Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Economy

The Big Question Hanging over Trump’s Minerals Deal with Ukraine

Are these minerals even economically viable?

Digging in Ukraine.
Heatmap Illustration/Getty Images

President Donald Trump is going to be talking rocks with his Ukrainian counterpart Volodymyr Zelenskyy during their Friday meeting in Washington, D.C., where they will sign a “very big agreement,” Trump said Wednesday.

As the Trump administration has ramped up talks to end the war in Ukraine, shift America’s strategic priorities away from Europe, and build a new relationship with Russia, it has also become intensely interested in Ukraine’s supposed mineral wealth, with Ukrainian and American negotiators working on a deal to create an investment fund for the country’s reconstruction that would be partially funded by developing the country’s mineral resources.

But exactly what minerals are in Ukraine and if they’re economically viable to extract is a matter of contention.

So-called critical minerals and rare earths have a way of finding themselves in geopolitical hotspots. This is because they’re not particularly rare, but the immense capital required to cost effectively find them, mine them, and process them is.

“A lot of countries have natural resources. We don’t mine everything that exists underground. We look for projects that are economically competitive,” Gracelin Baskaran, director of the critical minerals security program at the Center for Strategic and International Studies, told me.

Baskaran pointed out, it was precisely Russia’s full-scale invasion of Ukraine that kicked the United States’ interest in building up supplies of critical minerals and rare earths outside of China — which dominates the industry — into overdrive.

“It was a fortuitous moment in that way for Ukraine’s resources, because they weren’t necessarily being mined before,” she said.

And Ukraine has done its best to promote and take advantage of its mineral resources, even if there’s some ambiguity about what exactly they are, and if they can be profitably extracted at scale.

While often conflated, critical minerals and rare earths are distinct. The so-called “rare earths” are 17 similar elements, which the U.S. Geological Survey explicitly says are “relatively abundant,” like scandium and yttrium. Critical minerals are a more amorphous group, with the USGS listing out 50 (including the rare earths) as well as commonly known minerals like titanium, nickel, lithium, tin, and graphite, with uses in batteries, alloys, semiconductors, and other high value energy, defense, and technology applications.

When countries are desperate for outside assistance or their patrons are desperate to see some return on their “investments” in military and foreign aid, as Bloomberg’s Javier Blas has pointed out, the minerals tend to show up — just look at the “$1 trillion in untapped mineral deposits” the United States identified in Afghanistan in 2010. Ten years later when the USGS looked at Afghanistan’s mineral industries, the rare earths remained untapped and instead the country was largely exporting talc and crushed marble to its neighbors.

Ukrainians have been eager to show there are economically viable and valuable minerals in the country, including a claim by one Ukrainian official in early 2022 that “about 5% of all the world’s ‘critical raw materials’ are located in Ukraine,” while a pair of Ukrainian researchers claimed there was 500,000 tons of unmined lithium oxide resources. More recently the country has claimed to have rare earths, and that President Trump has taken a special interest in.

Many industry experts doubt there’s any significant reserves of rare earths in the country, with the exception of scandium, which is used in aluminum alloys and fuel cells. Ukraine does have a significant mining industry and has produced substantial amounts of iron ore and manganese, along with reserves of graphite, titanium, cobalt, and uranium, many of which are those so-called “critical minerals” with uses for energy and defense.

“There do not appear to be hardly any economically viable rare earths in the country – that was largely a misuse of a term someone heard,” Morgan Bazillian, director of the Payne Institute and a public policy professor at the Colorado School of Mines, told me in an email.

Blas has documented a game of telephone whereby rare earths and critical minerals are conflated to make it seem like the former exists in abundance underneath Ukraine. Despite the doubts, President Trump said on Wednesday during his cabinet meeting “we’ll be really partnering with Ukraine, [in] terms of rare earth. We very much need rare earth. They have great rare earth.”

While there’s disagreement about exactly what Ukraine has to offer in terms of minerals, the interest in building up supplies of minerals is part and parcel of what is now a bipartisan priority to build up supplies and the ability to process and refine minerals used for a variety of defense, industrial, and energy applications.

To the extent the United States is able to jumpstart any new mineral operations in postwar Ukraine, it would require first repairing the country’s greatly damaged infrastructure, which has been wrecked by the very conflict that has spiked interest in the country’s mineral sector.

“Their infrastructure is decimated. Rebuilding it will be the priority, getting industry moving again will take time – including from basic services like electricity,” Bazillian told me.

And after that, much basic work needs to be done before any mining can happen, like an updated geological survey of the country, which hasn’t been done since the country was part of the Soviet Union. And all that’s before starting the process for opening a mine, something that on average takes 18 years to do.

“You need to have a geological mapping. You need to identify investors who want to go in. You need to build infrastructure,” Baskaran said.

“Ukraine has undeveloped or untapped potential that could be utilized. And the question is whether that untapped potential is economically viable, and we don’t know yet.”

Yellow

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Sparks

Major Renewables Nonprofit Cuts a Third of Staff After Trump Slashes Funding

The lost federal grants represent about half the organization’s budget.

The DOE wrecking ball.
Heatmap Illustration/Getty Images

The Interstate Renewable Energy Council, a decades-old nonprofit that provides technical expertise to cities across the country building out renewable clean energy projects, issued a dramatic plea for private donations in order to stay afloat after it says federal funding was suddenly slashed by the Trump administration.

IREC’s executive director Chris Nichols said in an email to all of the organization’s supporters that it has “already been forced to lay off many of our high-performing staff members” after millions of federal dollars to three of its programs were eliminated in the Trump administration’s shutdown-related funding cuts last week. Nichols said the administration nixed the funding simply because the nonprofit’s corporation was registered in New York, and without regard for IREC’s work with countless cities and towns in Republican-led states. (Look no further than this map of local governments who receive the program’s zero-cost solar siting policy assistance to see just how politically diverse the recipients are.)

Keep reading...Show less
Yellow
Climate Tech

Trump Just Torpedoed Investors’ Big Bets on Decarbonizing Shipping

The delayed vote on a net-zero standard for the International Maritime Organization throws some of the industry’s grandest plans into chaos.

An hourglass and a boat.
Heatmap Illustration/Getty Images

Today, members of the International Maritime Organization decided to postpone a major vote on the world’s first truly global carbon pricing scheme. The yearlong delay came in response to a pressure campaign led by the U.S.

The Net-Zero Framework — initially approved in April by an overwhelming margin and long expected to be formally adopted today — would establish a legally binding requirement for the shipping industry to cut its emissions intensity, with interim steps leading to net zero by 2050.

Keep reading...Show less
Blue
Spotlight

How a Giant Solar Farm Flopped in Rural Texas

Amarillo-area residents successfully beat back a $600 million project from Xcel Energy that would have provided useful tax revenue.

Texas and solar panels.
Heatmap Illustration/Getty Images

Power giant Xcel Energy just suffered a major public relations flap in the Texas Panhandle, scrubbing plans for a solar project amidst harsh backlash from local residents.

On Friday, Xcel Energy withdrew plans to build a $600 million solar project right outside of Rolling Hills, a small, relatively isolated residential neighborhood just north of the city of Amarillo, Texas. The project was part of several solar farms it had proposed to the Texas Public Utilities Commission to meet the load growth created by the state’s AI data center boom. As we’ve covered in The Fight, Texas should’ve been an easier place to do this, and there were few if any legal obstacles standing in the way of the project, dubbed Oneida 2. It was sited on private lands, and Texas counties lack the sort of authority to veto projects you’re used to seeing in, say, Ohio or California.

Keep reading...Show less
Yellow