Donald Trump is increasing pressure on the Ukrainian president to give up to 50% of its mineral reserves.
Reports suggest that during a meeting at Trump Tower in September, Ukrainian President Volodymyr Zelenskyy proposed a US stake in Ukrainian minerals in exchange for more weapons amid concerns that Trump would cut aid if elected.
However, tensions between the US and Ukraine have escalated since Trump’s return to the White House, with Trump calling Zelenskyy a “dictator” and excluding Ukraine from negotiations with Russia.
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Sources in Ukraine told Sky News that Zelenskyy is hesitant to agree to the US deal due to various issues, with a leaked draft requesting 50%. French President Emmanuel Macron has expressed support for this proposal.
Let’s explore Ukraine’s mineral resources and the reasons for the US’s interest in them.
Donald Trump meets Volodymyr Zelenskyy at Trump Tower in September 2024. Pic: AP
What minerals does Ukraine possess?
Prior to Russia’s invasion in February 2022, minerals accounted for 6.1% of Ukraine’s GDP and 30% of its exports.
Ukraine is rich in various ‘critical’ minerals used in technology manufacturing, defense systems, and green energy, such as copper, nickel, lithium, and titanium.
In 2019, Ukraine supplied 7% of global titanium, crucial for constructing nuclear power plants and aircraft, according to the European Commission.
It is also believed to have a significant amount of lithium (used in batteries) compared to other European countries, approximately 500,000 tonnes.
Before the invasion, Ukraine was a major global source of graphite, vital for nuclear power stations and electric vehicle batteries.
Additionally, Ukraine has abundant reserves of coal, iron ore, and manganese.
A titanium plant in Armyansk, Crimea. File pic: Reuters
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Due to territories occupied by Russia (such as Donbas and neighboring regions), current data on Ukrainian metallic minerals is uncertain. Before the invasion, up to 40% of these minerals were under Russian control.
For instance, two of Ukraine’s lithium deposits, Zaporizhzhia and Donetsk, are now in Russian hands.
A graphite pit in Zavallia, Ukraine. Pic: Reuters
Rare earth elements
Rare earth elements (REE) are a group of 17 unique minerals essential for the production of devices like smartphones, electric vehicles, wind turbines, and weapons systems.
REEs include materials like europium for nuclear power plant control rods, and gadolinium used in mobile phone magnets, along with holmium, ytterbium, and dysprosium.
While not actually rare, their extraction and storage require significant energy inputs.
Due to the situation in Ukraine, it’s uncertain which REEs are present and in what quantities.
A pre-war study identified three critical mineral deposits containing REEs in Ukraine by the Kyiv School of Economics.
Reports from Ukrainian mineral data mentioned the presence of cerium, neodymium, erbium, yttrium, and lanthanum.
Why is Trump interested in them?
Trump has not provided specific details on which minerals he seeks from Ukraine.
As Sky’s economics and data editor Ed Conway noted, there are ample lithium, graphite, and titanium reserves elsewhere, including in the US.
However, China’s role is a significant factor in Trump’s demands.
Being the largest global manufacturer, China dominates the processing of REEs, supplying between 50% and 75% of the world’s REEs.
As a result, the US and Europe aim to reduce their reliance on China.
A Chinese rare earth smelting plant releasing polluted water
In December, prior to Trump’s return, China banned the export of certain REEs to the US. Under the Biden administration, China had already restricted its mineral exports to the US.
In response on February 1, the Trump administration imposed 10% tariffs on all Chinese imports.
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Why did China restrict mineral exports last year?
Aside from the trade conflict with China, REEs and critical minerals are vital for the global shift towards green energy.
Scaling to meet net-zero goals by 2030 will require triple the current amounts of copper, lithium, nickel, and cobalt, according to the World Meteorological Organization.
This translates to the need for 50 more lithium, 60 nickel, and 17 cobalt mines worldwide.