Highlights

• Putin proposes collaboration with U.S. companies on rare-earth mineral development in resource-rich Russian regions.
• U.S. cannot easily leverage Russian minerals due to lack of domestic processing infrastructure and political sanctions.
• The proposal appears more like a diplomatic maneuver than a genuine economic opportunity.
• Highlights America's critical need for an independent rare-earth minerals strategy.

Russian President Vladimir Putin has suggested that Russia is open to working with the United States, including private American companies, to develop its vast reserves of rare-earth minerals. Framing Russia as a global leader in these critical resources, Putin pointed to mineral-rich regions such as Murmansk, the Caucasus, Irkutsk, Yakutia, and Tuva, emphasizing that significant investment is needed to extract and process them.

He even hinted at incorporating newly annexed Ukrainian territories into these efforts. His remarks come on the heels of a tense White House meeting between President Trump and Ukrainian President Volodymyr Zelenskyy, where the two clashed over the ongoing war. Trump later dismissed Zelenskyy as "not ready for peace," further escalating geopolitical tensions.

Smoke and Mirrors?

While Putin’s offer may seem like an opening for U.S. industry, the reality is that it does little to address America’s rare-earth supply chain vulnerabilities. Even if the U.S. were to import Russian minerals, it lacks the processing infrastructure to refine them into usable materials. The only domestic rare-earth producer, MP Materials, is still ramping up its capabilities and remains heavily dependent on China for processing. Without a robust industrial policy, access to raw materials—whether from Russia or elsewhere—does not solve America’s strategic dependency on China, which continues to dominate global rare-earth refining.

Beyond logistical challenges, any agreement with Russia would be a political minefield. The U.S. has imposed strict sanctions on Russian industries due to the war in Ukraine, and Congress—especially under a national security-focused administration—would likely oppose any reliance on Moscow for critical minerals. The Pentagon has already been working to reduce dependence on adversarial nations for key materials, making any Russian supply agreement not just impractical but also politically toxic.

Russian Underdeveloped

Despite Putin’s claims of vast rare-earth resources, Russia itself remains underdeveloped in this sector. China, not Russia, is the dominant global player, controlling the bulk of mining and refining. Russia still relies on Chinese refining infrastructure, making its offer to the U.S. questionable at best. Rather than a legitimate economic opportunity, Putin’s proposal appears to be a strategic ploy, using rare-earth minerals as a diplomatic bargaining chip amid strained U.S.-Russia relations.

Putin’s rare-earth overture is more smoke and mirrors than a real solution. Without domestic refining capabilities, the U.S. cannot simply buy its way out of its rare-earth dependency. Washington must prioritize building its own supply chain, investing in domestic processing, and securing resources from allied nations rather than entertaining offers from geopolitical adversaries. This is not just an economic issue but a matter of national security, and the U.S. must act accordingly. The U.S. needs an industrial policy for critical minerals (including rare earth), or Trump will need to fly to Beijing and do a deal to secure stable long-term access to low-cost output.  And even then, companies will accelerate resilience plans in any way they can.