Highlights
- Ukraine reportedly offers $1 trillion worth of rare earth elements to the U.S. in exchange for support against Russia.
- The U.S. aims to diversify its rare earth element (REE) supply, identifying Ukraine as a potential source despite ongoing war and environmental challenges.
- Ukraine’s REE deposits are not fully developed but are recognized by geological surveys and the World Economic Forum as strategically significant.
Will the United States help itself to Ukrainian rare earth element (REE) reserves in exchange for the billion worth of support against Russia? According to recent accounts this is the case, in fact Vladmir Zelensky (opens in a new tab), the President of Ukraine, is ready to offer them up. This exchange was reported based on a meeting last month involving the U.S. Senators Richard Blumenthal and Lindsey Graham who visited Kiev, Ukraine in August of this year.
According to a joint statement from the two senators:
“President Zelensky is pleased and ready to reach a strategic agreement with the United States regarding rare earth metals, worth more than a trillion dollars owned by Ukraine, and has committed himself to creating a working group with the United States.”
Few media outlets picked up on this important statement, but EurAsia Daily (opens in a new tab) as well as Interfax (opens in a new tab) was one of them. The offices of the senators verified the trip (opens in a new tab) in August of this year.
So, what’s behind this?
The United States certainly has shown interest in diversifying its supply of REEs and Ukraine has been identified as a potential source for these critical minerals. While Ukraine is not traditionally known as a major producer of rare earth elements, it has untapped deposits of various minerals, including rare earths, which are gaining attention due to the global demand for these resources.
Ukraine’s Rare Earth Potential?
From a geology perspective Ukraine possesses significant deposits of various minerals, including rare earth elements, though large-scale mining and production of REEs have not been a major industry in the country so far.
Of course this remains a highly contested, yet strategic location: Ukraine’s proximity to Europe and its integration with Western countries make it an attractive partner for the U.S. and Europe in diversifying supply chains.
Before the war started, according to some media (opens in a new tab), Ukraine was planning to exploit its REE reserves, monetizing them for great wealth accumulation and strategic position.
U.S. Interests and Collaboration
Of course, the U.S. continues to support the Ukraine government after Russia’s massive invasion into the country. Apologists for Vladimir Putin in the U.S. gripe online in podcasts that NATO promised never to expand to Russia’s border. But times change. Russia itself wanted in on NATO!
The U.S. has been increasingly engaging with countries that have potential REE deposits as part of a broader strategy to secure alternative sources of these elements. Ukraine could be a potential partner due to its resource base and geopolitical alignment with the West since Russia's invasion in 2022.
The U.S. and European nations have provided Ukraine with various forms of aid and investment, and while rare earths haven’t been a primary focus of these agreements, discussions about developing Ukraine’s critical mineral sector, including rare earth elements, have emerged. And this announcement by the U.S. senators while visiting Kiev, $1 trillion worth of REEs, remains significant.
But challenges abound from the war ongoing with Russia which makes the region overall quite dangerous. Plus, environmental concerns persist, and with no top-down Communist-style party to ramrod a long-term agenda, including transcending environmental policies for strategic long-term gain, the moves in Europe to enable such a hub are quite more complicated, undoubtedly leading to long-term efforts.
What kinds of deposits does Ukraine have?
Ukraine has identified deposits of REEs though its rare earth sector is not yet well-developed compared to major producers like China. Ukraine is rich in a variety of minerals, including those critical to modern technology and defense industries, and rare earth elements are among these resources.
According to geological surveys the country has been identified as having deposits of rare earth elements, particularly in regions with significant mineral wealth, such as the Azov region (southeastern Ukraine) and parts of western Ukraine. The country has been known for its rich reserves of other strategic minerals like titanium, zirconium, and uranium, which often occur in conjunction with rare earths.
While detailed data on Ukraine's rare earth deposits is not as widely publicized as for other countries, reports indicate that it has significant reserves of various REEs, such as cerium, lanthanum, and neodymium—key elements used in electronics, renewable energy technologies, and defense applications.
Interestingly the World Economic Forum has identified Ukraine as a major center for REE exploitation. In a white paper titled “The Future of Critical Rare Materials: How Ukraine Plays a Strategic Role in Global Supply Chains (opens in a new tab)” published just in July 2024 identifies Ukraine as a REE treasure trove stating: “Ukraine holds immense potential as a major global supplier of critical raw materials essential for industries such as defense, high-tech, aerospace and green energy.
The need for such a resilient supply chain grows given the ongoing Russian war and growing geopolitical tension with China as a starter. Was WEF banking on growth of demand given their projection of the ongoing transition to a green economy?
Daniel
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