Ukraine’s Rare Earth Gamble: Grand Promises, Dubious Reality

Highlights

• Ukraine’s rare earth deposits are based on Soviet-era assessments from the 1960s-1980s with no modern exploration or commercial validation.
• Key deposits like Novopoltavske require $300 million in investment and are located in challenging conditions, with some sites in Russian-occupied territory.
• Experts argue that Ukraine’s mineral claims are economically unfeasible, lacking proven reserves, advanced processing technology, and viable mining infrastructure during an ongoing war.

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Rare Earth Exchanges has suggested the Ukraine may be overplaying their rare earth elements and critical minerals hand. Ukraine’s pitch to trade rare earth resources for U.S. military aid is built on shaky ground—quite literally. As President Volodymyr Zelenskyy prepares to discuss the exchange with U.S. Vice President JD Vance, experts reveal that Ukraine’s rare earth deposits are based on outdated Soviet-era assessments from the 1960s-1980s, with little to no modern exploration or commercial validation reports S&P Global Commodity Insights.

The most significant deposit, Novopoltavske in Zaporizhzhia (opens in a new tab), was last evaluated by Soviet geologists in 1991 and requires $300 million in investment under “relatively difficult” conditions. Other known deposits, Azovske and Mazurivske, lie in Russian-occupied territory, making development near-impossible. The classification of geological data under Ukrainian state security laws further clouds transparency, though experts point out that Russia already possesses this information.

The economic feasibility is highly questionable. Rare earths are notoriously difficult to extract and process, requiring complex refining infrastructure dominated by China, with smaller capability via U.S., and Russia. Independent geologists like Tony Mariano (opens in a new tab) and Morgan Bazilian (opens in a new tab) argue that Ukraine’s deposits are likely uneconomical, drawing comparisons to the hyped but ultimately unviable mineral wealth of Afghanistan.

To summarize some key investor and geopolitical risks President Trump should be mindful of:

• Are there proven reserves? – Ukraine does not appear on the U.S. Geological Survey’s list of meaningful rare earth reserves, casting doubt on its claims.
• High-cost processing – Even if deposits exist, Ukraine lacks the advanced refining technology needed to separate and process rare earths at a commercial scale.
• War-Zone mining? – The country’s infrastructure is devastated, energy grids are unstable, and developing mines in an active war zone is implausible.
• Long development timelines – Even if proven viable, it would take a decade or more to build mines and refining facilities—far beyond the timeframe of immediate military aid discussions.
• Political and investor uncertainty – No major mining companies have expressed interest, and the U.S. government is unlikely to commit billions to a project without modern feasibility studies.

The takeaway—is this more a political bargaining chip than an industry breakthrough?

Ukraine’s rare earth offer appears more like a geopolitical move rather than a serious economic proposition. With no modern assessments, high extraction costs, and a war-torn economy, the notion that Ukraine could become a rare earth powerhouse in time to secure U.S. aid is unrealistic.

If the West seeks alternatives to Chinese-dominated rare earth supply chains, Ukraine is not the answer—at least not anytime soon.