Ukraine’s rare earth mineral wealth? It barely exists

 

Ukraine’s rare earth mineral wealth? It barely exists

What we are seeing is ill-informed fools arguing over nothing.

A new front has opened in Ukraine’s conflict over who will control the country’s supposedly vast mineral wealth after the fighting ends. Last week, Donald Trump bluntly stated that he wants “something like $500 billion in rare earths” and claimed that Ukrainians “have basically agreed to it, so at least we don’t feel stupid.” Over the weekend, Volodymyr Zelensky disagreed, telling reporters in Kiev that he would not sign something that ten generations of Ukrainians would pay for later.

There's a small problem. All this talk about billions or even trillions of dollars in Ukraine's mineral wealth is just a fairy tale. In practice, it doesn't exist. "What Ukraine has is scorched earth; what it doesn't have are rare minerals," says Javier Blas, a columnist for Bloomberg Opinion"Surprisingly, many people – including US President Donald Trump – seem convinced that the country has a huge mineral wealth. It's nonsense."

According to US Geological Survey, “Ukraine is not known to have any reserves of major rare earth elements” – a list of 17 metals used in small quantities in semiconductors, high-speed electric motors and other technologies. But Ukraine has none of them.

But let’s assume Trump was wrong. What he really meant were “critical” non-rare minerals, such as lithium, uranium, gallium and titanium. And, indeed, Ukraine has the largest deposits of lithium in Europe – a soft metal vital to the battery and electric vehicle industries. It also has two percent of the world’s known uranium resources, seven percent of the world’s titanium, and reserves of cobalt, graphite, copper and nickel. Republican Senator Lindsey Graham last year enthusiastically described Ukraine as “the richest country in all of Europe … with two to seven trillion dollars worth of minerals that are rare and important for the 21st century. Ukraine is ready to work with us, not with the Russians.”

Graham's vision for Ukraine made the country look like an Eldorado for profits and of global strategic importance. It's no wonder that Trump's team reacted with dollar signs in their eyes.

Unfortunately, this brilliant picture of a mineral-rich country on the Dnipro is based on a simple calculation error. The wrong way to calculate the value of mineral reserves is to multiply the estimated tonnage that may exist underground by the current world price. But that is not a real figure. The true value only emerges when you consider how much of this wealth can actually be sold each year on the global market – minus the huge costs of extraction and refining.

Take titanium, for example. In 2023, the entire global market for this strong, super-light metal was worth $31 billion. Last year, Ukraine exported just $11.6 million — not a billion — in titanium-containing minerals. Although Kiev theoretically controls seven percent of the world’s titanium reserves, billions in investment would be needed to create the refining capacity to produce more valuable, exportable titanium. Even then, seven percent of the global market would amount to gross sales of just over two billion dollars a year.

It’s the same story with lithium. In Lindsey Graham’s fictional world, Ukraine’s estimated 500 tonnes of reserves could be worth between $10 billion and $12.5 billion at current prices. But global lithium sales in 2024 were just $37 billion — a 22 percent drop from the previous year, due to oversupply and weak demand. So far, according to a recent report from BNE Intellinews, “Kiev has not yet started exploiting its reserves [and] does not produce any lithium.” Moreover, some of the most promising deposits, such as those at Kruta Balka in the Zaporizhia region, are partially under Russian control.

Ukraine’s uranium exports have increased by 250 percent since the start of the war – but these exports were still worth just $29 million in 2023. Russia dominates the global market for refining the crude uranium “yellowcake” used in nuclear reactors around the world – including the US, which still relies on Russian supplies. The likelihood that Ukraine will export its uranium ore to Russia for refining is almost nil. Ukraine’s graphite exports last year were just $XNUMX million. And the list goes on.

What Ukraine is truly rich in is natural gas and coal – a treasure discovered by Welshman John Hughes in the 2014th century in the Donets River valley. In fact, the city of Donetsk was once named Hjusovka in his honor. The problem is that all these vast, untapped gas reserves lie right under the current front line, while many coal mines have been under Russian control since XNUMX. The chances of these reserves being exploited are close to zero. Western oil and gas companies prefer to invest in stable countries – while hydrocarbon fields that stretch across international borders are a recipe for conflict.

It was the Ukrainian government that started the myth of Ukraine’s vast mineral wealth. Looking for a way to engage the newly elected Trump administration, they produced a report called “Ukraine: Critical Minerals Portfolio” in November of last year. Their exaggerated claims were spread by NATO Energy Security Center of Excellence, a Lithuania-based NGO, which in a December 2024 report enthusiastically declared that “the strategic importance of Ukraine’s critical materials cannot be underestimated … These resources are essential for industries such as defense, high-tech, aerospace, and green energy.” Ukraine’s ability to provide these minerals is “crucial for countries seeking to reduce dependence on undemocratic countries such as China, Russia, Iran, and other undemocratic regimes.” Thus was born the Graham-Trump narrative of Ukraine’s vast wealth and its extraordinary geostrategic importance.

The US has made this mistake before. In 2010, the Pentagon, citing a Soviet-era geological survey, enthusiastically declared that Afghanistan was the “Saudi Arabia of lithium,” due to its untapped mineral deposits worth a trillion dollars. But the global market was already oversaturated, and no economic boom ever materialized.

The Trump administration has allowed itself to be portrayed as a group of predatory colonialists, grabbing a country’s resources in exchange for military aid that should actually be provided as aid, not trade. But the numbers don’t add up. What we are seeing is an ugly spectacle of ignorant people arguing over an empty bubble.