Highlights

• Russia holds vast rare earth reserves but currently produces only 1% of global output, with ambitious plans to reach 12% by 2030.
• Putin's offer to the US for joint rare earth development appears more like a strategic maneuver than a genuine partnership proposal.
• Russia faces significant technical, economic, and political challenges in developing a competitive rare earth supply chain.
• Currently lagging behind China and Western allies.

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Reuters’ (opens in a new tab) article last month provides a somewhat concise and revealing look into Russia’s ambitions in the rare earth elements (REE) space—one increasingly shaped by geopolitics, shifting supply chains, and escalating U.S.-China tensions. Gleb Bryanski and Anastasia Lyrchikova report that President Vladimir Putin’s overture to the United States, offering joint development of Russian REE reserves, adds a curious twist at a moment when Western alliances are tightly circling Ukraine and trying to decouple from adversarial supply chains. But what’s really behind this offer? How realistic are Russia’s goals? And what do they mean in a market dominated by China?

Progress on Paper, Paralysis on the Ground

The Reuters piece acknowledges that Russia holds the world’s fifth-largest rare earth reserves—estimated at 3.8 million metric tons (MT) by the U.S. Geological Survey but inflated to nearly 29 million MT by Russia’s Natural Resources Ministry. That’s a massive discrepancy and perhaps an early red flag means a strategic projection without economic grounding.

Production numbers underscore this disconnect. Russia currently contributes only 1% of global REE output—a paltry 2,600 MT annually—compared to China’s commanding 80%+ share. Even with resource-rich deposits like Tomtor (in delay (opens in a new tab)) and Zashikhinskoye (located in the Irkutsk region of Russia—potential for the extraction of tantalum, niobium, and rare earth metal oxides) the delays and underinvestment have left Russia’s ambitions largely aspirational. The article candidly points to internal challenges: lack of domestic demand, technological gaps, and a decades-long decline since Soviet times.

This is not a new theme. As Rare Earth Exchanges noted in a recent analysis of U.S. executive action on critical minerals, having rare earth reserves is not the bottleneck. The true challenge lies in building a vertically integrated, economically viable, and environmentally compliant supply chain—from mining to separation to oxide production to magnet manufacturing. And in this respect, Russia remains years behind not just China, but also the U.S., Australia, and Canada.

Does Putin’s Offer Equal Strategic Gambit or Sincere Engagement?

Putin’s outreach to the U.S.—timed just as the Biden administration eyed a Ukrainian critical minerals deal—seems less like an olive branch and more like a strategic wedge. If accepted, it could dilute U.S. focus on Ukraine’s resources. If rejected, Putin can posture domestically that the West is politicizing economic cooperation.

That said, it’s highly unlikely the U.S. would move forward with such a joint development deal under current geopolitical conditions. Sanctions remain entrenched, even with Trump in the leadership role now.

Western firms are wary of reputational and legal risks. Rare earths are now treated as a strategic asset category, akin to semiconductors or energy infrastructure—areas where supply chain sovereignty is paramount. With the latest executive order from the White House, the emphasis will be on exploiting domestic resources.

So, what does Putin want? Hint: $$$

He’s signaling that Russia wants to cozy up selectively—not to the West per se, but to Western capital. With the Tomtor project delayed, and Solikamsk processing capacity stagnant, Russia appears to be fishing for downstream partners, investment, and potentially even Western tech transfer.

But do they have the wherewithal to go downstream? Technically, perhaps—Rosatom (opens in a new tab), now overseeing REE development, has the scientific infrastructure and capital base. But scaling from 2,600 MT to a meaningful global share (Russia targets 12% by 2030) would require:

• Processing plants for light and heavy REEs
• Advanced separation and oxide production
• Rare earth magnet fabrication
• Domestic or allied tech-sector demand

In other words: a multi-decade, multi-billion dollar national effort. China has been doing this since the 1990s. The U.S. is just getting serious. Russia is starting from scratch.

Geopolitics and the China Factor

The elephant in the room—mostly unaddressed in the article—is how Russia fits into the China-dominated rare earth world. China not only controls most processing but also tightly manages pricing through its state-backed firms. If Russia dramatically ramps up production, it will face the same retaliatory price suppression tactics that have crushed many Western REE ventures.

And here’s the twist according to one pessimistic view. Russia and China are strategic partners, especially in energy and defense. Why would Russia undercut China’s grip by building an independent REE supply chain that could feed U.S. tech and defense systems?

Unless Putin is positioning Russia as a swing supplier between East and West, ready to leverage its mineral base for whichever side offers better terms. This, again, potentially puts the U.S. in a bind. Partner with an adversary to bypass China or double down on domestic and allied production, risking higher costs and slower timelines.

Aspirational, Opportunistic, and Politically Fraught

Russia’s rare earth ambitions are long on rhetoric and short on results. The raw materials are there, but the technical, economic, and political scaffolding is weak. Putin’s offer to the U.S. is not about partnership—it’s about leverage. In a multipolar world where critical minerals are the new oil, Russia wants to insert itself into supply chains—not to play fair, but to play both sides.

Final Thoughts

Russia’s rare earth ambitions remain more geopolitical than geoeconomic. Until it builds processing muscle and market trust, the country is a marginal producer with maximalist rhetoric.