Russia’s largest oil producer has acquired one of the world’s biggest rare earth deposits in a move that dramatically shifts the global critical minerals landscape.
At a Glance
- Rosneft PJSC has taken control of the massive Tomtor rare-earth deposit in Siberia, which contains 154 million tonnes of mineral-rich ore
- The deposit is crucial for Moscow’s strategic mineral production ambitions as Russia aims to become the world’s second-largest rare earth producer by 2030
- President Vladimir Putin had previously criticized delays in the project’s development, urging advancement through various means
- Western sanctions following Russia’s Ukraine incursion have hindered the project’s progress by limiting access to necessary technologies
- The acquisition reflects a broader trend of oil giants diversifying into critical minerals essential for high-tech and defense industries
Strategic Resource Acquisition
Rosneft PJSC, Russia’s oil production giant, gained full control of the Tomtor rare-earth deposit on May 20 through acquisition of the project operator, Vostok Engineering. The Siberian deposit represents one of the world’s three largest rare earth metal reserves and contains approximately 154 million tonnes of ore, including rare-monazite, pyrochlore, niobium, and scandium. These elements are essential components in technologies ranging from smartphones to missile guidance systems, making the deposit a strategic asset in Russia’s quest to become a leading producer of critical minerals.
The acquisition comes at a pivotal moment for Russia’s mineral strategy. The country currently holds the world’s fifth-largest rare earth reserves and has ambitious plans to capture approximately 12% of the global market share within five years. Russian officials have outlined investments totaling $1.5 billion to develop its rare earth capacity by 2030, with the Tomtor deposit playing a central role in these plans. Prior to Rosneft’s takeover, the project had stalled indefinitely, contributing to presidential frustration with its lack of progress.
Presidential Pressure and Sanctions Impact
Development of the Tomtor deposit has faced significant obstacles in recent years, drawing criticism from the highest levels of Russian government. In November 2024, President Vladimir Putin specifically highlighted the need for progress at Tomtor, emphasizing the strategic importance of the resource to national interests. The president’s public comments reflected growing impatience with previous owners’ inability or unwillingness to advance the project despite its critical importance to Russia’s mineral security plans.
Western sanctions imposed following Russia’s 2022 military actions in Ukraine have further complicated development efforts at Tomtor. These restrictions have limited Russian access to critical technologies needed for efficient extraction and processing of rare earth elements. The Buranny section of the deposit alone contains an estimated 11.4 million tonnes of ore, including 0.7 million tonnes of niobium oxide and 1.7 million tonnes of rare earth oxides – resources that remain largely untapped due to these challenges.
Shifting Ownership and Global Implications
The Tomtor project has undergone several ownership changes in recent years. Previously held by the ICT group with Polymetal maintaining a 9.09% minority stake, control shifted to former ICT managers Vladislav Resin and Alexei Aleshin in April 2022. The Polymetal stake was eventually transferred to the operator itself in mid-2024 before Rosneft’s complete acquisition this month. These transitions reflect the challenges of developing such a strategic asset amid geopolitical tensions and economic sanctions.
Rosneft’s acquisition aligns with a global trend of oil majors diversifying into critical minerals. Companies including ExxonMobil, Chevron, and Occidental are exploring similar ventures, particularly in lithium production. Governments worldwide are also securing mining deals to expand mineral production capabilities, recognizing the strategic value of these resources. Some analysts suggest the Tomtor deposit could potentially become an area of cooperation between Russia and the United States if diplomatic relations improve following resolution of the Ukraine conflict.
Financial details of the acquisition remain undisclosed, and Rosneft has not publicly commented on the transaction. Previous reports suggested that Tomtor might be managed by the state-owned Rosneftegaz holding, with development costs potentially offset against those of the Zvezda shipbuilding complex. The acquisition represents a significant consolidation of strategic resources under entities closely aligned with Russian state interests, reinforcing the country’s determination to develop domestic rare earth production despite international challenges.
