Ukraine's untapped mineral reserves could be a game-changer
Ukraine boasts one of Europe’s largest reserves of critical minerals, worth an estimated £12 trillion and largely untapped.
Donald Trump’s highly transactional approach to foreign policy has shone a light this week on one aspect of the Russia-Ukraine war that has, until now, largely escaped global attention: Ukraine boasts one of Europe’s largest reserves of critical minerals, worth an estimated £12 trillion and largely untapped.
"I told them that I want the equivalent of like $500 billion worth of rare earths… I said to them: 'we have to get something. We can’t continue to pay this money,'”, Trump told reporters last night, as he insisted that the US should be granted permission to exploit Kyiv’s vast natural resources in return for the roughly $92bn it has spent helping Ukrainians resist Russia’s full-scale invasion.
According to the US President, Ukraine has “essentially agreed” to the rare earth minerals deal he has proposed.
Rare earth minerals are a group of 17 heavy metals that are found on the Earth’s crust worldwide. Demand for them is high - and only set to grow - because they are used to make magnets to turn power into motion for electric cars, phones, missile systems, aerospace and many other high-tech appliances.
Ukraine has an abundance of rare earths, alongside other critical minerals.
It is home to half a million tonnes of lithium, none of which has been tapped, making it the largest lithium resource in Europe. Lithium is a key ingredient for batteries and glass products.
Ukraine also sits on Europe’s largest reserves of titanium and uranium while its reserves of graphite - a key component in batteries and nuclear reactors - is one of the largest in the world, comprising 20 per cent of the globe’s overall supply.
According to the Institute of Geology, Ukraine also possesses rare earth elements such as lanthanum and cerium, used in TVs and lighting; neodymium, used in wind turbines and EV batteries; and erbium and yttrium, both key ingredients for nuclear power and lasers.
That Ukraine has no commercial rare earth mines in operation represents enormous unlocked potential.
But will Zelensky really allow Trump to exploit his own country’s reserves?
Actually, yes.
While Trump’s remarks sparked a backlash from German Chancellor, Olaf Scholz, who slammed Trump’s transactional foreign policy style as “very egotistic, very self-centered”, it’s worth remembering that this rare earth minerals deal was not dreamt up by Trump himself.
It was Zelenksy’s own suggestion. In the Ukrainian leader’s “Victory Plan”, presented to the US last Autumn, he dangled the idea of allowing western allies to develop his country’s vast natural resources in an apparent attempt to keep them on side.
On Friday, he reiterated that he is ready to do a minerals deal with Trump.
However, he also highlighted one rather large caveat to all of this: around half of Ukraine’s rare earth deposits are now under Russian occupation.
Russia controls around a fifth of its territory, and a little over £6 trillion of Ukraine’s mineral resources are contained in the four eastern regions Putin illegally annexed in September 2022, primarily in Luhansk, Donetsk and Zaporizhzhia.
Russian troops are also advancing in the region of Dnipropetrovsk, which borders the now largely occupied regions of Donetsk and Zaporizhzhia and contains an additional £2.8 trillion in mineral resources.
Titanium reserves are fairly safe for now since they are mostly located in northwestern and central Ukraine. As for lithium, Kyiv still controls lithium deposits in the central Kyrovohrad region but Russia has occupied at least two Ukrainian lithium deposits during the war: one in Donetsk and one in the Zaporizhzhia region. Another lithium ore in Donetsk is less than 10 miles from the town of Velyka Novosilka, recently captured by Putin’s forces.
Trump’s transactional approach to foreign policy is unlikely to faze Zelensky. He will simply be relieved that the US leader is receptive to a potential benefit of continuing to support Kyiv and, in doing so loudly, may be helping to convince his “America First” followers that they too can reap returns on the American money being funneled into a faraway war.
A rare earth minerals deal is also a good sell for Trump - who favours a foreign policy tilt away from Europe towards the Indo-Pacific - because it involves China too.
At present, China processes at least 90 percent of the world’s rare earths, giving it a near monopoly. The drive amongst western nations to reduce dependence on Beijing, for the sake of national security, makes Ukraine’s reserves all the more valuable.
Caitlin Allen
Deputy Editor
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