Ukraine's mineral wealth has become the focal point of a potential economic pact between Kyiv and Washington, raising questions about the true value of the nation’s resources. President Volodymyr Zelenskyy is expected to visit Washington soon to discuss a deal with former President Donald Trump that could see Ukraine and the U.S. jointly developing and commercializing deposits of rare earths, critical minerals, oil, gas, and other natural resources. The deal is reported to be valued at $500 billion by Trump, who regards it as compensation for U.S. aid during the ongoing conflict with Russia.
Experts, however, remain skeptical about the estimation and accessibility of Ukraine's mineral deposits. Analysts from the Atlantic Council have pointed out that Ukraine does not possess large quantities of rare-earth elements, contradicting certain claims of the country's mineral wealth. Despite this, the United Nations and Ukraine's Deputy Minister of Environmental Protection and Natural Resources, Svetlana Grinchuk, have both acknowledged significant deposits exist.
The complication lies in the location of these resources. A substantial portion of Ukraine's mineral wealth is situated in territories currently occupied by Russia. Reed Blakemore, director of research and programs at the Atlantic Council's Global Energy Center, emphasized that "a significant portion of these resources, both active and underexplored, are in the eastern third of Ukraine." This situation potentially denies revenue to Ukraine and increases Russian influence across critical supply chains.
"Russia currently occupies over 60% of Ukrainian coal mines, and a share of caesium, lithium, manganese and rare earth deposits [which] potentially denies revenue to Ukraine and deepens Russian influence across supply chains" – Reed (no last name mentioned)
Another layer of complexity arises from the logistical challenges associated with extracting and processing these minerals. Robert Muggah, founder of consultancy the SecDev Group, notes that "actually getting it out of the ground is an entirely different matter," highlighting the difficulties in making these resources commercially viable.
"For a deal to really de-risk the U.S. minerals supply chain, more infrastructure is likely needed to ensure that the newly acquired mineral ores don't flow toward Beijing" – Reed (no last name mentioned)
Reed Blakemore further noted that while Ukraine holds significant reserves of titanium, graphite, and lithium—resources essential for the U.S. defense industry and high-tech economy—the United States lacks sufficient infrastructure to transport and refine these ores at scale in Europe or North America.
"What it has instead is significant reserves of titanium, graphite, and lithium, which are foundational resources for the U.S. defense industry and wider high-tech economy" – Reed Blakemore
"China remains far and away the dominant market force in minerals refining and processing" – Reed (no last name mentioned)
Given China's stronghold over mineral refining and processing markets, this adds another layer of urgency to diversifying supply chains away from Beijing's influence.
Nataliia Shapoval, head of KSE Institute, has suggested that while Trump's valuation for the deal might be theoretically possible, other estimates remain confidential. She further commented on the historical context of valuations by stating that numbers from Soviet-era assessments are lower than today's figures.
"There, the numbers are lower and may be not in the trillions" – Nataliia Shapoval
"Other estimates are still confidential" – Nataliia Shapoval
The proposed economic agreement aims to prevent further Russian aggression by leveraging Ukraine's mineral resources as strategic assets. Trump has emphasized this aspect as a pivotal reason for advancing negotiations with Kyiv. Meanwhile, Ukraine could potentially mend its strained relations with the U.S. by offering access to its critical mineral deposits.