By Ben Aris, Intellinews, 2/24/25
Note: this article is from 2/24/25 and obviously much has happened since then and the deal between Ukraine and the US is apparently dead, but this is useful information to know. – Natylie
Lots of action over the weekend as US President Donald Trump doubled down on his $500bn “rare earth metals” deal with Ukraine, sending a revised agreement after Ukrainian President Volodymyr Zelenskiy complained the first one was too harsh. Trump made the new offer even harsher.
Unsurprisingly, Zelenskiy rejected this one too, but he has stopped being polite about it. At a press conference he said that Ukraine was being asked to pay a $50bn surcharge on every $100bn it earned from mining minerals and that it might produce, and if that was the case on any aid it would open a Pandora’s box. Moreover, he pointed out that the money the US gave him was in the form of grants, ie does not have to be paid back. It’s not debt, he said. Zelenskiy refuses to sign off on a deal that will mortgage “the next ten generations of Ukrainians.”
He is of course completely right. As bne IntelliNews reported, Trump is in effect asking Ukraine to pay reparations on a war where it is not the aggressor; it’s the victim. Russia should be the one paying, but instead it looks very much like it will be offered deals instead.
They are dancing in the corridors of the Kremlin. It was suggested Russia might be willing to give up its frozen $300bn as part of the bargain (if part of that money is spent on redeveloping the regions it annexed) and even more extraordinarily, Russian President Vladimir Putin ordered his government to prepare the way for Western companies to return to Russia. Boeing was singled out, which is desperate to buy Russian titanium again. Putin also said that Russia should start mining its own considerable deposits of lithium.
Zelenskiy was incautious in his rejection of Trump’s mineral deal. It’s becoming increasingly clear that Trump really doesn’t like Zelenskiy at all. Presumably he is still angry over the Hunter Biden investigation affair from his first term in office and Trump is such a child that he bears long and deep-seated grudges.
But he is still talking to Bankova because he wants basically all of Ukraine’s natural resources, especially its treasure trove of r”are earth metals.”
Except Ukraine doesn’t have any rare earth metals.
It does have metals and minerals. It is home to significant deposits of lithium, titanium and copper, for example. But these are not “rare earth” metals, but normal, “strategically important” metals.
Rare earth metals (REMs) are a group of 17 elements in the periodic table, including the 15 lanthanides, that sit in a row at the bottom of that block in the middle of the periodic table most people don’t know anything about, plus scandium and yttrium (in the third column). All have similar and useful, albeit esoteric, properties.
The strategically important metals on the other hand are scattered all over the period table and are only important as each one does something different, but very useful, but are not that abundant.
What happened here? Everyone is talking about the rare earth metals deal, but no one seems to have bothered to check their facts as the difference between something like lithium and says lanthanum is basic chemistry. Ok, I realise none of us paid that much attention in chemistry lessons in school, but still, journalists are supposed to check these things and even I registered that lithium, the sister of the far more common sodium (one half of table salt) is not a rare earth metal without having to look it up.
What is driving this is US Sinophobia, as China controls 80-95% of global supplies. At the same as we become a silicone-based economy these elements are increasingly important as they are needed to build super-fast chips etc. The fact that China holds all cards in rare earth production is a huge national security problem for the US which has said it wants to stay “at least one, if not two” generations ahead of everyone else in the tech race.
According to a congressional report issued a few years ago, the level of US rare earth metal production is currently “none.” I think everyone is aware of this problem, even if they are not sure how to pronounce yttrium, let alone praseodymium, so the idea that Ukraine is stuffed full of this stuff is appealing.
The confusion seems to have stemmed from a report by the “Nato Energy Security Centre of Excellence” that claimed Ukraine is home to a plethora of “rare earth minerals” that are worth “trillions of dollars.” It listed a string of these metals and minerals as an example in the report, except none of the elements it named were actually rare earth metals.
It turns out that the organisation, despite bearing Nato’s name, is an autonomous body based in Lithuania, which is home to some of Ukraine’s most ardent supporters.
This report seems to have had a big impact. I don’t know if Senator Lindsey Graham (another avid Ukraine supporter) read it or not, but he was parroting the findings of the report to Fox News last year and selling the idea that Ukraine has “trillions of dollars-worth” of rare earth metals – he specifically called them “rare earth metals.” Trump was sold on the idea, and no one bothered to check.
Until now. Bloomberg Opinion columnist Javier Blas wrote a piece at the end of last week calling bullshit on this story, pointing out that Ukraine doesn’t have any REMs.
I spent the weekend digging into the details and while Ukraine doesn’t have any REMs it does have valuable strategic metals of which lithium and graphite are probably the most important, but titanium and copper are the most valuable. Taken all together, based on the sketchy estimates of the size of the reserves, bne IntelliNews estimates the value of all these minerals and metals is around $775bn, which is a lot, but far short of the $2-$7 trillion that Graham was selling.
However, the huge hole in Trump’s deal is that Ukraine has not developed these resources. It has the fourth largest copper deposits in Europe that on paper are worth $340bn, but it has zero copper mines or production. Likewise, its titanium reserves are worth around $420bn, but last year it exported titanium slurry (it doesn’t have the technology to produce the far more valuable titanium sponge used to make planes) that earned a pathetic $11.6mn.
Taken all together, we estimate that Ukraine earned less than $100mn from the export of all its strategically important minerals in 2024. Almost all of these minerals and metals are still in the ground and untouched. What Ukraine exports is also the basic ingredients like raw uranium, not the valuable refined “yellow cake” version Russia makes that can be burned in a nuclear power plant (NPP).
The upshot is that Trump’s $500bn mineral deal is a pipedream. The problem is not that the US demanding to take 50% of all the revenues. The problem is where are the billions of dollars needed to build, more or less from scratch, all the mines and processing plants to realise the value of these raw materials going to come from? And these plants are huge, very expensive and take years to construct.
It seems Trump has been sold a dud deal as instead of taking cash out of Ukraine – based on last year’s figures he’d be entitled to only $50mn – he would be putting it in and for years, before he saw a penny returned on his investment. Once he realises this, he will drop the mineral deal like a hot brick.