Rare Earth Metals Market Study

Eurasia Development: Russia’s resource potential creates a window of opportunity for joint “mine-to-magnet” projects with Chinese companies.

Rare earth metals (REMs) have become one of the most important elements of the global economy in recent years, serving as essential materials for high-tech industries ranging from electronics and renewable energy to transportation and defense. Our study shows that the key competition today is not for the deposits themselves, but for control over the midstream segment — separation, purification, metals and alloys — and the downstream segment — magnets and finished materials. This is precisely where China has built the most integrated and tightly managed value chain.

At the same time, Russia remains one of the global leaders in rare earth reserves, but its potential is constrained by technological and infrastructure bottlenecks in processing complex ores. Combining Russia’s resource base with Chinese technologies, engineering capabilities and financing could provide a foundation for full-cycle projects and exports of high-tech materials.

Key Findings

• China is the global leader in reserves: economically recoverable global reserves are estimated at approximately 91 million tonnes, of which 44 million tonnes (49%) are located in China. Russia also holds substantial reserves of 28.7 million tonnes, while Brazil has 21 million tonnes.
• China’s advantage lies not so much in its reserves as in its control over the “middle” of the value chain: China accounts for 95% of global chemical processing, 97% of separation, and 91% of rare earth metals and alloys production. Even as mining expands outside China, control over separation and purification, as well as downstream materials and magnets, remains the main lever of competitiveness and pricing.

What This Means for Russian Companies
Given the objective set by the President of the Russian Federation to establish an independent rare earth value chain in Russia, technology scouting and the rapid identification of partners in China represent the most realistic way to meet the required timelines, as China possesses the key capabilities in processing and separation, metals and alloys, and magnets.

The value of cooperation with China lies not simply in exporting raw materials, but in the ability of Chinese companies to bring technologies and industrial expertise needed to build a complete rare earth value chain in Russia. The optimal cooperation model is therefore not “raw materials in exchange for money,” but a technology partnership covering engineering, equipment, pilot lines and joint projects to localize key processing stages in Russia, allowing domestic reserves to be converted into higher-value products within the country.

Expert Commentary
“The combination of Russia’s resource base and China’s technological and industrial capabilities creates a rare opportunity of significant scale: from joint pilot projects for processing complex raw materials to full-cycle projects encompassing separation and purification, metals and alloys, magnetic materials and access to end-use industries. With the right partnership structure, it is possible to move beyond concentrate exports toward the creation of higher value added and a new model of industrial cooperation between Russia and China in this strategically critical technology value chain,” notes Konstantin Matveenkov, Director of ESG and Sustainable Development at Eurasia Development.