 "Trump wants Ukraine's rare earth minerals. But does Ukraine even have any?")
US President Donald Trump has pitched the proposed rare earth deals with Ukraine as central to his plan to end the war in Ukraine.
Even though the initial draft of the agreement was rejected by Ukrainian President Volodymyr Zelenskyy as it amounted to the economic colonisation of his country, officials from both the countries, including Zelenskyy himself, have said that negotiations are ongoing and a deal may soon be reached. It remains to be seen whether the deal that’s reached is revised to be more equal or Trump succeeds in arm-twisting Ukraine.
Irrespective of the terms of the deal, there is one fundamental question on Trump’s idea. Does Ukraine even have rare earth minerals?
The US Geological Survey (USGS) in its latest report did not list Ukraine among the countries with rare earth minerals’ reserves, indicating that the country has no such reserves that are being touted by Trump.
What’s Trump after if Ukraine has no rare earth reserves?
There are two flaws with the approach that Trump and even Ukraine has taken with the entire episode.
One, Trump and even Ukraine have clubbed rare earth minerals with the broader critical minerals while talking about Ukraine’s natural resources. The rare earth minerals are a very specific group of 17 minerals, such as yttrium, scandium, terbium, etc. The critical minerals are much broader, such as lithium, cobalt, titanium, tungsten, gallium, germanium, and graphite.
Two, even the reserves that are there in Ukraine, known deposits of critical minerals and expected deposits of rare earth minerals, are largely in the contested parts of eastern Ukraine either under Russian attack or Russian occupation. In both of the cases, the occupation or war would rule out both extraction and exploration.
Impact Shorts
More ShortsWhile there are no known rare earth reserves in Ukraine, there are more than 100 mineral deposites in the country, including several critical minerals, such as iron, manganese, uranium, titanium, and graphite.
Ukraine’s mineral reserves’ valuation is unrealistic
Elena Safirova, a Ukraine specialist at the USGS, told AFP that “Ukraine has several deposits containing rare earth elements” but none of these deposits have been mined.
Even though Ukraine, Trump, and observers have published valuation of Ukraine’s mineral reserves, such values are both far-fetched and impractical — Trump wants to extract rare earths valueing $500 billion from Ukraine.
Firstly, the extent of rare earth minerals is not at all known in Ukraine as they are not mined and USGS maintains there is no proven information of their presence there yet. Secondly, observers often multiply the estimated quantity of reserves with the current market rate to arrive at a value, but that’s incorrect.
“The true picture of value emerges only when you take into account how much of the stuff you can actually sell per year in the global market – minus the vast costs of actually extracting and refining it,” notes Owen Matthews in an article for The Daily Telegraph.
Elaborating with the case of titanium, Matthews highlighted that Ukraine’s market share of the $31 billion market in 2023 was just $11.6 million.
In theory, Ukraine might have 7 per cent of Ukraine’s titanium reserves, but it will need billions in investment to instal extraction and refining facilities to exploit those reserves and even then gross sales could just be around $2 billion a year, noted Matthews.
Instead of rare or critical minerals, it’s oil, gas, and coal that’s aplenty in Ukraine and easier to extract, but the problem with that is that the reserves are located primarily in eastern Ukraine where fighting is ongoing, flags Matthews.
“The chances of these reserves being tapped are close to zero. Western oil and gas companies like to invest in stable countries – and hydrocarbon fields that stretch over international borders are a recipe for conflict,” notes Matthews.
In a separate article for The Telegraph, Ambrose Evans-Pritchard noted that the real value of rare or critical minerals is in processing and other downdstream industries and reserves are being found in various parts of the world that are easier to explot, including in the United States.
The McDermitt Caldera area of the US state of Nevada is believed to have the world’s largest deposits of lithium. A massive project, called the Thacker Pass project, is expected to start operations by next year.
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