The Russian ruler suggested that the U.S. participate in the mining and production of rare earth metals in Russia.
Russian President Vladimir Putin has offered US government agencies and companies to engage in joint projects for the extraction of rare-earth metals. Russia has 20% of the reserves of such raw materials, but there is practically no extraction and processing due to the lack of technology and a stable sales market. In addition, the president proposed to resume supplies of Russian aluminum to the U.S. market, which is preparing for an increase in prices for this metal due to new duties, as well as to think about joint work between Russia and the U.S. to produce aluminum, for example, in the Krasnoyarsk region. Investments in such a project could amount to $15 billion.
Russia is ready to offer U.S. government agencies and companies to cooperate in projects to mine rare earth metals, Russian President Vladimir Putin said on the evening of February 24. The transcript of his interview was published on the Kremlin website. As Mr. Putin noted, Russia has “an order of magnitude more resources of this kind than Ukraine.” At the same time, he added, these are rather capital-intensive investments.
On the same day, Vladimir Putin held a meeting on the development of the rare earth metals mining industry, where he said that the Russian Federation is to establish a full cycle of the rare and rare earth metals industry, to ensure their extraction and processing up to the production of finished high-tech goods.
U.S. President Donald Trump also said on February 24 that the U.S. is interested in Russia’s “huge reserves” of rare earth metals and other valuable resources. Mr. Trump has reportedly discussed “big deals” with Vladimir Putin on economic development.
The rare earth group includes 17 chemical elements, including lanthanides, scandium and yttrium. They are called rare earths because of their small reserves in the world – a “rare” occurrence in the subsurface. They are all characterized by refractoriness, and their oxides do not dissolve in water. Today, the demand for rare earth metals worldwide is growing amid their applications in the radio electronics, nuclear, engineering, metallurgical, chemical, petrochemical, glass and defense industries. According to Verified Market Research (VMR), the volume of the global rare earth metals market may more than double to $10.78 billion by 2030. Research and Markets forecasts the market to grow from $7.62 billion in 2024 to $9.38 billion in 2028.
About 60% of the world’s reserves of rare earth metals and about 15% of their global production is in China. According to Rosnedra, Russian rare earth reserves in 2024 were estimated at 28.7 million tons at 18 explored deposits. This is 20% of the world’s reserves. However, the share of Russian production in the world market does not exceed 1%, and there is virtually no processing of such metals in the country.
As specialized agencies and experts have repeatedly explained, in addition to large capital expenditures at the early stages of implementation of such projects, Russia lacks industrially proven technologies for processing raw materials, and deposits are remote from infrastructure facilities. Companies are also afraid of unclear prospects of demand for these metals and, consequently, of the risk of freezing huge investments. So far, interest in the industry has been limited almost exclusively to state companies (see Kommersant, December 4, 2023).
Most major rare-earth projects are essentially frozen today. Among them is the Tomtor niobium and rare-earth metals deposit (owned by managers of Alexander Nesis’ IST Group) in Yakutia, which has a preliminary reserve estimate of 11.4 million tons of ore containing 0.7 million tons of niobium oxide and 1.7 million tons of rare-earth oxides. According to Kommersant sources, Rosneft head Igor Sechin, in his address to Vladimir Putin, suggested that funds from the sale of the Zvezda shipbuilding complex be used for the development of the deposit (see Kommersant, November 8, 2024).
The Ak-Sugsky subsoil plot in Tuva has 78,000 tons of molybdenum and 83.3 tons of rhenium. The asset belonged to Mikhail Prokhorov’s Intergeo, but in 2024 Rosnedra decided to revoke the company’s license due to violation of the deadline for infrastructure construction. Late last year, the auction for the right to develop the deposit was won by Rostec’s structure.
To create a project to develop the Pavlovskoye lead-zinc deposit on the Novaya Zemlya archipelago, First Mining Company (part of Atomredmedzoloto, renamed Rosatom Nedra, Rosatom’s mining division) signed memoranda with China’s NFC and Pauerite Limited “to define general conditions and intentions for further implementation. The document was signed in March 2024, but so far the details of the project implementation have not been reported.
Cooperation between Russia and the US may not be limited to rare-earth metals, it follows from Vladimir Putin’s interview. He noted that if the U.S. opens its aluminum market, Russia could supply 2 million tons of the metal a year, which would help keep prices in check.
Mr. Putin also suggested thinking about joint work between Russia and the U.S. on aluminum production, for example, in the Krasnoyarsk region. Investments in such a project could amount to $15 billion.
The ban on imports of Russian aluminum to the U.S. has been in effect since April 2024. At the same time, starting from March 12 of this year, 25% import duties on steel, aluminum and aluminum products from other countries will be imposed in the USA. The U.S. own production of aluminum is 860 thousand tons, about 30% of the total consumption is imported, previously this volume was provided mainly by Canadian supplies. On this news, shares of Rusal and Nornickel on the Moscow Exchange rose to close trading by 6.5% and 7.1%, respectively. By 10:25 February 25, Rusal’s shares were up 2.9%, while Nornickel’s were up 0.9%.