Ukraine's $14.8 trillion mineral potential

The United States and Ukraine agreed on February 25 on the framework for a potential mineral deal. The draft agreement is said to stipulate that the United States and Ukraine will jointly exploit mineral resources in Ukraine, with revenues going into a completely new investment fund jointly managed by both sides.

Ukraine ranks 40th among mineral-producing countries and possesses about 5% of the world's mineral reserves, according to the World Mining Data (WMD) 2024.

Geologists, including members of the French Bureau of Geological and Mining Research (BRGM), identified more than 100 mineral resources in Ukraine in a study published in 2023, including iron, manganese, graphite, titanium, lithium and uranium.

Total,Forbes UkraineIn April 2023, Ukraine was estimated to have 111 billion tons of natural resources worth $14.8 trillion. However, 70% of these are in Donetsk and Lugansk, two of the four regions that Russia annexed in late September 2022, despite Kiev's objections. Russia has not yet fully controlled any of the regions.

President Trump often mentions “rare earths” when talking about the mineral deal with Ukraine. However, the country’s rare earth potential has not been truly exploited.

Rare earths consist of 17 metallic elements and are relatively abundant in the Earth's crust, but are difficult to mine, and the amount obtained compared to the amount of excavated soil and rock is very low. In addition, metals in nature are often in compound form and need to be refined before use.

Rare earths are important raw materials in the production of high-tech devices, such as smartphones and electric car batteries. The defense industry uses rare earths in weapons manufacturing.

According to the Institute for the Study of War (ISW), about half of Ukraine’s rare earth reserves are located in Russian-controlled territory. In 2023, BRGM said Ukraine “has significant rare earth resources,” but requires significant investment in exploration and development.

According to the Geological Institute of Ukraine, the country has rare earth elements such as lanthanum and cerium, used in TVs and lighting; neodymium, used in wind turbines and electric car batteries; and erbium and yttrium, which have applications in nuclear energy and lasers. EU-funded research also shows that Ukraine has scandium reserves.

“Ukraine has a number of deposits containing rare earth elements, but none of them are exploited,” said Elena Safirova, a Ukraine expert at the US Geological Survey (USGS).

Credit rating agency S&P assessed in February that Ukraine's rare earths may be too difficult to access and mine, making mines "likely unprofitable."

In addition to rare earths, Ukraine also has significant amounts of other minerals such as lithium, titanium, zirconium, and uranium.

United Nations News SiteUN NewsThe 2022 USGS report said Ukraine has 20 of the 31 elements defined by the European Union (EU) as "critical raw materials." The 2022 USGS listed 50 minerals that are important to the future US economy and national security, and Ukraine has 20 of them.

Titanium is used in construction, aircraft, orthopedic implants, and as an additive in paints and cosmetics, among other applications. Ukraine’s titanium mines are mainly located in the northwest and central regions, which remain under Kiev’s control. According to the European Commission, Ukraine supplied about 7% of the world’s total titanium supply in 2019.

Ukraine has about 33 million tons of lithium ore, worth $38 billion. The metal is an important ingredient in the production of batteries, especially electric car batteries, and other industrial products. Before the war with Russia broke out, Ukrainian officials had urged billionaire Elon Musk to invest in lithium mines in the country.

Graphite ore reserves are about 19 million tons, among the top 5 countries with the most resources in the world. Graphite also has many applications, such as in industrial lubricants and battery manufacturing.

Before the conflict, Ukraine produced about 10,000 tons of graphite per year, according to the USGS, but that fell by 95% in 2023 due to the fighting. Meanwhile, in 2023, all of the graphite in the US was imported.

Uranium has applications in nuclear power plants and nuclear weapons. Ukraine has the largest uranium reserves in Europe.

Ukraine is also rich in many other common resources such as copper, iron ore, oil and gas.

In 2022, Ukraine ranked 10th in the world in iron production, according to WMD. Before the conflict, Ukraine was the world's fifth-largest exporter of iron ore, worth $6.8 billion in 2021, according toKyiv Post.

The We Build Ukraine think tank and the National Institute for Strategic Studies, Ukraine, estimate that 40% of Ukraine's metal reserves are located in Russian-controlled areas, but did not provide detailed figures.

Ukraine’s Deputy Economy Minister Oleksiy Sobolev said in January that the government is working with the United States, Britain, France and Italy on projects related to essential resources. Kiev estimates total potential investment in the sector at $12-15 billion by 2033.

US President Donald Trump in early February wanted Ukraine to provide rare earths equivalent to $500 billion to repay what it had received from Washington since the conflict with Russia broke out in February 2022. Ukrainian President Volodymyr Zelensky refused, saying the US aid amount was less than $500 billion and wanted Washington to provide security guarantees for Kiev.

The U.S. has dropped its demand for $500 billion in natural resource revenues, Ukrainian officials said. While the potential draft does not include explicit security commitments, Ukrainian officials say they have negotiated much more favorable terms and see the deal as a way to expand ties with the U.S.