Putin pushes Russia to transform rare-earth reserves into a global supply contender amid geopolitical tensions

Russian President Vladimir Putin has ordered a strategic plan to develop and process rare-earth minerals by December, aiming to challenge China’s dominance and strengthen Moscow’s position in the global high-tech supply chain amid increasing international competition.

Russian President Vladimir Putin has issued a directive for his cabinet to develop a comprehensive roadmap for the extraction of rare-earth minerals by December 1, underscoring Moscow’s strategic...

pivot toward bolstering its rare-earth resources amid intensifying global competition. The order, released following Putin’s participation in the Far Eastern Economic Forum held in Vladivostok, also includes instructions to enhance transport and logistical infrastructure along Russia’s borders with China and North Korea, including the commissioning of a new bridge to North Korea by 2026.

Rare-earth minerals—critical components for high-tech industries such as smartphones, electric vehicles, and advanced weapons systems—have surged in geopolitical importance, primarily due to their key role in modern technology and clean energy solutions. The global market, currently dominated by China, faces increasing strain as Beijing has imposed export restrictions in response to U.S. tariffs, heightening international urgency to diversify supply chains.

Russia claims significant reserves of these minerals, with the Ministry of Natural Resources reporting 28.7 million tonnes of 15 rare-earth metals as of January 2023, and broader estimates including 29 types of rare minerals totalling approximately 658 million metric tons. However, experts caution that despite these claims placing Russia among the top five countries for rare-earth reserves, Russia’s current production accounts for a scant 1% of global output. Moreover, the country lacks sufficient processing facilities, a critical bottleneck in adding value to raw extraction.

Putin has stressed the need to implement advanced mining technologies and stimulate domestic demand to transform Russia’s potential into operational capacity. The roadmap, to be overseen by Prime Minister Mikhail Mishustin, aims at addressing these challenges and enhancing Russia’s role in the rare-earth market.

The timing of the announcement coincides with heightened geopolitical manoeuvring around rare-earth resources. In April, the United States formalised a deal with Ukraine granting preferential access to Ukrainian mineral projects to support the country’s reconstruction efforts. Earlier in the year, Russia expressed interest in collaborating with U.S. companies on rare-earth projects, with investment envoy Kirill Dmitriev confirming ongoing discussions. However, such cooperation has largely stalled due to the protracted conflict in Ukraine and Western sanctions.

Moscow’s strategy is not limited to resource extraction alone. Putin’s instructions to improve multimodal transport and logistics hubs at Russia’s eastern borders reflect a broader aim to deepen economic ties with China and North Korea. These efforts come as both neighbours have strengthened their relations with Russia amidst Western sanctions and global realignments.

In addition to rare-earth initiatives, Putin has hinted at potential future collaborations with the U.S. in related sectors, such as aluminum production and hydropower infrastructure, particularly in Russia’s resource-rich Krasnoyarsk region. Russia previously supplied up to 15% of U.S. aluminum imports before sanctions and tariffs led to a near halt in trade. Putin suggested reopening market channels for Russian aluminum could help temper global price volatility, while joint ventures might provide mutual economic benefits despite broader geopolitical tensions.

While Russia’s ambitions in the rare-earth sector remain promising, realising this potential will require overcoming significant technical and infrastructural hurdles. Given the strategic value of these metals and the geopolitical context shaped by conflicts and sanctions, Moscow’s roadmap could reshape aspects of the global rare-earth supply chain, offering an alternative to China’s dominance. Analysts will watch closely how quickly and effectively Russia moves from reserve reporting to active production and processing, and whether its efforts lead to substantive partnerships or shifts in international market dynamics.

Source: Noah Wire Services