MOSCOW (Reuters) - President Vladimir Putin has offered the U.S. the opportunity under a future economic deal to jointly explore Russia's rare earth metal deposits that he says are greater than those of Ukraine.

Putin's offer followed negotiations between the U.S. and Ukraine over a draft minerals deal that is expected to be signed during Ukrainian President Volodymyr Zelenskiy's visit to Washington on Friday.

"I'd like to buy minerals on Russian land too. If we can, the rare earth. They have very good rare earth also, they both do (Russia and Ukraine)," Trump said, adding the deal would be beneficial for Russia as well as for the U.S..

China's control of 95% of global production and supplies of rare earth metals, crucial for industries such as defence and consumer electronics, has focused the rest of the world on trying to develop their own supplies.

Below is a description of Russia's rare earth metals industry:

RESERVES

Russia has the world's fifth-largest reserves of rare earth metals, according to U.S. Geological Survey (USGS) data, following China, Brazil, India, and Australia. 

USGS estimates Russia's reserves total 3.8 million metric tons.

Russia's estimates of its overall rare earth reserves are higher.

According to the Natural Resources Ministry, Russia has reserves of 15 rare earth metals totalling 28.7 million tons as of January 1, 2023 and that 3.8 million tons is the amount of reserves under development or ready for development.

Russian official documents on the industry's development point to low domestic demand for the metals, as well as strong competition from China, as the main barriers to the industry's development.

Russia aims to become one of the top five rare earth metals producers with up to 12% of the global market share by 2030, according to its sector development strategy.  

WHO MINES RARE EARTH METALS IN RUSSIA?

Russia's only producer of finished rare earth metals, Solikamsk Magnesium Plant, was taken from its former owners in 2022 over illegal privatisation allegations and handed over to state corporation Rosatom in 2023.

Rosatom, Russia's nuclear power monopoly, which has been actively diversifying into other high technology sectors, is responsible for developing rare earth production under a special "national project".

Solikamsk Plant receives loparite concentrate containing rare earth metals from Rosatom-controlled Lovoozerskoye deposits in the Murmansk region in northern Russia, the country's only functioning rare earth extraction site. 

The plant is currently processing about 8,000 tons of concentrate per year. Russian rare earth metals output accounts for about 1% of global production or about 2,600 tons.

RUSSIA'S PRODUCTION PLANS

Less than two hours after Trump's announcement that "major economic development transactions with Russia" would take place on February 24, Putin held a meeting on rare earth metals, saying the sector was a priority for Russia's economic development.

Last week, Putin also spoke about rare earths and other metals at a conference organised by his long-time friend, scientist Mikhail Kovalchuk, president of the country's leading research centre, the Kurchatov Institute.

In his speech, Putin lamented the loss of Soviet expertise in rare minerals extraction and use after the collapse of the USSR and called on the Kurchatov Institute, named after the Soviet atomic bomb creator, and Rosatom to focus on restoring it.

Last November, Putin accused the operator of Tomtor, Russia's largest rare earth metals deposit, of delaying the deposit's development, suggesting it should either raise investment or seek help from third parties, including the state.

Tomtor, located in the northern Siberian region of Yakutia, along with Zashikhinskoye in the Irkutsk region of Siberia, are central projects to Russia's plans to boost metals output. The launch of both extraction sites has been delayed. 

High technology enterprises, which are part of Rosatom or industrial and defence conglomerate Rostech, are likely to be the main domestic consumers of rare earth metals.  

(Editing by Barbara Lewis)