Our Opinion: 2025
Deposits and returns
Just weeks after a shouting match between Donald Trump and Volodymyr Zelensky in the Oval Office halted peace talks between the two leaders, Ukraine has said it is ready to accept a US proposal for an immediate 30-day ceasefire in its war with Russia.
Russia still needs to agree to the proposed ceasefire, but it is a far cry from where talks looked set to end up following the fiery public spat that saw Zelensky leave the White House with the minerals deal between the two countries unsigned. Ukraine’s mineral wealth has been a key factor in its negotiation between the two countries, and US interest in Ukraine’s minerals is particularly centered around its reserves of critical minerals and rare earth elements (REEs).
Ukraine sits on one of the world’s most remarkable geological formations known as the “Ukrainian shield”, a huge exposed crystalline rock the size of Britain formed over 2.5 billion years ago that stretches from near the Belarusian border in the north-west to the Donbas in the east. Favourable geological conditions over the years have meant that the country has an abundance of minerals such as lithium, titanium, graphite, manganese and rare earth elements such as neodymium and yttrium.
All of these critical minerals are essential for manufacturing high-tech products such as electric vehicle batteries, wind turbines, solar panels and energy storage systems, and as the global shift towards green energy and electric transportation accelerates, so does the demand for these minerals.
For the Trump administration, the main draws appear to be titanium and lithium. Ukrainian metals like titanium could help America reduce its reliance on China and Russia, but extracting from new sites will require serious investment, and not all of it will be cost effective. For example, Ukraine has three major lithium deposits, all within the Ukrainian Shield. One of them is The Shevchenkivske lithium deposit which contains high concentrations of spodumene, the primary lithium-bearing mineral used in battery production. Its reserve is estimated at 13.8 million tonnes of lithium ores, but extracting it requires an estimated US$10–20 million in exploration investment before mining can begin. This is the case with many of Ukraine’s mineral deposits that have remained largely unexplored due to the war with Russia.
Much of Ukraine’s infrastructure has been damaged in the war and will need rebuilding, which means significant upfront costs for the US, with delayed returns. Investment in mining and processing technology will be required, but above all, assurances of no further military conflict will be essential to rebuilding Ukraine’s mining future.
Trump has suggested the presence of US contractors in Ukraine would act as a security guarantee, but responsibility for Ukraine’s security would now fall to Europe. Whether this will be enough to satisfy Zelensky and keep Putin at bay remains to be seen.
Ukraine has deposits containing 22 of 34 critical minerals identified by the European Union as essential for energy security. This positions Ukraine among the world’s most resource-rich nations. Once stability returns, Ukraine has a huge opportunity to reshape the global supply chain for critical minerals. Even with a 50% allocation to the US, Ukraine would still be able to fund domestic infrastructure, industry growth, jobs and economic recovery.
But for now, this all feels a long way off, and as Russian drones and missiles continue to rain down on Ukraine, the ball is now very much in Putin’s court.
14th March 2025
