What is Russia's goal in rare earth metals?

Vladimir Putin offered to the U.S., as part of a future deal on economic cooperation, the chance to jointly explore Russia’s rare earth metal deposit that he said was greater than Ukraine’s. Putin's offer came after negotiations between the U.S., Ukraine and a draft mineral deal which is expected to signed on Friday during Ukrainian President Volodymyr Zelenskiy's trip to Washington.

"I would like to purchase minerals in Russia too." If possible, we'd like to buy rare earth. Both Russia and Ukraine have excellent rare earth, said Trump, adding that the deal would benefit both Russia and the U.S.

China's 95% control over global production and supply of rare earths metals, vital for industries like defence and consumer electronics has prompted the rest of world to try and develop their own supplies.

Here is a brief description of the rare earth metals sector in Russia:

RESERVES

According to U.S. Geological Survey data, Russia is the fifth largest producer of rare earths in the world, after China, Brazil and India.

USGS estimates that Russia's reserves are 3.8 million metric tonnes.

The Russian estimate of total rare earth reserves is higher.

According to the Natural Resources Ministry of Russia, Russia's reserves of rare earth metals will total 28,7 million tons by January 1, 2023. 3.8 million tonnes of these reserves are currently being developed or ready for development.

The Russian documents on the development of the industry point out that the major obstacles to its development are the low demand for metals in Russia and the strong competition from China.

According to its sector strategy, Russia wants to be one of the five largest producers of rare earth metals with a global market share of up to 12% by 2030.

Who mines rare earth metals in Russia?

Solikamsk Magnesium Plant is the only Russian producer of rare earth metals that are finished. It was seized from its former owners by Rosatom, in 2023, on grounds of illegal privatisation.

Rosatom, the Russian nuclear power monopoly that has actively diversified into other high-tech sectors, is in charge of developing rare earth production as part of a "national project".

The Solikamsk Plant received loparite containing rare-earth metals from the Lovoozerskoye deposits, controlled by Rosatom in Murmansk Region in Northern Russia. This is the only working rare earth extraction site in Russia.

The plant currently processes about 8,000 tonnes of concentrate each year. The Russian rare earth metals production accounts for approximately 1% of the global production, or 2,600 tons.

RUSSIA’S PRODUCTION PLAN

Putin convened a rare earth metals meeting less than two hours after Trump announced that "major transactions for economic development with Russia" will take place on the 24th of February. He said this sector is a priority in Russia's development.

Last week, Putin spoke also about rare earths, other metals, and other materials at a conference organized by his longtime friend, scientist Mikhail Kovalchuk. Kovalchuk is the president of Russia's foremost research centre, Kurchatov Institute.

In his speech Putin bemoaned the loss of Soviet expertise on rare minerals extraction and usage after the fall of the USSR. He called on the Kurchatov Institute named after the Soviet creator of the atomic bomb, and Rosatom, to concentrate on restoring this.

Putin accused Tomtor's operator, Russia's biggest rare earth metals mine, of delaying its development in November last year, suggesting that it either raise investments or seek assistance from third parties including the government.

Tomtor in northern Siberia's Yakutia region, and Zashikhinskoye, in Irkutsk, Siberia are the two main projects in Russia's plan to increase metals production. Both extraction sites have been delayed.

Rosatom and Rostech (industrial and defence conglomerate) are likely to be the largest domestic consumers of rare-earth metals. (Editing by Barbara Lewis).

(source: Reuters)