Rare Earth Exchanges

Ukraine’s Rare Earth Deal with Trump – Is this A Political Mirage More Than a Market Reality?

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Highlights

  • Ukraine offers rare earth minerals to the U.S. in exchange for a security partnership, but actual mineral extraction capabilities are limited.
  • Over 50% of Ukraine’s critical mineral deposits are under Russian control, complicating potential resource agreements.
  • The proposed deal appears more like political posturing than a viable strategic mineral exchange, with significant infrastructure and refining challenges.

Connor Stringer of The Telegraph (opens in a new tab) reports that Ukraine is poised to exchange its rare earth minerals for a U.S.-backed “security shield” in a deal brokered by the Trump administration. The agreement, framed as a post-war economic partnership, is intended to provide Ukraine with long-term protection in exchange for access to its critical mineral resources.

Trump’s team, spearheaded by Transport Secretary Scott Bessent (opens in a new tab), has positioned this mineral-for-security pact as part of a broader peace strategy, leveraging Ukraine’s resource wealth to secure continued U.S. support.

But let’s cut through the marketing fluff—because there is certainly some of that here. The reality is that Ukraine’s so-called “vast rare earth deposits” are more a myth than a market-moving force. Unlike China, which dominates over 85% of the global rare earth supply with extensive refining capacity, Ukraine’s rare earth sector is minimal in terms of commercial-scale production. While the country indeed holds deposits of certain critical minerals—like titanium and lithium—true rare earth deposits, let alone extraction, are limited.

More importantly, at least half of Ukraine’s identified critical mineral deposits are under Russian control, particularly in the occupied Donbas and Crimea regions. This means that any deal promising rare earths as collateral for security guarantees is already built on shaky ground.

Moreover, Trump’s demand for $500 billion worth of rare earth minerals could be a stretch. Ukraine’s total mineral wealth, including rare earths, lithium, and titanium, has been estimated in the hundreds of billions—but that figure reflects theoretical reserves, not actual extractable or processed materials. Without advanced refining infrastructure or established global supply chains, Ukraine lacks the means to translate its underground wealth into usable commodities.

Yes, we don’t imply that Ukraine has no geological assets.  While the rare earths are scarce (although the U.S. government keeps referring to them, the nation, as reported by Reuters, (opens in a new tab) has deposits of 22 of the 34 minerals identified by the European Union as critical. They include industrial and construction materials, ferroalloy, precious and non-ferrous metals, and some rare earth elements.

Meanwhile, China maintains a stranglehold on global rare earth refining, making it practically impossible for Ukraine to serve as an immediate alternative source for the U.S.

So, this “deal” is ultimately more political posturing, perhaps at its finest, like only Trump can pull off—a rhetorical exercise aimed at justifying a new security arrangement while dangling resources that are largely inaccessible.  Well, the 50%+ of the critical minerals on the Ukraine (non-Russia) side may be exploited at some point.  But again, at least half of the critical minerals are controlled by the Russians. 

Ukraine’s need for Western security guarantees is real, but the rare earth angle could be deemed a misleading distraction. The U.S. would be far better served to focus on domestic rare earth processing capacity, securing refining deals with allied nations like Australia and Canada, and investing in recycling technologies rather than banking on a war-torn country with limited extraction capabilities. In the end, Ukraine’s mineral wealth has long-term potential, not an immediate solution—and any serious strategist knows that.

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