Russian President Vladimir Putin ordered the drafting of a national roadmap for rare-earth extraction by December, underlining his intention to enter the strategic minerals race.
As Russia sharpens its focus on rare earth elements, or REEs, the world’s clean energy ETFs may soon find themselves competing with a new class of contenders-the geopolitical commodities. These are the metals and materials sitting at the crossroads of green innovation and power politics, from lithium and nickel to the rare earths that keep EVs running and turbines spinning.
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With the fifth-largest REE reserves in the world, the move indicates a clear interest in challenging China’s refining dominance, as reported in Russian outlet TASS, cited by Politico.
That ambition injects new uncertainty into an already tense global supply chain. Clean energy makers and the ETFs tracking them are deeply reliant on these key inputs.
Enter The Commodities Contenders
Funds like the iShares Global Clean Energy ETF (NASDAQ:ICLN), Invesco WilderHill Clean Energy ETF (NYSE:PBW) and First Trust Nasdaq Clean Edge Green Energy ETF (NASDAQ:QCLN) have all risen this year, buoyed by optimism around renewable adoption. Their success still depends on a steady stream of metals that remain geopolitically fragile.
ETFs like the VanEck Rare Earth/Strategic Metals ETF (NYSE:REMX), Global X Lithium & Battery Tech ETF (NYSE:LIT), and Amplify Lithium & Battery Technology ETF (NYSE:BATT) are gaining traction as strategic hedges. They offer direct exposure to the mining and processing companies powering the energy transition.
These ETFs could be among the beneficiaries of policy tailwinds and private capital inflows as the U.S. and its allies scramble to secure non-Chinese supply chains. The race to strategically source critical minerals from politically aligned nations could add a new dimension to the ETF landscape, shifting it from clean energy consumption to clean energy security.
The Bottom Line
Putin’s rare-earth play may not derail clean-energy ETFs, but it redraws the investment map. In places where geopolitics and green energy collide, the smartest portfolios may be those that balance solar panels with shovel-ready mines.
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