Keys to the minerals deal: Ukraine has critical metals, but not as many rare earths as Trump thinks

Like almost everything surrounding Donald Trump’s second administration, the agreement with Ukraine for the exploitation of the vast deposits of critical minerals in the European country is highly atypical. Firstly, because it is not a typical war reparation: Washington has not participated directly in the conflict, but has only provided economic and military support for Kyiv’s defense against the Russian aggressor. Secondly, because although Ukraine possesses significant mineral resources — some of them important for an energy transition that Trump himself rejects — there are serious doubts about its real potential in the field of rare earths. This is exactly where Trump has been focusing his attention for months.

Ukraine has substantial deposits of 22 of the 34 elements that the EU classifies as “critical raw materials” for their use in a multitude of cutting-edge industries, according to official data. At the beginning of 2022, shortly before the Russian invasion of Ukraine, the UN estimated that 5% of all critical minerals in the Earth’s crust are located in Ukraine. Only a year earlier, in July 2021, the EU had signed a strategic agreement that opened the door to future joint exploitation. A memorandum that was left hanging after Vladimir Putin’s attack.

Kyiv cites figures similar to those of the United Nations. “Ukraine occupies 0.4% of the Earth’s surface, but has around 5% of all critical raw materials,” said Minister of Environmental Protection and Natural Resources Svetlana Grinchuk. There is lithium, for example, a key element in the manufacture of batteries, although a substantial part of it is in two frontline regions: Donetsk and Zaporizhzhia. It also has a fifth of the world’s graphite deposits — equally important in the manufacture of electric cars — as well as titanium and some uranium, although, in both cases, far less than the world’s main producers.

So far, this is true and verifiable. The devil, however, is in the details. Trump has been championing the Ukrainian rare earths for weeks, to which he claims the agreement will give him access. A very specific set of 17 chemical elements that, as the U.S. president himself has indicated, are very rare in the earth’s crust but are also essential for several sectors. Among them, two that have gained relevance in recent times: renewable energy and defense.

Gracelin Baskaran, head of the critical minerals program at the Center for Strategic and International Studies (CSIS), and Meredith Schwartz, associate researcher at the U.S. think tank, seriously doubt that Ukraine’s real capacity is as high as the White House’s ambitions suggest. “There is very limited data on whether Ukraine’s rare earth elements and other strategic materials are commercially viable to mine [...] Existing mapping [on which all calculations are based] was done 30–60 years ago by the Soviet Union and relies on old exploration methods,” they write in a recently published analysis.

Late last year, Roman Opimakh, former director general of the Ukrainian Geological Survey, acknowledged the evidence: “Unfortunately, there is no modern assessment [of reserves],” he said in a conversation with the financial analysis firm S&P Global. Tony Mariano, an independent consultant with more than 40 years of experience in the field of geology, went one step further: “As far as I know, there are no economically viable rare earth deposits in Ukraine. I have evaluated clay deposits that I thought had potential, but I found that they are not viable. This does not mean that there are none, but that more exploration and evaluation is needed.”

The U.S. administration itself, through the U.S. Geological Service, does not mention Ukraine in the list of countries that hold significant amounts of rare earths, a table that is led by the power that overshadows Washington the most: China, with nearly 40% of proven reserves. Vietnam and Brazil are next, with nearly 20% each.

Aside from the fact that they exist in significant quantities, the second area of concern is the ability to exploit these resources. Mining is one of the most energy-intensive sectors in the world, and Ukraine has a serious problem in this regard: its electricity generation capacity has been reduced to a third of what it was before the war, according to the latest figures from the International Energy Agency (IEA). “So before we can begin to explore and extract minerals, a significant expansion of our energy infrastructure will be necessary,” Baskaran and Schwartz argue.

The third focus, they note, is the likely reluctance of mining companies to invest heavily in a country where security risks remain (and are likely to remain) huge. “Mining is a long-term and capital-intensive investment. Globally, it takes an average of 18 years to develop a mine — and costs $500 million and $1 billion to build a mine and separation plant. Confidence in the political and economic stability of a jurisdiction is critical given the size and longevity of the investment. While Trump, Putin, and Zelenskiy may reach a peace deal, the threat of further conflict and land expropriation will loom given the long-standing nature of the conflict.”

Far from $500 billion

“While Ukraine has a variety of mineral deposits, it is not rich in viable and scalable rare earth sites. That much we do know,” writes Ellie Saklatvala, senior metals analyst at British commodities consultancy Argus. “Ukrainian deposits have not been subjected to in-depth study, partly because the mining industry has prioritized others” that are immediately available (and profitable), such as iron ore, coal and titanium. “So it is possible that more will come to light, but not with a value of half a trillion dollars,” she concludes, referring to the magic figure put on the table by Trump.

Another indication: between late 2020 and early 2022, when the price of rare earths soared and with it the rush to search for new deposits, no one made a move in Ukraine. “It’s one thing to have rare earths in the ground, but it’s quite another to have a commercially viable deposit,” Saklatvala notes.

The calculations of Javier Blas, an analyst for Bloomberg and a leading figure in the field of raw materials, are equally clear: “Let’s suppose that Ukraine were able, as if by magic, to produce 20% of the world’s rare earths. That would be equivalent to $3 billion a year. To reach the $500 billion proposed by Trump, the U.S. would have to secure more than 150 years of Ukrainian production. Nonsense.”

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