Can Ukraine really give Trump his rare earth “payback”?

On February 3, US President Donald Trump stated that he wanted Ukraine to supply the US with rare earth elements in exchange for American financial support in Kiev’s war against Russia. He said the US was looking to strike a deal for Ukraine’s “rare earths and other things.”

This proposal comes as tensions with China — the world’s largest rare earth producer — complicate global supply chains. Washington is keen to reduce its reliance on Beijing for the rare earth elements (REE).

For decades, this group of 17 chemically similar metals has been at the heart of global industries, widely used in technology and military defense.

Beijing dominates the market by producing 60 percent of the world’s rare earths and processing 90 percent. It also supplies 98 percent of the EU’s and 80 percent of the US imports of REE.

Trump’s demand for a $500 billion “payback” in these rare earth minerals has sparked debate over both the feasibility of such a deal and whether Ukraine’s deposits are significant enough to make a dent in global supply.

According to AP, a senior Ukranian official has said that President Zelenskyy wouldn't sign it for it being “a colonial agreement.”

But does Ukraine really hold the key to breaking China’s grip, or is this an expensive geopolitical miscalculation?

What does Ukraine actually have?

Ukraine is often cited as having substantial rare earth deposits, with President Zelenskyy stating that Russia now controls nearly half of them.

According to the Institute of Geology, Ukraine’s minerals include lanthanum and cerium (used in TVs and lighting), neodymium (used in wind turbines and EV batteries), and erbium and yttrium (used in nuclear power and lasers).

However, a closer examination reveals that the reality is far more complicated and less promising than these claims suggest.

The US Geological Survey (USGS), a leading authority on mineral resources, does not list Ukraine as having any rare earth reserves.

Bloomberg columnist Javier Blas argues that the excitement over Ukraine’s rare earth potential largely comes from the country’s own efforts to attract US interest. This became evident in November when President Volodymyr Zelenskyy introduced a “victory plan” that critics say inflated Ukraine’s mineral wealth.

“While Ukraine does have a number of mineral resources such as potash which is used for fertiliser as well as titanium, the country lacks any meaningful deposits of rare earth-bearing minerals,” says David S. Abraham, director of the Technology, Rare, and Electronics Materials Centre.

Abraham adds that having mineral deposits doesn’t automatically translate to active, profitable mining operations — a process that requires stable infrastructure and years of development.

War and depletion

Ukraine’s mineral wealth, already limited, is now fractured by the war. Before the war, Ukraine was a major producer of iron ore and coal.

“There are significant deposits, but that does not mean they turn into mines,” Abraham says.

Beyond rare earths, Ukraine’s mining sector has long been a key pillar of its economy.

“The mining contributed around $20 billion annually to the country’s GDP representing about 15 percent of the country’s pre-war industrial output,” he adds.

The war has severely disrupted extraction efforts, and many of Ukraine’s most resource-rich regions are now under Russian control.

Over $7.5 trillion of Ukraine’s mineral resources, which is around 53 percent of the country’s total, are contained in the four regions – Luhansk, Donetsk, Zaporizhzhia, and Kherson – that Russia annexed in September 2022.

Even if Ukraine did possess large rare earth reserves, rebuilding mining infrastructure and establishing supply chains would take years — far longer than Trump’s envisioned timeline for a US-Ukraine deal.