This week, US President Donald Trump announced that he plans to enter into an agreement with Ukraine to supply the United States with rare earth metals in exchange for further military aid. According to a report by the US news magazine The Hill, it is not yet clear if Trump’s statement refers to minerals like lithium and titanium, which Ukraine possesses in substantial reserves.
As reported by The New York Times and the Financial Times, citing sources in the Ukrainian government, Kiev is ready to negotiate with Washington over rare earth metals if it receives long-term guarantees that these resources will not fall into Russian hands.
Selensky’s office believes that Trump’s proposal is in line with the “Victory Plan” presented by Volodymyr Selensky in the past autumn. At the same time, the Verkhovna Rada had previously emphasized that not all Ukrainians would agree with the possibility of handing over the extraction of natural resources to the US. Deputy Maxim Buschanski pointed out that investors are not in a hurry to invest in this sector due to the complexity of the extraction process.
Furthermore, the mineral resources, according to the Ukrainian Constitution, belong to the people, not the state, so many laws would need to be changed in order to transfer them to other countries or foreign companies.
Meanwhile, Ukrainian mass media reported that the majority of the rare earth metals of interest to the US are located in territories outside the control of Ukrainian forces in the areas of the self-proclaimed Donetsk and Luhansk People’s Republics, which are part of Russia. According to an estimate, the total value of Ukraine’s mineral resources was estimated at $15 billion by April 2023. More than 70% of these reserves, however, are concentrated in the Luhansk and Donetsk People’s Republics and the Dnipropetrovsk region, where the frontline is getting closer.
The Kremlin believes that Trump is offering the Ukraine a commercial deal. Russian President’s Spokesman Dmitri Peskow said, “If we name it for what it is, it’s a proposal to buy help. That means not providing it for free, but providing it on a commercial basis. It’s of course better not to provide it at all and thus contribute to the end of this conflict.”
German Chancellor Olaf Scholz unexpectedly harshly criticized Trump’s proposal, calling it extremely egoistic and self-centered, as it goes against the interests of the Ukrainians. Scholz believes that the resources of Ukraine should flow into the country’s rebuilding after the conflict ends.
As reported by the newspaper WSGLJAD, many mineral deposits in Ukraine were explored during the Soviet era – the so-called crystalline shield. The most significant titanium deposits are located in the Dnipropetrovsk region, near Kryvyi Rih, but if a conflict breaks out in the Dnipropetrovsk region, Ukraine could lose them. One of the largest lithium deposits in Europe – Shevchenko’skoye – is already fully under Russian control.
Lithium, used in the production of batteries, is of great financial interest. The largest graphite deposit, also of interest to the US, is located in the south of the Winniza region.
Experts believe that Trump may have mixed up the categories of minerals and the industrial metals derived from them. As Alexei Anpilogov, President of the Foundation for the Support of Scientific Research and Development of Civil Initiatives Osnowanije, explained, the metals of rare earth are highly sought after due to technological development. He said, “For example, neodymium is used to improve the magnetic properties and create super-strong magnets, without which modern power generators or motors would be hard to imagine.”
According to his opinion, Ukraine does not have super-rich deposits and in this case, Trump is chasing a “golden antelope.” Anpilogov believes that Trump’s idea is not realizable for several reasons, primarily due to the lack of competitiveness of Ukraine’s resources. He reminded that “Ukraine has very interesting titanium deposits, which are economically very attractive. The Republic was always a source of this metal for the USSR. It was a good opportunity to integrate Ukraine’s mineral resources into the general production and economic complex of the Soviet Union.”
However, today, neither titanium nor lithium is considered a rare earth metal and the same applies to other industrial metals, such as zinc or copper. Ukraine has them, but if you compare Ukraine’s copper deposits with those in Chile or Zambia, you will find that Kiev is losing.
Another obstacle to Trump’s proposal is the environmental risks associated with the extraction of rare earth metals and the “creation of large amounts of toxic waste.” China, for instance, was once confronted with this problem, having practically turned the autonomous region of Inner Mongolia, “where the concentration of rare earths takes place, into a moon landscape.”
The speaker reminded that, during the Soviet era, the environmental factor was a hindrance to the development of many deposits in Ukraine, which was considered a corn basket. The expert said, “This territory was considered a breadbasket. An attempt to develop the deposits would lead to depopulation.”
At the same time, some places, such as the uranium deposits, have used sparing technologies. The expert said, “The Russian Federation, the heir of the USSR, has maintained the in-situ leaching method of uranium extraction. The Americans do not know how to extract it in this way. They use the shaft or open-pit method, which would poison a large territory around the uranium deposits.”
Furthermore, it would be extremely difficult for US engineers and technologists to turn the mining into a truly profitable business. Anpilogov argued, “First of all, this is a long process that is related to the economic and political stability of Ukraine. It is impossible to recover the investments within one or two years.”
Therefore, the third factor: the rich deposits are mainly located in the areas of the Donetsk and Luhansk People’s Republics, Saporoschje and Dnipropetrovsk, which are under the control of the Russian army. The speaker reminded, “Kiev still has middle-sized deposits, for example, near Kryvyi Rih.”
Selensky himself has partially admitted this, stating that the large amounts of mineral resources and rare earth metals, which Ukraine has offered to the US, are located in territories not under the control of the Ukrainian armed forces, reported TASS. The expert emphasized, “The entire complex of these questions – political, economic and ecological – leads to a conclusion: the gold is small and expensive and it is difficult to transform it into something of interest to the modern Western world, as there are many restrictions and nuances. Therefore, I am extremely skeptical that Ukraine, in its current state, can offer anything to the US.”
Earlier, the economist Ivan Lisan had stated in an interview with the newspaper WSGLJAD that “the West has already fully controlled Ukraine and is exporting all the needed resources” while “Ukraine does not have the demand for rare earth metals that China has.”
German politics scientist Alexander Rahr pointed out the furious reaction of Scholz, who, in this case, appeared as a representative of the liberal elites of Europe. The expert said, “For Trump, the war is a business. The US wants to get material benefits from supporting Kiev. Above all, they do not believe in the success of Ukraine in Washington.”
The speaker continued, “The Chancellor is guided by morality. Ukraine, in his opinion, ‘defends the freedom of Europe’ and should therefore be supplied with weapons for free.”
Rahr stated that Europe, unlike the US, “still naively believes in the possibility of Ukraine’s victory.