President Donald Trump is close to reaching an agreement with Ukraine that would give the United States preferential access to the country’s massive raw material riches. However, the true value of these assets is unknown because estimates are based on out-of-date Soviet-era studies that did not account for the feasibility and cost of producing these resources.
According to the Ukraine newspaper
According to the most recent draft of the agreement, which was published in the Ukrainian newspaper Economic Pravda, Ukraine will allocate 50% of its state-owned natural resource revenues to a fund dedicated to investing in Ukraine. Notably, no security guarantees from the United States are included in this contract. On paper, the United States appears to stand to benefit significantly from this pact, given that Ukraine’s natural resources and environment ministry claims the country’s bedrock holds almost 5% of the world’s vital raw materials.
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These minerals, which include graphite, lithium, titanium, beryllium, and uranium, are critical for the development of batteries, radar systems, and armour that are required by the defence and technology industries. Securing access to these resources may help America minimise its reliance on Chinese minerals. However, the true size of Ukraine’s mineral riches remains unknown, with only approximately 8,000 of the country’s 20,000 studied mineral resources and sites deemed feasible.
The development of these resources is further complicated by the requirement for massive expenditure, which is projected to be $15 billion for the top ten identified mining opportunities. This involves the construction of mines, quarries, and processing plants. Furthermore, the extraction procedure is projected to be costly and time-consuming, with the Ukrainian Geological Survey projecting that exploiting the Novopoltasvke deposit, one of the world’s largest rare earth deposits, will require a $300 million investment.
China now controls the rare earth supply chain
China now controls the rare earth supply chain, processing almost 90% of the world’s rare earths. The United States and other major producers lack the requisite infrastructure and knowledge to process these minerals, so they must rely on Beijing. Developing this infrastructure in Ukraine would take years and would probably be less efficient than exporting the materials to China for processing.
According to Ukrainian Deputy Prime Minister Yulia Svyrydenko
The deal is further complicated by the fact that some promising mineral opportunities are located in Russian-occupied regions. According to Ukrainian Deputy Prime Minister Yulia Svyrydenko, Russia has taken control of Ukraine’s crucial mineral and gas reserves worth $350 billion. Trump must now decide whether to increase assistance for Ukraine and assist the country in reclaiming its occupied regions, or to seek an alternative agreement with Russia. According to S&P Global, the technological constraints and expenses associated with extracting Ukraine’s rare earth elements may make it unprofitable.
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