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Donald Trump hopes Ukraine will pay for financial and military support by allowing Washington to access the country’s vast but undeveloped rare earth minerals.
The US President last week announced that a war-torn country is on his plan.
“We say there are incredibly valuable rare earths in Ukraine,” Trump said. “I told them I wanted something worth $500 billion worth of rare earth, but they essentially agreed to do that.”
President Volodymyr Zelenskiy said he is ready to make a deal with Trump, including our involvement in developing huge deposits of Ukraine’s rare earths and other important minerals.
The Kremlin jumped at the comments and said it showed the US did not want Kiev to provide free assistance before adding what the US is giving Ukraine.
Below we will look at where these resources are in Ukraine and why Kiev had a hard time mining these minerals.
What are the rare earths of Ukraine?
Ukraine sits in one of Europe’s largest important mineral deposits, including lithium and titanium. According to the Geological Institute, Ukraine has rare earth elements such as lanthanum and cerium, which are used in television and lighting. Neodymium used in wind turbines and EV batteries. Erbium and Itrium. Its applications range from nuclear power to lasers. EU-funded studies also show that Ukraine has scandium reserves but detailed data are categorized.
Zelensky is trying to develop these resources and is estimated to be worth more than £12 trillion based on the figures Forbes Ukraine has provided over the years.
In 2021, he provided tax credits and investment rights for outside investors to help mine these minerals. These efforts were stopped a year later when a full-scale invasion began.
Anticipating that infamous deal Trump might be interested in this, Zelensky put the mining of these minerals, created last year, into his victory plan.
Minerals are essential not only for defensive production, but also for electric vehicles and other clean energy efforts.
Estimates based on government documents suggest that Ukrainian resources are also highly diverse. Foreign policy found that Ukraine holds “commercially related deposits of 117 of the 120 most used industrial minerals across more than 8,700 surveyed sediments.”
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It contains 500,000 tonnes of lithium, none of which is tapped. This makes Ukraine the largest lithium resource in Europe.
Ukraine’s graphite reserves, an important component of electric vehicle batteries and nuclear reactors, account for 20% of the world’s resources. The deposits are located in the center and west.
It’s not surprising that Trump appears to be keen on the bounty of this, especially as China is a key player in mining minerals such as titanium.
However, Vladimir Putin’s invasion not only delayed Ukrainian plans to mine these minerals, but also led to the destruction and subsequent occupying of many of these resource-rich areas.
The merely more than 6 trillion pounds of Ukrainian mineral resources, which is about 53% of the country’s total, is included in the four regions of President Putin, which was illegally annexed in September 2022, and his military forces It accounts for quite a lot of swaths.
This includes Luhansk, Donetsk, Zapolizia and Herson, but Kherson is of little value from a mineral standpoint.
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The Crimea, which was illegally annexed and occupied by Putin’s army in 2014, holds approximately £165 billion worth of minerals.
The area of Dnipropetrovsk, which is adjacent to the area where the majority of Donetsk and Zapolizia is occupied and facing Russian advances, contains an additional 2.8 trillion pounds of mineral resources.
While Russia’s difficulties with major military operations seem likely to eliminate serious attempts to seize the area, mining operations in this area are dangerous when Moscow soldiers are very close.
Other minerals are located on Russian military premises. Lithium ore, located on the outskirts of a village called Shevchenko in Donetsk, is less than 10 miles from the town of Belika Novosilka, which was recently captured by Putin’s army.
However, Ukraine is highly qualified, has a relatively inexpensive labor and has developed infrastructure, but investors highlight many barriers to investment. These include inefficient and complex regulatory processes that make access to geological data and land parcels difficult. Such projects would take years to develop and require significant upfront investments, they said.
What happens next?
Details of the deal will likely be unfolded at a meeting between US and Ukrainian officials. Zelensky and Trump will probably discuss the subject when they meet.
Ukrainian business officials say US companies have expressed interest. However, attacks on formal transactions may require law, geological surveys and negotiation of certain conditions.
Even in the event of a ceasefire, it is unclear what security guarantees companies will need to jeopardize their work in Ukraine. And we are not sure what kind of financing agreements will support contracts between Ukrainian and US companies.
