THE REM WAR – RUSSIA AND CHINA
VERSUS TRUMP AND MUSK

by John Helmer, Moscow

Someone has convinced President Donald Trump of two simple ideas.

The first is that because the US auto, aerospace, and artificial intelligence industries are heavily dependent for their supplies of lithium, titanium and other rare earth minerals (REM) on two enemy states, China and Russia, they should be replaced as quickly as possible by a friendly source.

The second idea is that, in order to break this dependency, the cheapest solution is to take over the Ukrainian sources of these minerals and metals at zero cost of acquisition — zero cost because the Ukraine can be pressed to hand over its sources as payback for the US financing of the war against Russia.

The someone who convinced Trump of these two ideas was Elon Musk (see lead image).

His Tesla company is the largest consumer of lithium and producer of lithium batteries for electric vehicles in the US, with his annual tonnage exceeding the four next largest producers combined.   Musk also is a large consumer of titanium, both for Tesla cars and for his SpaceX company’s rockets.

Also, in Musk’s plans for cornering the artificial intelligence (AI) market with his xAI company, rare earth metals (REM) are essential. In fact, these metals are not rare – it’s just that they exist in low concentrations which are difficult and expensive to extract. They are crucial components of the semiconductors which provide the computing power that drives AI. They possess uniquely powerful magnetic qualities and are excellent at conducting electricity and resisting heat.

The problem with these ideas is that China will not give up any of its resources to its US enemy,  especially not in the conditions of trade war which Trump is threatening. Too, Russia is in kinetic war with the US on the Ukrainian battlefield, and will not allow either the US directly, or the regime it supports in Kiev, to obtain the REM.

The solution Musk and Trump have come up with is a proposal to stop insulting President Vladimir Putin in public and start negotiating terms for an end of war beginning with a scheme for taking the Ukrainian REM from Kiev as payback for the $350 billion Trump says the US has spent in the Ukraine since the war began.

The number is false; the idea of peace with Russia on these terms is a hustle.

Russia currently controls much of the Ukraine’s titanium, lithium, and REM, and the remainder of its mineable reserves are within easy shooting range. Russia’s own titanium, lithium, and REM reserves are much greater, but they are controlled for strategic reasons by state companies. No foreign investor would be allowed under Russia’s strategic minerals law — except to buy the offtake at the market price.

The Musk-Trump plan for peace with Russia and REM war with China, at zero cost to Musk, is a no-brainer. That’s to say, a scheme for simpletons.

However, as an international investor who knows both Moscow and Washington well points out, “there’s no shortage of American investors giving Musk billions to invest in colonizing the moon and then Mars. Why wouldn’t they invest in Ukraine? Musk has convinced Trump he should and they will .”

The European Union (EU) issued an analysis of titanium dependency shortly after the Special Military Operation (SVO is the Cyrillic acronym) began in February 2022.  Its report acknowledged that “Russia has a significant share and a key role in the global market of titanium metal. The Russo-Ukrainian war has put titanium metal supply at risk and threatens access to titanium products used in the aerospace sector. The analysis shows that a forthcoming deficit in titanium sponge supply is not expected globally as non-Russian producers could ramp up their output. For the aerospace sector in particular, a potential supply disruption may not be critical in the short term, mainly due to high industry stocks and the low – but gradually recovering – demand from the downturn that the sector endured as a consequence of the pandemic. On the other hand, it is challenging to predict the medium-term impact of cutting ties with Russian supply of aerospace mill products.”

In parallel, the US Government opened its war against Russian titanium, and was attempting to create alternative sources of supply in the Ukraine. There were no US commercial takers, especially since the principal source of Ukrainian production, the Zaporozhye Titanium and  Magnesium Combine (ZTMC), was located on the battlefield. Read more.

Source: https://johnhelmer.net/us-declares-war-on-russia-titanium/

Before the SVO began, ZTMC was part-state controlled and part-owned by the Ukrainian oligarch Dmitry Firtash’s DF trading group.   A fight over the trading proceeds between officials in Kiev and Firtash ended in the ouster of Firtash and the nationalization of his shareholding in May 2022.

What happened next at the plant, as the war intensified and the front line of the SVO moved towards Zaporzhye, isn’t clear.  The EU report said: “Ukraine is an important producer of titanium minerals (7% of the global output in 2019). In addition, the state-owned

Zaporozhye Titanium & Magnesium Combine Ltd (ZTMC Ltd) produces titanium sponge and ingots  of titanium and titanium alloys. The plant is located in Zaporozhye in southeastern Ukraine, which is currently (May 2022) under Ukraine’s control but close to the frontline. It is not known whether or not the production line is still in operation.”

The entire region of Zaporzhye became part of Russia in September 2022. At present, the Russian General Staff estimates that 72% of the territory is fully under Russian control. For comparison, here is a Washington, DC, map of the current combat lines in the oblast.

Lithium is a different story. For background on US production of lithium, which is a commercial operation by stock exchange-listed companies subsidized by the Pentagon;  and for details of Russian state control of its lithium reserves, read this.

Source: https://johnhelmer.net/kick-start-or-kick-over-can-the-us-defeat-russia-in-the-lithium-battery-war/

In the US Musk’s domination of the lithium battery market for electric vehicles (EV) is illustrated by this chart:

Source: https://www.mining.com/tesla-consumes-more-lithium-than-four-closest-rivals-combined/
“The company led by Elon Musk deployed 18,700 tonnes of lithium carbonate equivalent onto roads globally in the batteries of its newly sold passenger EVs. This is more than its four closest rivals — BYD, Volkswagen, Renault, and Audi — combined.”

For Musk to acquire control of the top-5 companies producing lithium in the US would cost him, at the current market capitalization, almost $12 billion.

Lithium in the US:

Source: https://greenstocknews.com/stocks/battery-metal-stocks/lithium-stocks 

Musk’s and Trump’s scheme is to capture the REM offshore instead. The proposed Ukraine minerals agreement for signing by Trump and Zelensky would represent capital outlay saved, together with the prospect of continuing Pentagon subsidies of development costs and tax optimization through transfer pricing and other Ukrainian schemes. Read more on the Ukraine minerals agreement here.

In Moscow public discussion of how the Kremlin should respond to Trump’s REM deal with the Zelensky regime has begun in an interview with a Russian REM trader, Alexander Toporkov, which appeared in Vzglyad earlier this week.

Source: https://vz.ru/economy/2025/3/3/1317712.html 

To the verbatim translation into English which follows, links, charts, captions, and illustrations have been added to help the reader.  Vzglyad’s writers, who depend on official approval,  have sanctioned the English language and writers in that language as hostile in the present war with the exception of those authorized by the Russian state media.

March 3, 2025
How the world became dependent on China for rare earths
Interview of Alexander Toporkov by Olga Samofalova

The topic of rare earth metals has become one of the high-profile topics on the news agenda, not only in the United States and Ukraine, but also in Russia.

Alexander Toporkov, an expert in the supply of rare earth metals, explains in an interview with the newspaper Vzglyad why the struggle for mineral resources rich in rare earth metals has begun in the world, whether Russia has the necessary technologies for this,  and how China’s experience will help us.

The Ministry of Industry and Trade has announced a goal to increase the production of rare earth metals in Russia to 50,000 tonnes and estimated [the value of] these resources at 100 billion rubles [$1 billion]. Moreover, Russia has invited the United States to participate in the development of this industry.

One of the first Russian oligarchs to announce a new REM project (scandium) is Oleg Deripaska. This is his Rusal press release on February 27.

The interest in these metals is explained by the fact that they are needed in the production of high–tech products: smartphones, electric vehicles, lasers, airplanes, medical equipment — and not only in the civilian, but also in the defence industry.

Russia has so far modest production volumes of these elements. If China produces 270,000 tonnes of REM, and the United States produces 45,000 tonnes, then Russia produces only 2,600 tonnes per year (according to American data). As a result, China occupies 70% of the global market, the USA – 11.5%, and Russia – less than 1%. A total of 390,000 tonnes of such metals are produced in the world.

Source: United States Geological Survey, January 2025

Alexander Toporkov, director of TDM96, which has been supplying Rusian consumers with  rare earth metals from China for more than fifteen years, told the newspaper in an interview why the struggle for rare earth metals began in the world, whether Russia has its own technologies for their extraction and production, and how China’s experience will help us.

Q:  Why did such a race for rare earth metals begin in the world? Did the United States urgently need them? Whoever will have access to inexpensive rare earth metals, he will be the ruler in the future – is this the logic?  Does the US not want to depend on China for these metals in order not to lose its economic leadership?

Alexander Toporkov: The phrase “technological security” is more appropriate here, because both America and Russia have placed the RM (rare metals) and REM (rare earth metals) markets in the hands of China, and modern technologies can no longer be imagined without them. Technological security is expressed in reducing dependence on other countries, especially countries claiming to have a certain dominance in the world (especially now); therefore, RM and REM play a key role in technological independence.

Russia and America became dependent on China back in the 2000s, when China emerged as a monopolist in this industry. America had and still has its own sources of REM, and they were developed, but the inability to compete with Chinese companies at the time led to a reduction, and in some cases, to the closure of enterprises in this industry. And Russia didn’t pay much attention to this industry at all, because there were other problems.

Q: Why is Russia, having its own rich set of rare earth metals, lagging behind in their production?

AT: It was only at the turn of 2018-2019 that the first “roadmaps” for many technological industries appeared. Therefore, Russia is not lagging behind China in the REM market — we were simply absent from this market. Just as we are still absent from the smartphone market, microelectronics and other related knowledge-intensive industries. Everyone was satisfied with the cheap Chinese market, even America. It was only when China began using the RM and REM as a significant lever in waging new sanctions wars (back in the first term of Donald Trump’s presidency) that everyone saw that China was alone in this market and could easily manipulate it.

Q: How did China manage to reach its current heights? China produces 270,000 tonnes of RM and REM, accounting for 70% to 90% of global production. What did it do to achieve this, and what experience could we learn from?


Source: https://www.statista.com/statistics/270277/mining-of-rare-earths-by-country/

AT: China acted wisely. Back in the mid-1980s, China noticed that their eternal enemies, the Japanese, were actively acquiring their RM and REM in the form of semi–finished products. And only then did the Japanese return high value-added goods, such as cars and electronics, to the Chinese market. Beijing concluded that it was necessary to sell, not semi–finished products, but highly processed products – oxides and metals of RM and REM. China began to raise the level of this redirection, earn more at Japan’s expense, and invest this in the development of its own country.   Accordingly, it is unlikely that we will be able to learn from China’s experience – there will no longer be a temporary or similar situation for Russia.  We need to develop ourselves. In addition, ore containing RM and REM is more difficult for us than for the Chinese, so their experience will not even suit us,  geologically speaking.

When the issue of technological security became acute in Russia, manufacturers ran into the state bureaucracy. Officials asked the question, whether Russia should first develop domestic consumers of rare earth metals, and then create production of domestic rare earth metals, or vice versa – first create production of domestic rare earth metals, so that consumers within the country would appear for them. Because of these doubts, the industry has been stagnant for a long time. If we learn from China’s experience, it is this: they did not develop the RM and REM market for their domestic consumers, they simply did not exist. They have created a production facility for which domestic technological consumers have then appeared.

Yes, China copied and continues to copy from the leading technological industries (electric vehicles, smartphones, electronics, etc.), but they do it with their own raw materials.

Q: The Ministry of Industry and Trade sets a goal to start producing 50,000 tonnes of REM by 2030, worth 100 billion rubles. What is necessary for this?

AT: The Ministry of Industry and Trade intends to open a plant for the production of REM  magnets based on the Chepetsk Mechanical Plant in Glazov (Udmurtia) in 2028. This makes sense: the plant extracts metals from ores (hydrometallurgy), so God himself told it to separate RM, REM and refractory metals. The plant specializes in refractory niobium.

The Chepetsk plant is wholly owned by the Rosatom, state nuclear energy conglomerate.  It produces zirconium, titanium, niobium, calcium, and related metal alloys and byproducts. Source: https://chmz.net/en/

However, the Chinese train is already racing at an unprecedented speed, and it’s hard to keep up with it.  Russia needs to produce a certain number of tonnes of RM and REM in order to secure, first of all, the domestic consumer,  and to ensure technological security on its own material base.

Q:  What competitors does Russia have besides China in the global REM market, which is expected to grow by 10% per year?

A. T.: America is a serious competitor. The Americans have their own production facilities, including a Molycorp Silmet plant in Estonia. Brazil is also a potential competitor, based on the well–researched and internationally recognized data on RM and REM reserves. But I wonder who will be able to join this race faster and who will master this race?

The Molycorp Silmet plant is now owned by the Toronto-listed Neo Performance Materials corporation. For its financial results, click to read.

Q: Trump is talking about the huge deposits of REM in Ukraine. How justified are such estimates, in your opinion?

AT: The Americans are interested in titanium and lithium. Everything that Trump’s right–hand man, Elon Musk, uses so widely in the production of his companies. As for the Ukraine, there are indeed RM and even REM in its eastern regions; in Soviet times there were strong enterprises in this industry. And one thing, in my opinion, is still working even now,  although I cannot say for sure. At least until 2014, there were Ukrainian REM materials on our market. But whether they were “fresh” either from state storage, that is from Soviet warehouses, or fifty-fifty, is the question.

But there were RM and REM enterprises in Kyrgyzstan and Kazakhstan in the same way. Why don’t the Americans negotiate with the post-Soviet republics? And since when did the United States manage to conduct its own independent geological exploration in Ukraine in order to be confident of the [press releases claiming] these phenomenal figures?

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https://johnhelmer.net/the-rem-war-the-russian-state-versus-trump-and-musk/