Russian Paper: Critical Minerals and Rare Earths Deal with US on the Table

Highlights

• Russia holds massive rare earth metal reserves but produces less than 1% of global output.
• Seeking international partnerships for development.
• Potential joint US-Russia project could involve strategic mineral extraction in Russian territories like Chuktukonskoye field and Yakutia deposits.
• Negotiations highlight complex geopolitical dynamics.
• Challenges include extraction costs, limited markets, and political tensions.

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As reported (opens in a new tab) by Kommersant on March 31, the Kremlin has confirmed ongoing discussions between Russia and the United States regarding the potential joint extraction of rare earth metals (REM). According to Dmitry Peskov, the spokesperson for the Russian president, both nations share a mutual interest in this endeavor, though no formal agreements have been signed yet. The head of the Russian Direct Investment Fund (opens in a new tab) (RDIF), Kirill Dmitriev, had previously noted that these discussions were already taking place.

Large reserves, small output

According to the Ministry of Natural Resources, Russia holds an estimated 28 million tons of rare earth metal reserves. However, its current production accounts for less than 1% of global output, and domestic processing infrastructure is practically nonexistent. Alexander Lobusev, (opens in a new tab) a Vice-Rector at Gubkin University of Oil and Gas, explained that Russia does not have dedicated rare earth deposits. Instead, these elements are often found alongside nickel and vanadium, with much of the material ending up as waste due to the complexity and cost of extraction.

A joint project?

Experts suggest that a joint Russian-American project could potentially take place at the Chuktukonskoye field (opens in a new tab) in the Krasnoyarsk Territory or the Seligdarskoye and Tomtorskoye deposits in Yakutia. Gallium is a critical mineral that is essential for semiconductor wafers, laser diodes, and solar cells. It is not a rare earth element.

Currently, gallium production in Russia is handled solely by the Pikalevsky plant in the Leningrad region, which produces approximately seven tons per year. However, Rusal, the plant’s owner, has indicated that production could be expanded to 41 tons annually if demand warrants it.

Political tensions

The challenge remains the high cost of extraction and the limited market for rare earth metals. Domestic demand in Russia stands at only 2,500–3,000 tons per year and is expected to grow gradually. Export options are also constrained. While the European Union has not imposed restrictions on rare earth metal imports from Russia, it remains largely inaccessible due to political tensions. China is another potential market, but Chinese buyers have significant leverage to dictate pricing. The United States, meanwhile, is seeking to reduce its dependence on China, which dominates rare earth processing worldwide.

REM proposal

U.S. President Donald Trump has been a vocal advocate for securing rare earth supply chains, viewing it as a strategic counterbalance to China’s dominance. According to NBC, Russia has proposed an agreement allowing the U.S. to obtain ownership stakes in REM projects in exchange for technological expertise and investment. Some of these projects reportedly involve mineral-rich areas in the Donbass and Zaporozhye regions. Vladimir Chernov, an analyst at Freedom Finance Global, believes that Russian partners in such ventures would likely include state-affiliated corporations such as Rosatom, Rostec, and Norilsk Nickel, all of which have extensive experience in mining and processing complex ores.

Ukraine Colonialism?

American cooperation would bring high-tech production and processing capabilities to Russia, while the U.S. would secure a stable supply of critical materials. However, reports indicate that Washington is also exploring opportunities to mine rare earths in Ukraine. Negotiations between the U.S. and Ukraine have faced obstacles, with Kyiv demanding security guarantees in exchange for its resources. According to Bloomberg, the terms proposed by the U.S. resemble historical colonial resource exploitation models, an approach that has drawn resistance from Ukrainian officials. Trump has reportedly pressured Ukrainian President Volodymyr Zelensky, warning that failure to reach an agreement would result in serious consequences for Ukraine.

Why Russia Is Not the Place

Despite Russia’s vast rare earth reserves, it is not a viable upstream source for the United States due to severe strategic and structural limitations. Russia lacks the necessary processing infrastructure, accounting for less than 1% of global rare earth output, and most of its rare earths remain undeveloped or lost as waste due to co-location with other metals like nickel and vanadium. Even if U.S. investment brought technical expertise, any partnership would be entangled with state-affiliated entities such as Rosatom and Norilsk Nickel—deeply integrated into Russia’s strategic sector and subject to geopolitical volatility.

Furthermore, proposed deals potentially involving occupied Ukrainian territories raise ethical and legal red flags. For the U.S., investing in Russia risks undermining its broader industrial strategy. America must simultaneously rebuild its midstream and downstream capabilities, which requires predictable, transparent, and politically aligned partnerships—conditions that Russia, amid rising authoritarianism and geopolitical isolation, simply cannot provide.

Kommersant, a leader in Russian Business Journalism

Kommersant, the Russian newspaper that reported on these developments, is a widely respected (opens in a new tab) publication with a strong focus on business and political affairs. But it’s understood that the media may bring certain pro-Russian biases.

Founded in 1989, it is regarded as one of Russia’s three leading business dailies, alongside Vedomosti and RBK Daily. The newspaper is known for its in-depth coverage of economic and geopolitical issues, often providing insights into government and corporate decision-making. Despite operating within the political constraints of Russia’s media environment, Kommersant remains an important source of business journalism in the country.