Highlights
- Russia proposes rare earth mineral exploration with the U.S.
- Targets Trump’s interest in alternative supply chains from Ukraine
- Potanin and Dmitriev suggest Russia has untapped rare earth reserves
- Russia lacks critical processing infrastructure
- Proposed deal faces significant obstacles:
- U.S. sanctions
- Geopolitical tensions
- Unproven mineral deposits
Brendan Cole and John Feng, writing for Newsweek (opens in a new tab), March 19, 2025, explore an emerging geopolitical chess match in the global rare earths industry, with Russia extending an offer to the U.S. to jointly explore rare earth deposits in Russian-controlled territories, including occupied regions of eastern Ukraine. The authors’ point of view centers around Vladimir Potanin (opens in a new tab), a Russian oligarch and the owner of Norilsk Nickel (opens in a new tab) (Nornickel), and Kirill Dmitriev, the CEO of the Russian Direct Investment Fund (opens in a new tab) (RDIF), both of whom have suggested Russia has untapped rare earth reserves that could be developed with foreign investment.
This overture comes as former U.S. President Donald Trump continues his pursuit of securing rare earth supply chains independent of China, with a particular focus on Ukraine, which has its own deposits of critical minerals. The report suggests that Putin is attempting to lure Trump into cooperation with Moscow by presenting Russia as a more resource-rich and profitable partner than Ukraine.
Russia Rare Earth Riches?
The scenario, as explained in the article, revolves around Russia’s claim that its rare earth deposits far exceed those of Ukraine, making it a more attractive partner for the U.S. if Trump were to accept economic cooperation with Moscow. However, the report also highlights skepticism from critics who warn that Putin’s plan includes rare earth deposits in Russian-occupied Ukrainian territories, which could complicate any potential deals. Potanin himself admitted that many rare earth sites within Russian territory and the so-called “new Russian territories” (occupied eastern Ukraine) remain poorly studied due to the loss of Soviet-era geological data, suggesting that substantial exploration would still be needed before meaningful extraction could begin.
Additionally, Potanin’s company, Nornickel, currently does not hold any licenses for rare earth metal exploration, making it unclear how serious Russia’s proposal truly is.
The article presents Russia’s proposal in the context of broader U.S.-Russia relations, with Dmitriev’s involvement in recent economic talks in Saudi Arabia suggesting that rare earths were a part of broader discussions on economic cooperation, including Arctic hydrocarbon exploration. However, senior economist Vasily Astrov downplays the importance of rare earths in these discussions, calling the story “arguably over-hyped” and emphasizing that other sectors, such as oil and gas, are more likely areas for potential collaboration between Russia and the U.S.
Critical Flaws—Newsweek Just Does Not Get It
While the article provides an interesting angle on Russia’s attempt to undermine U.S. cooperation with Ukraine by offering its own mineral wealth, it fails to acknowledge a critical flaw in the proposal: both Russia and Ukraine lack significant midstream and downstream rare earth processing capacity. Rare earths are not valuable in their raw form alone; they require extensive processing and refinement, industries that Russia and Ukraine do not currently possess at scale. Rare earth element value can be thought of more as a process than access to raw products.
As we frequently explain in Rare Earth Exchanges, China dominates the global supply chain not just in extraction but also in processing and refining, making it the ultimate gatekeeper for rare earth production. If Trump were to engage in a deal with Russia, the U.S. would still need to build an independent processing infrastructure or rely on Chinese facilities for refinement, which defeats the entire purpose of seeking alternative supply chains in the first place.
Other Details
Additionally, the article lacks a deeper exploration of how U.S. sanctions against Russia and its oligarchs would impact such a deal. Potanin and other Russian elites have been sanctioned by the U.S. and Europe, making it legally and politically complex for American companies to invest in Russian mining projects.
The suggestion that the U.S. could easily pivot from Ukrainian rare earths to Russian deposits ignores the entrenched geopolitical hostilities and the regulatory obstacles that such a move would entail. Furthermore, any deal with Russia would risk possibly violating international laws by engaging with mineral deposits in what is considered by much of the West as illegally occupied Ukrainian territories, which would likely provoke a backlash from U.S. allies and international organizations. Of course, Trump is now shaking up existing supply chains as part of restructuring the American economy.
The report does a good job of outlining the political maneuvering behind Russia’s proposal. Still, it lacks technical depth regarding the feasibility of rare earth extraction and processing in both Russia and Ukraine. Newsweek presents Russia’s offer as a potentially viable alternative for the U.S. without critically examining the economic and industrial limitations that make it unlikely to succeed. Moreover, while the report frames the situation as a direct outreach to Trump, it does not cite any evidence that Trump has actually responded to Russia’s overtures, making the story somewhat speculative.
While Newsweek effectively captures the geopolitical intrigue surrounding rare earths, the article does not fully address the fundamental issue of processing capacity, production of parts, components, and assemblies (which China dominates), regulatory barriers, and sanctions that make such a deal implausible.
Russia’s offer may be a strategic move to test Trump’s willingness to engage economically despite ongoing tensions. Still, without midstream and downstream infrastructure, it remains little more than a political ploy rather than a practical solution.
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