Recently, Russian President Vladimir Putin gave officials one month to develop a roadmap for building a rare earth metals industry. By December 1, Prime Minister Mikhail Mishustin is expected to present a development plan for an industry that virtually does not exist in Russia.
Rare earth metals are 17 elements essential for producing modern electronics, military equipment, and energy devices. Although not rare in the earth's crust, extracting and especially processing these metals require complex, expensive, and toxic technologies. This technological aspect makes rare earths strategically important on the global market.
China controls about 70% of the world's rare earth extraction, and over 80% of raw materials from other countries are sent there for processing. China holds 90% of the final product market. Russia, on the other hand, has the world's second-largest rare earth reserves—over 28.5 million tons, or 15% of global deposits. However, it extracts only 50 tons annually, while 2023 consumption has already surpassed this figure and is projected to reach 3,000 tons soon.
Russia remains dependent on rare earth imports (up to 98%), and its share of global extraction is only 1.2%. The industry and supply chains were dismantled after the collapse of the USSR. In the 1990s, factories and equipment declined, resulting in loss of industrial and technological sovereignty.
In 2020, Russia announced plans for complete import substitution of rare earths by 2025 with substantial investments. However, reliance on imports persists. The main challenge is the lack of advanced processing technologies. Russia seeks to acquire these from China, but Beijing is reluctant to share know-how even with strategic partners, using its control as geopolitical leverage.
Analysts note that re-establishing the industry will require significant government support and years of effort—building plants and perfecting processing takes 5-8 years. In this context, having huge reserves means little without the technology to convert resources into market-ready products.
