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Are these minerals even economically viable?
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.”
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A conversation with Mary King, a vice president handling venture strategy at Aligned Capital
Today’s conversation is with Mary King, a vice president handling venture strategy at Aligned Capital, which has invested in developers like Summit Ridge and Brightnight. I reached out to Mary as a part of the broader range of conversations I’ve had with industry professionals since it has become clear Republicans in Congress will be taking a chainsaw to the Inflation Reduction Act. I wanted to ask her about investment philosophies in this trying time and how the landscape for putting capital into renewable energy has shifted. But Mary’s quite open with her view: these technologies aren’t going anywhere.
The following conversation has been lightly edited and abridged for clarity.
How do you approach working in this field given all the macro uncertainties?
It’s a really fair question. One, macro uncertainties aside, when you look at the levelized cost of energy report Lazard releases it is clear that there are forms of clean energy that are by far the cheapest to deploy. There are all kinds of reasons to do decarbonizing projects that aren’t clean energy generation: storage, resiliency, energy efficiency – this is massively cost saving. Like, a lot of the methane industry [exists] because there’s value in not leaking methane. There’s all sorts of stuff you can do that you don’t need policy incentives for.
That said, the policy questions are unavoidable. You can’t really ignore them and I don’t want to say they don’t matter to the industry – they do. It’s just, my belief in this being an investable asset class and incredibly important from a humanity perspective is unwavering. That’s the perspective I’ve been taking. This maybe isn’t going to be the most fun market, investing in decarbonizing things, but the sense of purpose and the belief in the underlying drivers of the industry outweigh that.
With respect to clean energy development, and the investment class working in development, how have things changed since January and the introduction of these bills that would pare back the IRA?
Both investors and companies are worried. There’s a lot more political and policy engagement. We’re seeing a lot of firms and organizations getting involved. I think companies are really trying to find ways to structure around the incentives. Companies and developers, I think everybody is trying to – for lack of a better term – future-proof themselves against the worst eventuality.
One of the things I’ve been personally thinking about is that the way developers generally make money is, you have a financier that’s going to buy a project from them, and the financier is going to have a certain investment rate of return, or IRR. So ITC [investment tax credit] or no ITC, that IRR is going to be the same. And the developer captures the difference.
My guess – and I’m not incredibly confident yet – but I think the industry just focuses on being less ITC dependent. Finding the projects that are juicier regardless of the ITC.
The other thing is that as drafts come out for what we’re expecting to see, it’s gone from bad to terrible to a little bit better. We’ll see what else happens as we see other iterations.
How are you evaluating companies and projects differently today, compared to how you were maybe before it was clear the IRA would be targeted?
Let’s say that we’re looking at a project developer and they have a series of projects. Right now we’re thinking about a few things. First, what assets are these? It’s not all ITC and PTC. A lot of it is other credits. Going through and asking, how at risk are these credits? And then, once we know how at risk those credits are we apply it at a project level.
This also raises a question of whether you’re going to be able to find as many projects. Is there going to be as much demand if you’re not able to get to an IRR? Is the industry going to pay that?
What gives you optimism in this moment?
I’ll just look at the levelized cost of energy and looking at the unsubsidized tables say these are the projects that make sense and will still get built. Utility-scale solar? Really attractive. Some of these next-gen geothermal projects, I think those are going to be cost effective.
The other thing is that the cost of battery storage is just declining so rapidly and it’s continuing to decline. We are as a country expected to compare the current price of these technologies in perpetuity to the current price of oil and gas, which is challenging and where the technologies have not changed materially. So we’re not going to see the cost decline we’re going to see in renewables.
And more news around renewable energy conflicts.
1. Nantucket County, Massachusetts – The SouthCoast offshore wind project will be forced to abandon its existing power purchase agreements with Massachusetts and Rhode Island if the Trump administration’s wind permitting freeze continues, according to court filings submitted last week.
2. Tippacanoe County, Indiana – This county has now passed a full solar moratorium but is looking at grandfathering one large utility-scale project: RWE and Geenex’s Rainbow Trout solar farm.
3. Columbia County, Wisconsin – An Alliant wind farm named after this county is facing its own pushback as the developer begins the state permitting process and is seeking community buy-in through public info hearings.
4. Washington County, Arkansas – It turns out even mere exploration for a wind project out in this stretch of northwest Arkansas can get you in trouble with locals.
5. Wagoner County, Oklahoma – A large NextEra solar project has been blocked by county officials despite support from some Republican politicians in the Sooner state.
6. Skagit County, Washington – If you’re looking for a ray of developer sunshine on a cloudy day, look no further than this Washington State county that’s bucking opposition to a BESS facility.
7. Orange County, California – A progressive Democratic congressman is now opposing a large battery storage project in his district and talking about battery fire risks, the latest sign of a populist revolt in California against BESS facilities.
Permitting delays and missed deadlines are bedeviling solar developers and activist groups alike. What’s going on?
It’s no longer possible to say the Trump administration is moving solar projects along as one of the nation’s largest solar farms is being quietly delayed and even observers fighting the project aren’t sure why.
Months ago, it looked like Trump was going to start greenlighting large-scale solar with an emphasis out West. Agency spokespeople told me Trump’s 60-day pause on permitting solar projects had been lifted and then the Bureau of Land Management formally approved its first utility-scale project under this administration, Leeward Renewable Energy’s Elisabeth solar project in Arizona, and BLM also unveiled other solar projects it “reasonably” expected would be developed in the area surrounding Elisabeth.
But the biggest indicator of Trump’s thinking on solar out west was Esmeralda 7, a compilation of solar project proposals in western Nevada from NextEra, Invenergy, Arevia, ConnectGen, and other developers that would, if constructed, produce at least 6 gigawatts of power. My colleague Matthew Zeitlin was first to report that BLM officials updated the timetable for fully permitting the expansive project to say it would complete its environmental review by late April and be completely finished with the federal bureaucratic process by mid-July. BLM told Matthew that the final environmental impact statement – the official study completing the environmental review – would be published “in the coming days or week or so.”
More than two months later, it’s crickets from BLM on Esmeralda 7. BLM never released the study that its website as of today still says should’ve come out in late April. I asked BLM for comment on this and a spokesperson simply told me the agency “does not have any updates to share on this project at this time.”
This state of quiet stasis is not unique to Esmeralda; for example, Leeward has yet to receive a final environmental impact statement for its 700 mega-watt Copper Rays solar project in Nevada’s Pahrump Valley that BLM records state was to be published in early May. Earlier this month, BLM updated the project timeline for another Nevada solar project – EDF’s Bonanza – to say it would come out imminently, too, but nothing’s been released.
Delays happen in the federal government and timelines aren’t always met. But on its face, it is hard for stakeholders I speak with out in Nevada to take these months-long stutters as simply good faith bureaucratic hold-ups. And it’s even making work fighting solar for activists out in the desert much more confusing.
For Shaaron Netherton, executive director of the conservation group Friends of the Nevada Wilderness, these solar project permitting delays mean an uncertain future. Friends of the Nevada Wilderness is a volunteer group of ecology protection activists that is opposing Esmeralda 7 and filed its first lawsuit against Greenlink West, a transmission project that will connect the massive solar constellation to the energy grid. Netherton told me her group may sue against the approval of Esmeralda 7… but that the next phase of their battle against the project is a hazy unknown.
“It’s just kind of a black hole,” she told me of the Esmeralda 7 permitting process. “We will litigate Esmeralda 7 if we have to, and we were hoping that with this administration there would be a little bit of a pause. There may be. That’s still up in the air.”
I’d like to note that Netherton’s organization has different reasons for opposition than I normally write about in The Fight. Instead of concerns about property values or conspiracies about battery fires, her organization and a multitude of other desert ecosystem advocates are trying to avoid a future where large industries of any type harm or damage one of the nation’s most biodiverse and undeveloped areas.
This concern for nature has historically motivated environmental activism. But it’s also precisely the sort of advocacy that Trump officials have opposed tooth-and-nail, dating back to the president’s previous term, when advocates successfully opposed his rewrite of Endangered Species Act regulations. This reason – a motivation to hippie-punch, so to speak – is a reason why I hardly expect species protection to be enough of a concern to stop solar projects in their tracks under Trump, at least for now. There’s also the whole “energy dominance” thing, though Trump has been wishy-washy on adhering to that goal.
Patrick Donnelly, great basin director at the Center for Biological Diversity, agrees that this is a period of confusion but not necessarily an end to solar permitting on BLM land.
“[Solar] is moving a lot slower than it was six months ago, when it was coming at a breakneck pace,” said Patrick Donnelly of the Center for Biological Diversity. “How much of that is ideological versus 15-20% of the agencies taking early retirement and utter chaos inside the agencies? I’m not sure. But my feeling is it’s less ideological. I really don’t think Trump’s going to just start saying no to these energy projects.”