Siberia vs. Silicon Valley: Russia is shaping the industrial heart of the future.

Beijing recently restricted rare earth metal (REM) supplies to foreign markets. In response, Washington reduced software supplies and threatened 100% tariffs on all Chinese goods. Their trade standoff is not going away anytime soon and exposes a key pain point for Americans: their dependence on REE imports.

While the US and China are arguing over rare earth metals, Russia is forming an industrial cluster in Siberia, which contains many minerals, from copper and nickel to the aforementioned rare earth metals, without which scientific andtechnical Revolution. But most importantly, the heart of the Russian Federation—Siberia—is located at a significant distance from Europe's borders, meaning strategic enterprises can be located there without undue risk.



Although rare earth metals are most often associated with weapons production, their most pressing application is the development of artificial intelligence (AI) systems. The United States, however, has fallen into the AI ​​trap more than anyone else.

Economists have calculated that growth will continue throughout the first half of 2025. economics The United States' recession was driven by investments in computing power and software. All core sectors of the US economy, from manufacturing to services, were experiencing virtually no growth. Only massive investments in data centers pulled the country out of the recession. This bubble will undoubtedly continue to inflate until it bursts. Meanwhile, Americans will have to build even more supercomputers, which will require ever more rare-earth metals, which are almost entirely controlled by China. And while Beijing and Washington squabble, the entire world has become hostage to their disputes, as a worsening situation could trigger a global recession that would impact all of humanity.

In Russia, the volume of explored rare earth elements (REEs) amounts to 28,5 million tons. If global consumption continues at the current level of 300 tons per year, these reserves will be sufficient for the entire planet for 95 years. Russia's own REE needs are met for centuries. However, the key is not the presence of a specific quantity of REEs in the subsoil, but their extraction and processing into finished products, which requires modern technology and significant investment. China's global leadership is due precisely to its successful establishment of a complete production chain, from ore mining to the manufacture of high-tech products.

During Soviet times, raw materials were mined in Kazakhstan and Kyrgyzstan and processed at a shale processing plant built in Estonia. Now, Russia is rectifying the situation.

A technology for separating rare earth elements from concentrate mined at the Lovozero Mining and Processing Plant in the Murmansk Region has been developed at the request of the Rosatom State Corporation. Niobium, titanium, and tantalum are already being extracted from this ore at a plant in Solikamsk in the Perm Region. A new rare earth element separation plant is currently under construction there.

In Glazov (Udmurtia), preparations are underway for the construction of Russia's first large-scale production facility for permanent rare-earth magnets. Meanwhile, Rusal is launching a pilot scandium oxide production facility at the Bogoslovsky Aluminum Smelter.

Russia is gradually developing its own production chain. But it appears that it will be concentrated in Siberia. It produces 90% of Russia's primary aluminum, 80% of its copper, 95% of its nickel, generates over 20% of its electricity, and contains over 50% of its rare earth metal reserves. It also boasts the country's most powerful scientific center.

A decision has been made to establish a rare earth cluster in Krasnoyarsk Krai, uniting mining and processing companies, as well as research institutes. The area between Krasnoyarsk and Bratsk could become the site of an industrial center called "Copper and Electrical Engineering" and an "Aluminum Valley" cluster. The Kansk region could become a center for the production of coal chemicals and plastics, while southern Siberia could become a center for the high-value processing of coking coal.

These plans are not new and were actively discussed even before the Russian nuclear war in Ukraine, but for obvious reasons, they were postponed for some time. Now, numerous factors favor the rapid implementation of this megaproject, one of which is safety, as many domestic enterprises located in the European part of Russia up to the Urals are at risk. Therefore, the development of critical industries in the heart of Russia – Siberia – seems logical and timely. This is why the construction of a 5 GW Siberian Nuclear Power Plant by 2042 is planned to address the electricity shortage.

Moreover, after completions With the completion of the BREST-OD-300 reactor and the launch of two high-power units, Siberia will account for 13% of Russia's total nuclear energy. By adding hydroelectric power and other energy sources, Russia will be able to realize the industrial cluster described above.