CRITICAL MINERALSThe Value of Ukraine’s Critical Minerals Is Overstated
In fact, Ukraine has no proven rare earths reserves—as distinct from deposits, which may or may not be economically recoverable. Its only established rare earths deposit, of unknown size or quality, is near Azov, a town currently under Russian control.
Anyone involved in Australia’s critical minerals industry would be rolling their eyes at the transaction still reported to be under consideration between Ukraine and the United States.
US President Donald Trump was initially asking for the first US$500 billion in proceeds from Ukraine’s minerals development. Preliminary discussions spoke about the country’s critical minerals reserves being worth ‘trillions of dollars’.
As Lynas Rare Earths chief executive, Amanda Lacaze, said to The Australian:
In the time that I’ve been involved in rare earths, I’ve heard about a rare earth race to the moon because there could be lots of mining on the moon to get rare earths.
I’ve heard about a sort of rare earths race to the sea floor because there’s lots of rare earths on the sea floor, which could be useful in the future. I heard about a rare earths race to Afghanistan at one stage.
In fact, Ukraine has no proven rare earths reserves—as distinct from deposits, which may or may not be economically recoverable. Its only established rare earths deposit, of unknown size or quality, is near Azov, a town currently under Russian control.
Ukraine does have some other critical minerals, but nothing established to the point that it would warrant the investment of billions of dollars, let alone hundreds of billions or trillions.
Ukraine’s geological survey agency claims 19 million tonnes of reserves of graphite, used for batteries. China was the major world supplier of graphite, but it restricted exports last October in response to US controls on sales of semi-conductors.
Australian listed company Volt Resources holds 70 percent of Ukraine’s major graphite operation, the Zavallivsky mine, which has been active since 1934. However, its output is not up to lithium-battery standards. The scale of its operation is indicated by Volt’s market value of just $18 million.
Ukraine has more substantial deposits of manganese, but its output is barely a tenth of Australia’s and would earn it little more than $200 million a year. Ukraine’s claims of critical minerals riches mainly rest on Soviet geological surveys done 30 to 60 years ago, not nearly recent enough to justify investment by Western financial standards.
Trump said Ukraine ‘holds no cards’ in negotiations over its future. Ukraine’s government essentially invented its mineral riches to give itself a card to deal with Trump.
