If there is one thing that the world has learnt from the COVID-19 outbreak and Chinese belligerence, it is that the Chinese monopoly in any sector of the global economy is detrimental to the entire humankind. Democratic countries around the world have made efforts to push the paper dragon away from global supply chains. And now, even Russia has joined the fray.
As per the latest Reuters report, Russia is looking to dent Chinese dominance in rare earth minerals production. Rare earth elements – a suit of 17 elements, are strategic assets for future generations. Production of fighter jets, hypersonic missiles, electric cars, satellites, smartphones, lasers, and radiation-hardened electronics- everything is dependent on this group of 17 elements. Till now, China has a monopoly over rare earth elements, but Moscow is looking to take this strategic advantage away from China.
Reuters has claimed that as per a top government official, Russia is planning an investment of $1.5 billion in rare earth elements. In fact, the Kremlin is looking to make Russia the second-biggest producer of these minerals after China by 2030.
Russia’s plans to push rare earth production comes as a huge setback to China which presently enjoys an effective monopoly in the production of these minerals. China controls 63 per cent of global rare earth elements production and is also home to 37 per cent of rare earth reserves.
Since rare earth minerals are indispensable in key sectors such as defence, telecommunications, and renewable energy, Beijing feels that it can weaponise its rare earth elements monopoly. China’s State media and officials have regularly wielded threats to cut the United States off the rare earths supply, amidst the ongoing Sino-American rivalry. CCP mouthpiece Global Times too, has gone to the extent of saying that the minerals that the US relies upon are “an ace in Beijing’s hand”.
However, Russia is now telling the world that it doesn’t have to fear Chinese dominance in rare earths. The world’s largest country has reserves of 12 million tonnes, that is, 10 per cent of the total global reserves. Moreover, the Russian government is willing to back any foreign investment in this sector.
So, Russian President Vladimir Putin is telling his purported adversaries in the free world that for once the West and Moscow can set aside their differences to end China’s rare earth dominance.
Alexei Besprozvannykh, Russia’s Deputy Industry and Trade Minister, disclosed that Russia is offering reduced mining taxes and cheaper loans to investors in a list of 11 projects as a part of its plans to shore up rare earths production.
Presently, Russia accounts for a negligible 1.3 per cent share in global rare earth production. But it plans to increase its share in global production to 10 per cent by 2030. If the 11 Russian projects, including the Tomtor deposit in Russia’s Far East, are successfully developed then it will become self-sufficient in this sector by 2025. A year later, Russia will start exporting the strategically crucial minerals.
By 2024, Russia’s rare earths production is expected to reach 7,000 tonnes a year. As per the US Geological Survey, Russia’s rare earths production stood at 2,700 tonnes in 2019. Therefore, we are bound to witness an extraordinary spurt in the Russian rare earth production.
Democratic countries across the world have been looking to reduce reliance on Chinese rare earth elements. The US has already started moving in this direction. Japan has, in fact, successfully overcome the Chinese monopoly in this sector. Eventually, China’s other enemies like India would also look to sidestep Chinese rare earth dominance. Russia is offering a lucrative option to all these democratic powers.
And at the end of the day, Russia’s President Vladimir Putin seems to have no qualms in hurting China’s rare earths dominance.
