Estimates of Ukraine’s mineral wealth are based on outdated and incomplete assessments of difficult-to-access sites.
BRUSSELS — President Donald Trump, who prides himself on his negotiating skills, is on the brink of clinching a deal that would give the U.S. preferential access to Ukraine’s extensive raw material reserves.
But Trump might end up getting less than he bargained for. Estimates of Ukraine’s supposed mineral wealth are based on outdated Soviet-era surveys that didn’t take into account the viability or cost of developing them.
The latest draft of the agreement, cited by Ukrainian newspaper Economic Pravda, would see Kyiv pay 50 percent of revenues from its state-owned natural resources into a fund that would invest in Ukraine. There would be no U.S. security guarantees in return.
On paper, the U.S. stands to make a killing from the deal.
According to Ukraine’s natural resources and environment ministry, the country’s bedrock holds around 5 percent of the world’s “critical” raw materials — including graphite, lithium, titanium, beryllium and uranium.
The resources are essential to make batteries, radar systems and armor — key to the defense and tech industries — and would go some way to reducing America’s reliance on Chinese minerals.
In practice, the extent of Ukraine’s mineral patrimony is still largely a mystery.
Though the country reports more than 20,000 surveyed mineral deposits and sites, only around 8,000 of them have been assessed as viable. Of these, fewer than half were being exploited before Russia’s full-scale invasion of Ukraine three years ago.
Old school
Estimates of the value of these deposits are largely based on Soviet-era surveys mostly carried out between the 1960s and the 1980s. Information, often incomplete, is scattered across the country and is still being digitized. Much of it has been sealed since President Volodymyr Zelenskyy imposed martial law at the start of the war.
Even if further exploration confirmed the existence of valuable mineral deposits, extracting them would take a long time — and a lot of cash.
The Ukrainian Geological Survey (UGS) estimates the cost of exploiting Ukraine’s 10 largest known mining prospects at $15 billion — comprising the construction of mines, quarries and around 20 new processing facilities.
One of these prospects is the Novopoltasvke deposit — which the UGS describes as “one of the largest” rare earthsites in the world. Its development would require investment estimated at $300 million. A separate UGS report characterizes the site as “relatively difficult” due to the flooding and landslide risks.
The Novopoltavske deposit, first discovered in 1970, was explored in the 1980s — but no development work has been done there since 1991. It is one of Ukraine’s six known deposits of rare earth elements — a group of 17 minerals used to manufacture missiles, lasers, computers, TVs, smartphones and wind turbines.
Not so rare
While rare earths are actually not that rare, they are very costly to extract and process, as they are jumbled together with other minerals in varying concentrations.
China — which processes nearly 90 percent of rare earths worldwide — holds a “near monopoly” over this step in the supply chain, according to the Center for Strategic and International Studies. Most major rare earth producers, including the U.S., lack the domestic know-how or infrastructure needed to refine the minerals, forcing them to rely on Beijing.
Developing infrastructure to do so in Ukraine would, even with U.S. investment, take years and would likely be less efficient than shipping the minerals to China for processing.
Add to this investment the billions of dollars required to clear land of mines and explosives — which could take over a decade — and to rebuild essential infrastructure to sustain the mining sector, from roads to power plants.
In their latest assessment, the Ukrainian government, the World Bank and the European Commission estimate the cost of Ukraine’s reconstruction at$524 billion over the next 10 years — roughly the amount that Trump has demanded in compensation for Washington’s support for Kyiv in resisting Moscow’s war of aggression. The real level of aid from the U.S. since the start of the war is closer to $120 billion.
Due to the technical challenges and the costs involved, “Ukraine’s deposits of rare earth elements might not be profitable to extract,” concludes S&P Global, a market intelligence company.
Out of reach
There is another obstacle standing between Trump and Ukraine’s mineral riches: Several promising prospects are located in territories under Russian occupation.
Two of the largest known rare-earth prospects — the Azovske and Mazurivske deposits — are in the Russian-held Donetsk region. And the Novopoltavske site is in Zaporizhzhia, which is under Russian threat.
Some promising lithium fields at varying stages of development — the Shevchenkivske field in the Donetsk region and the Kruta Balka block in the Zaporizhzhia region — are also on the front lines.
Ukrainian Deputy Prime Minister Yulia Svyrydenko, chief negotiator for the mineral agreement, said Russia had occupied $350 billion worth of the country’s critical mineral and gas reserves. Other estimates place the value of lost resources in the trillions of dollars.
Trump could choose to ramp up support for Ukraine and help it win back occupied lands — or take up Vladimir Putin’s offer to buy minerals from Russia, including those extracted in occupied Ukrainian territories.
For the U.S. president, this could turn out to be the deal of the century — or could leave him with a bunch of loss-making mines no American company will ever want to invest in.
