Explainer
What are
Ukraine’s critical minerals – and why does Trump want them?
Volodymyr
Zelenskyy is likely to visit the US this week to sign a deal on Ukraine’s rare
earth minerals, according to Donald Trump
Damien Gayle
Wed 26 Feb
2025 02.20 CET
Volodymyr
Zelenskyy appears likely to visit the White House on Friday to sign a minerals
deal, Donald Trump has said, after Ukraine’s president rebuffed initial
attempts by the US to corner his country’s resources as a down payment for
continued military and economic aid to repel Russian forces.
The
announcement followed days of tense negotiations between the US and Ukraine in
which Zelenskyy alleged the US was pressuring him to sign a deal worth more
than $500bn that would force “10 generations” of Ukrainians to pay it back. He
also said it did not contain the security provisions Kyiv needed.
Details of
the deal remained unclear as of late Tuesday. Media reports said it was more
favourable to Ukraine than the original deal proposed by Washington, but did
not include references to long-term security guarantees that Kyiv wanted.
What are
critical minerals?
Critical
minerals are the metals and other raw materials needed for the production of
hi-tech products, particularly those associated with the green energy
transition, but also consumer electronics, artificial intelligence
infrastructure and weapons.
The rush to
tackle climate breakdown and move away from fossil fuels has triggered a rush
for energy transition minerals such as cobalt, copper, lithium and nickel,
which are useful for electrification of transport and the construction of wind
turbines. The same minerals and others are also used for the manufacture of
mobile phones, AI datacentres and arms such as F-35 fighter aircraft, placing
them in high demand.
As the
world’s economy and technology transforms, the value of critical minerals has
soared and geopolitical competition for access to them is rising. In 2023, the
International Energy Agency (IEA) estimated that the market for energy
transition minerals had reached £320bn in 2022, double its value five years
earlier. And if countries fully implement their clean energy and climate
pledges, demand is expected to more than double by 2030 and triple by 2040, the
agency says.
Which
minerals are regarded as critical?
The term
critical minerals is not a scientific term so much as a political term, and
different countries have different lists of critical minerals depending on
their domestic and geopolitical objectives.
In 2022, the
US Geological Survey (USGS) published a list of 50 minerals, from aluminium to
zirconium, that it regarded as “play[ing] a significant role in our national
security, economy, renewable energy development and infrastructure”. Notable
inclusions were arsenic, for semiconductors; beryllium, used as an alloying
agent in aerospace and defence industries; cobalt, lithium and graphite,
crucial for manufacturing batteries; indium, which makes screens respond to a
finger touch; and tellurium, which is used for solar power generation.
The US’s
Energy Act stipulates that the list must be updated every three years, which
means this year it will be up for review, and it will be interesting to see
which minerals appear or disappear given the new political environment in the
country.
What are
rare earth elements?
Rare earth
elements (REEs) are a subset of 17 critical minerals that are variously
indispensable for mobile phones, electric vehicles, missile guidance systems
and other electronics, industrial and energy applications.
Despite
their name, most of the rare earth elements are not particularly rare, but
their extraction and refining is fiendishly difficult – and environmentally
highly destructive – meaning production is concentrated in very few places,
mainly China.
REEs include
europium, used in nuclear power station control rods; dysprosium, gandolinium
and praseodymium, used in the magnets in your mobile phone; and gadolinium,
holmium and ytterbium, used in lasers among other things.
What
critical minerals does Ukraine have?
A 2022
article by the chair of Ukraine’s Association of Geologists, Hanna Liventseva,
claimed her country contained about 5% of the world’s mineral resources,
despite covering only 0.4% of the globe’s surface, thanks to a complex geology
that takes in all three of the main components of the earth’s crust.
According to
Ukraine’s own data, cited by Reuters, the country has deposits of 22 of the 34
minerals identified as critical by the EU, including rare earths such as
lanthanum, cerium, neodymium, erbium and yttrium.
Before the
outbreak of war with Russia, Ukraine was a key supplier of titanium, producing
about 7% of global output in 2019, according to European Commission research.
It also claimed 500,000 tons of lithium reserves, and one-fifth of the world’s
graphite, a crucial component of nuclear power stations.
However,
with Russia controlling about one-fifth of Ukraine’s territory, much of these
reserves have been lost. According to estimates by Ukrainian thinktanks cited
by Reuters, up to 40% of Ukraine’s metal resources are under occupation.
Russian troops also occupy at least two of Ukraine’s lithium deposits, one in
Donetsk and another in Zaporizhzhia.
Why does
Donald Trump want Ukraine’s critical minerals so much?
There is one
big reason Trump is so keen to get his hands on Ukraine’s critical minerals:
China. More than ever, the Asian superpower is the world’s factory and that
means, wherever in the world critical minerals are torn from the ground, it
remains a crucial staging point on the supply chain.
Most of the
world’s processing capacity for critical minerals is in China. According to the
IEA, China’s share of refining is about 35% for nickel, 50-70% for lithium and
cobalt, and nearly 90% for REEs. Its dominance in the latter, especially, is
overwhelming. According to USGS data, in 2024 China accounted for almost half
the world’s REE reserves.
With Trump
effectively instigating a trade war with China with his imposition of steep
tariffs on Chinese goods, US access to critical minerals is potentially under
threat. As mentioned earlier, the world is being gripped by an unseemly
scramble for mineral wealth. They are the building blocks of the economy of the
future, and if the US doesn’t get its hands on them, someone else will.
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