The US and Ukraine have reached a preliminary agreement for Kiev to deliver part of the exploitation of its minerals to Washington. It is the culmination of two months of negotiations that almost failed on February 28, after the disastrous appearance of the US President, Donald Trump, and his Ukrainian counterpart, Volodymyr Zelenskiy, in the Oval Office. The pact has been virtually signed by the US Treasury Secretary, Scott Bessent, in Washington, and the Deputy Prime Minister and Minister of Economy of Ukraine, Yulia Svyrydenko, in Kiev. Both parties expect to finalize the definitive text next week.
Still nothing is known about the details. The previous agreement, which derailed on that fateful day in February, established a common fund for the exploitation of Ukrainian wealth that would be shared 50/50 by each country. Revenues would be used for the reconstruction of Ukraine, but only after the US had received its share. The text did not include any clauses for the protection of Ukraine's sovereignty or integrity.
The most paradoxical thing is that nobody knows if these riches exist. The US President even said he wants Zelenski to deliver rare earths - the name given to 17 elements of the periodic table - worth half a trillion dollars ($440 billion euros). It is nonsense because Trump has asked for something impossible. And Ukraine, cleverly, is willing to deliver it if they were to find it.
"At this moment, nobody knows if Ukraine has rare earths in sufficient quantity. There are reserves of oil, gas, lithium, and graphite, although they are not among the largest in the world," explains Tyson Barker, who was the number two in the team for the reconstruction of Ukraine at the State Department and is now a researcher at the Atlantic Council think tank. According to Barker, the strongest argument in favor of the presence of these minerals in Ukraine "is as simple as it being a large country. The larger the territory, the more possibilities there are." But that does not mean they have the purity or are in the appropriate geological formation to make their extraction profitable.
The most reliable public source of information on mineral resources is the US Geological Survey (USGS), and that organization is categorical: there is no evidence that Ukraine has reserves (scientific confirmation of the presence of these minerals) nor, of course, deposits (reserves whose extraction is profitable).
As investor and mining executive Amanda Marzillano van Dyke wrote in the publication Mining.com, Trump's ideas are based "on old Soviet analyses indicating traces of rare earths and a line of analysis suggesting that the entire region could have them." Barker, from his experience in the government, confirms this thesis. "There are only reports from the 1980s by Soviet geologists," he explains. Ukrainian authorities themselves have acknowledged that some of the studies indicating the presence of rare earths in the country are over 60 years old, according to the Washington-based think tank Center for Strategic and International Studies (CSIS).
Trump's proposal to ask Ukraine for half a trillion dollars in rare earths - more like blackmail, given the power disparity - not only violates International Law - the 1969 Vienna Convention on the Law of Treaties - but also mathematics. Firstly, because if Ukraine does not have rare earths, it will hardly be able to deliver that amount. And secondly, because the global trade of this material is minimal. There are no unified figures, but data suggests that it only generated around $3 billion in 2023, slightly more than Taylor Swift's tour. It is easy to do a rough calculation to determine the real economic value - beyond speculations - of the rare earths economy. In 2023, around 350,000 tons of these metals were extracted worldwide. China produced 242,000 tons, 69% of the total. From that amount, it exported 52,307 tons, earning $488.8 million (around ¤429 million).
A ton of rare earths is worth a little over $10,000, while, for example, platinum is worth three times that. Therefore, half a trillion dollars in rare earths is equivalent to the entire global production for the next 167 years.
No company has shown interest in entering into the agreement between Trump and Zelenski to benefit from it. The Ukrainian government itself has not assessed the alleged reserves of lanthanum, cerium, neodymium, and yttrium it claims to have, and it has not specified whether their exploitation would be profitable. In any case, it is very likely that the companies that exploit the mineral will not be American. Because, as Tyson explains, "the US does not have large mining companies." The leaders are Australian, British, Swiss, and Brazilian. The participation of American entities as financial partners also does not seem clear. Wall Street prefers to invest in sectors like technology, where the possibilities of return are greater than in mining in a country at war.
Ukraine fares somewhat better in so-called strategic minerals, which is a more ambiguous concept created by industrialized countries to refer to raw materials essential for their economies to function. There, Ukraine has something to offer, although not much. Its most important reserves are graphite, of which Kiev claims to have 6% of the world's total, which is a fraction of what US allies like Turkey (30%), Brazil (20%), and Mozambique and Madagascar (8% each) have. Ukraine claims to have over 250,000 tons of lithium, which, like in the case of graphite, places it at the forefront in Europe. However, leaving aside the fact that these figures have not been verified, they are less than a quarter of the reserves of that mineral that the US has and do not even reach a tenth of those of countries like Australia, Chile, Argentina, and especially Bolivia.
The same goes for oil. As for natural gas, Ukraine does have potential, especially if exploited through fracking, a technology widely used in the US and prohibited in much of Europe. Ukraine has a lot of coal and iron ore. But these minerals are very abundant worldwide.
There is a problem that deals the final blow to Trump's fairy tale about Ukraine's minerals: the war. More than half of Ukraine's mineral reserves could be in territory occupied by Russia, which Trump wants to remain under Vladimir Putin's control. Added to this is the destruction of a large part of Ukraine's electrical infrastructure, which threatens to be a fatal blow to a sector with as much energy consumption as mining. Barker, however, is more optimistic there. "Ukraine has an enormous capacity for electricity generation, thanks to its nuclear power plants," he emphasizes.
And then there are two of Ukraine's major sins: bureaucracy and corruption. These two problems led the US oil giant Chevron to cancel its $10 billion investment in gas in Ukraine almost a decade ago. Now, President Zelenskiy has made considerable efforts to clean up the Ukrainian political and institutional system to make it more transparent and bring it closer to EU standards. His ability to manage foreign investment in mining - if it happens - will be the ultimate test to see if he has succeeded in his fight against corruption.