Highlights
- Trump claims a $500 billion mineral deal with Ukraine, but experts dispute the existence and accessibility of rare earth deposits.
- Much of Ukraine’s potential mineral wealth lies in Russian-occupied territories, making extraction extremely challenging.
- The complex process of rare earth mining and processing makes Ukraine an impractical source, with decades of development required.
The Trump administration’s push for a mineral deal with Ukraine, particularly focusing on rare earth elements, has left industry experts scratching their heads. While Trump has touted the agreement as a game-changing opportunity that could generate up to $500 billion in revenue, experts argue that Ukraine’s rare earth or critical mineral reserves are neither as abundant nor as accessible as the president claims. And this has been a point articulated at Rare Earth Exchanges since the onset of this discussion.
No credible evidence?
According to Business Insider (opens in a new tab), on March 25, Trump recently reaffirmed that a revenue-sharing agreement on Ukrainian critical minerals was in the works, citing the “finest rare earths” as a key attraction. However, Laura Lewis, a engineering professor at Northeastern University, expressed skepticism, saying, “I cannot find credible evidence of rare earth deposits in Ukraine. At all.” Erik Jonsson, a senior geologist at the Geological Survey of Sweden, echoed this sentiment, stating that while Ukraine does have a well-developed mining industry, it is not centered around rare earth elements. Rare earth elements are a subset of critical minerals vital to the defense, consumer electronics, and renewable energy industries. They include materials like neodymium, which is used in wind turbines and EV batteries, and erbium, which is essential for nuclear power and lasers. Despite Trump’s claims, the public evidence of significant, readily mineable rare earth deposits in Ukraine remains thin.
Minerals in newly Russian Provinces
Oilprice.com from March 26 highlights (opens in a new tab) further complications, pointing out that much of Ukraine’s mineral wealth, including rare earths, lies within Russian-occupied territories. Regions such as Luhansk and Donetsk, where these deposits are concentrated, have been under Russian control since 2022, making extraction nearly impossible without a drastic change in the conflict’s dynamics. Additionally, much of Ukraine’s rare earth data comes from outdated Soviet-era surveys that lack modern verification.
A fantasy?
Jack Lifton, executive chairman of the Critical Minerals Institute, dismissed the notion that Ukraine is a viable source for rare earths, calling it “a fantasy.” “If you want critical minerals, Ukraine ain’t the place to look for them,” Lifton told Oilprice.com. He further argued that the complex and costly process of rare earth extraction and refinement makes Ukraine an impractical choice, given that no processing infrastructure exists.
Despite these significant red flags, the deal appears to be moving forward. Trump has framed the agreement as a way to recoup U.S. military aid to Ukraine, which he estimated at $350 billion. This figure has been disputed, with the Kiel Institute for the World Economy placing total U.S. aid at $118 billion and the Department of Defense stating $183 billion, which includes costs for replenishing U.S. defense stockpiles. Regardless of the actual numbers, Trump sees Ukraine’s mineral wealth as a way to offset American expenses. The deal also includes other critical minerals like titanium and graphite, which Ukraine does have in significant quantities. According to Ukraine’s Economy Ministry, the country holds 22 of the 34 minerals classified as critical by the European Union, including titanium, zirconium, graphite, and lithium. However, rare earths remain a different challenge altogether.
Decades of effort needed
The fundamental issue is that mining rare earth elements is only the first step; processing them into usable materials is far more complex. The process involves extensive chemical treatments and sophisticated separation techniques, often requiring hundreds of processing tanks to extract individual elements. The U.S. itself has only one operating rare earths mine—Mountain Pass in California—and even that mine ships its concentrate to China for further processing. Developing a new rare earth mining and refining operation in Ukraine, a war-torn country with limited infrastructure for such advanced metallurgy would take decades.
Rare earths a side issue?
Beyond the technical and logistical challenges, the political aspects of the deal are also murky. While Ukraine’s President Volodymyr Zelensky initially seemed hesitant, he later signaled readiness to sign the agreement. However, concerns remain about what the U.S. is offering in return. The deal includes vague security assurances but no concrete military commitments. Meanwhile, Russia has pushed for sanctions relief in exchange for a ceasefire in Ukraine, leading some analysts to speculate that Trump’s minerals deal could be part of a larger geopolitical trade-off. As The Guardian recently noted, Trump’s administration appears willing to make political and military concessions to Russia, potentially allowing Moscow to emerge from its economic isolation. Suppose this deal is indeed part of broader negotiations. In that case, it raises questions about whether rare earths are truly the driving force behind the agreement or merely a convenient justification for a larger diplomatic maneuver.
Is Feasibility the issue?
In the end, while Ukraine possesses significant mineral wealth, the feasibility of mining rare earths at the scale Trump envisions appears highly questionable, as discussed at Rare Earth Exchanges. With much of these resources in contested regions and no established infrastructure for processing, experts remain unconvinced that Ukraine can become a significant rare earths supplier anytime soon. The reality of rare earth mining is far more complex than the rhetoric surrounding this deal, leaving many to wonder if there is another unstated agenda at play.
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