Rare Earth Riches in Ukraine: Myth or Untapped Potential?

Ukraine’s Rare Earth Minerals: A Reality Check

Potential vs. Reality of Ukraine’s Critical Mineral Deposits

Recent attention has been drawn to Ukraine’s significant deposits of critical minerals, including rare earth elements (REEs) such as neodymium and dysprosium, along with lithium, titanium, graphite, and uranium. These resources are vital for industries like technology, defense, and renewable energy. However, President Trump’s proposed agreement to leverage Ukrainian mineral wealth as compensation for U.S. aid sparked intense debate regarding the feasibility of extraction and actual reserve quantities.

Expert Insight on Mineral Reserves and Standards

Professor Michael McKibben, a geochemist and economic geologist at UC Riverside and co-author of the 2023 U.S. Department of Energy report, provided crucial insights into the accuracy and reliability of Ukraine’s reported mineral wealth. According to international reporting standards—such as JORC, NI 43-101, and SAMREC—accurate classification as “reserves” requires extensive drilling, assaying, and rigorous economic feasibility studies. McKibben emphasized that Ukraine’s existing data mostly stem from outdated Soviet-era reports, which lack detailed modern assessments, making them unreliable for current investment decisions.

Challenges in Mining Ukraine’s Resources

Despite claims of vast mineral riches, practical challenges pose significant barriers. Much of Ukraine’s potential rare earth and lithium resources are situated in hard rock formations, particularly granitic rocks and spodumene, making extraction costly compared to easier-to-process sources such as lithium brines or carbonate-hosted rare earth deposits found in other regions. Additionally, ongoing conflicts and Russian occupation of resource-rich territories like Zaporizhzhia and Donetsk exacerbate the difficulty of safely accessing these areas, significantly elevating operational and geopolitical risks.

Risks of Investment and Geopolitical Uncertainty

McKibben pointed out that unexploded military ordinance scattered throughout Ukraine due to the ongoing war creates a significant barrier to exploration and mining. Even after a ceasefire, clearing these areas for safe mining operations could require extensive, expensive cleanup efforts reminiscent of a Marshall Plan-scale initiative. The unclear legal framework for mineral rights, coupled with the lingering risk of nationalization or military reoccupation by Russian forces, further complicates potential investments.

Could Ukraine’s Resources Be Underestimated?

While skepticism exists regarding inflated claims of Ukraine’s mineral wealth, McKibben acknowledged the possibility that resources might be underestimated due to outdated exploration methods. However, he maintains a cautious perspective, emphasizing that accurate and modern exploration studies are crucial before committing significant resources to extraction operations.

Strategic vs. Rare Earth Minerals: Clarifying Misconceptions

A critical issue highlighted during the discussion was the confusion between strategic minerals and rare earth elements. Reports suggesting Ukraine possesses vast quantities of rare earths mistakenly categorized strategic minerals like tantalum, niobium, and beryllium as REEs, misleading policymakers and investors. McKibben clarified that the rare earth elements list is fixed and distinct, consisting specifically of lanthanide series elements, and emphasized the need for accurate terminology and reporting standards.

Economic Feasibility and Investment Scale

The scale of investment needed to safely explore and mine Ukraine’s mineral resources is potentially enormous, reaching billions of dollars. With the global rare earth market size limited to roughly $10–12 billion annually and dominated by China, economic viability remains uncertain. Companies typically require a substantial revenue threshold to justify investments in risky regions, raising concerns about the profitability and practicality of rare earth extraction in Ukraine under current conditions.