources to reduce their dependence on China.
Russia’s reserves
Russia holds substantial reserves of rare earth elements, particularly in the Kola Peninsula and other regions.
These reserves offer the country the potential to diversify the global supply chain and reduce dependence on China.
The US Geological Survey (USGS) reports that Russia holds the world’s fifth-largest reserves of rare earth metals, estimated at 3.8 million metric tons.
Its reserves are exceeded only by those of China, Brazil, India, and Australia.
Russia possesses substantial rare earth metal reserves, with an estimated 28.7 million tons as of January 1, 2023.
Of this total, 3.8 million tons are either under development or ready for development.
Despite these reserves, the industry’s growth is hindered by low domestic demand and strong competition from China.
Nevertheless, Russia aims to capture up to 12% of the global market share and become a top-five rare earth metals producer by 2030.
Russian rare earth metal mining
Solikamsk Magnesium Plant, the sole Russian producer of finished rare earth metals, was seized from its previous owners in 2022 due to accusations of illegal privatisation.
The plant was subsequently transferred to the state corporation Rosatom in 2023.
Russia’s nuclear power monopoly, Rosatom, is tasked with developing rare earth production as a “national project.” The company has been actively expanding into other high-technology sectors.
The Solikamsk Plant receives loparite concentrate, which contains rare earth metals, from the Rosatom-controlled Lovoozerskoye deposits.
Located in the Murmansk region in northern Russia, Lovoozerskoye is the country’s only operational rare earth extraction site.
The Russian rare earth metals output is approximately 2,600 tons, which is about 1% of the global production.
Currently, the plant is processing roughly 8,000 tons of concentrate annually.
Production plans
Putin held a meeting on rare earth metals, stating that the sector was crucial for Russia’s economic development, less than two hours after Trump announced that “major economic development transactions with Russia” would occur on February 24.
Putin also discussed rare earths and other metals last week at a conference hosted by Mikhail Kovalchuk, a longtime friend and the president of the Kurchatov Institute, Russia’s premier research center.
Putin expressed regret over the loss of Soviet expertise in rare minerals extraction and use following the USSR’s collapse.
He called upon the Kurchatov Institute and Rosatom to prioritize its restoration.
In November, Putin criticised the operator of Tomtor, Russia’s largest rare earth metals deposit, for delays in development.
He suggested the operator raise investment or seek assistance from third parties, including the state.
Tomtor and Zashikhinskoye, key projects central to Russia’s strategy for increasing metals production, have both experienced launch delays.
These sites are located in the Yakutia and Irkutsk regions of Siberia, respectively.
Rosatom and Rostech, high-tech enterprises involved in the industrial and defense sectors, are expected to be the primary domestic consumers of the rare earth metals produced.
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