By P.K.Balachandran
Colombo, March 3: Rare earths are strategic elements essential for developing computers, batteries, and cutting-edge energy technologies.
They are abundant in the Earth’s crust across the globe. In 2024, the US Geological Survey estimated that there were 110 million tonnes of rare earth deposits worldwide, including 44 million in China – by far the world’s largest producer. A further 22 million tonnes are estimated to be in Brazil, 21 million in Vietnam, Russia has 10 million and India seven million tonnes.
Each of the 17 rare earths is used in industry and in a wide variety of devices, from lightbulbs to guided missiles. Europium is used in fluorescent-light and radar systems; cerium is used for polishing glass and in automobile catalytic converters; lanthanum salts are used in refining oil while alloys with lanthanum are used in the power systems of hybrid and hydrogen-gas cars.
Neodymium and dysprosium, for example, allow the fabrication of almost permanent, super-strong magnets that require little maintenance, making viable the placement of ocean wind turbines to generate electricity far from the coastline.
It is noteworthy that all have unique properties that are almost irreplaceable or can be substituted only at prohibitive cost, The Guardian.
Mining the metals requires heavy chemical use that results in huge amounts of toxic waste which has caused several environmental disasters, making many countries wary of shouldering the considerable costs for production, The Guardian points out.
And these rare earths are often found in minute ore concentrations, which means that large amounts of rock must be processed to produce the refined product, often in powder form.
China’s Hold on Rare Earths
Again according to The Guardian, “For decades, China has made the most of its rare earth reserves by investing massively in refining operations. China has also filed a huge number of patents on rare earth production. This is an obstacle to companies in other countries hoping to launch large-scale processing.
“While rare earths reserves are plentiful elsewhere, many firms find it cheaper to ship their unprocessed ore to China for refining, further reinforcing the world’s reliance on China. The US and EU get most of their supply from China, but both are trying to boost their own production to reduce dependence on China.”
Therefore, if Trump pulls off a deal with Ukraine and Russia on rear earth supplies, it will be of huge advantage to the US in its burgeoning competition with China.
Ukraine’s Mineral Wealth
It is believed that about 5% of the world’s “critical raw materials” are in Ukraine. This includes some 19 million tonnes of proven reserves of graphite, which the Ukrainian Geological Survey says makes the nation “one of the top five leading countries” for graphite.
Graphite is used to make batteries for electric vehicles. Ukraine also has significant deposits of titanium and lithium. It says it has substantial amounts of the world’s rare earth metals – a group of 17 elements that are used to produce weapons, wind turbines, electronics and other products vital in the modern world. However according to NBC, industry experts say the precise value and volume of Ukraine’s mineral wealth remains unclear.
Speaking to Fox News about a possible mineral deal with Ukraine, Trump said, “ I told them that I want the equivalent of like US$ 500 billion worth of rare earth and they’ve essentially agreed to do that.”
But industry experts say that Trump’s reference to US$ 500 billion worth of rare earths in Ukraine seriously overstates the potential total value of the country’s rare earth reserves. The entire global rare earths market is worth only about US$ 12 billion, according to some estimates.
However, Ukraine has an abundance of scandium, a rare earth element, according to experts. But detailed information on these reserves is classified, NBC says. Scandium is used in everything from military equipment to sporting goods.
Ukraine also has other rare earths including cerium, dysprosium, erbium, gadolinium, holmium, lanthanum, lutetium, neodymium, praseodymium, samarium, terbium, thulium and yttrium. Ukraine also has other critical minerals that are not classified as rare earths but are valuable and required for weapons systems, aircraft and other sophisticated technology. The U.S. Geological Survey lists 50 minerals considered critical to national security and for America’s economy.
According to a 2023 study by Forbes Ukraine’s rare earth and other critical minerals could be worth as much as US$ 14.8 trillion.
Trump Seeks Hydrocarbons Also
Ukraine has a vast quantity of valuable hydrocarbon reserves, including coal, natural gas and oil. Volodymyr Landa, senior economist at the Centre for Economic Strategy in Kyiv, estimates that Ukraine’s hydrocarbon resources are worth roughly US$ 360 billion.
But more than half of Ukraine’s coal reserves and mines are in Russian occupied territory. About 20% of its natural gas fields and wells are also in the occupied territory. As of 2022, about 20% of Ukraine was occupied by Russian forces, and about 40% of the country’s minerals and rare earths were in that area.
Russia Interested
Russia has expressed interest in providing access to the US to its critical minerals in Russian-occupied territory, NBC News has reported. President Putin told state TV that he is ready to “offer” resources to American partners in joint projects, including mining in Russia’s “new territories” – a reference to parts of eastern Ukraine that Russia has occupied since launching a full-scale invasion three years ago.
Trump-Zelensky Deal That Wasn’t
There was a tentative agreement between Trump and Zelensky which was not signed because of the unseemly quarrel between the two in the White House in front of the media recently.
The tentative agreement was as follows according to the BBC -.It envisaged an “investment fund” that will be set up for war-devastated Ukraine’s reconstruction. Ukraine and the US would manage the fund on “equal terms”.
Ukraine would contribute 50% of future proceeds from state-owned mineral resources, oil and gas, to the fund, and the fund will then invest “to promote the safety, security and prosperity of Ukraine”. The US government will, subject to US law, “maintain a long-term financial commitment to the development of a stable and economically prosperous Ukraine”.
The agreement also states that the US will own the maximum amount of the fund allowed under US law. That is a restriction Ukraine will have to think about.
Security Issue the Road Block
However, Zelensky backed out of the deal. He went away from the White House without signing the deal . He told the BBC that it was “too early to talk about money” as Ukraine’s primary and immediate concern was about its security.
”If we don’t get security guarantees, we won’t have a ceasefire, nothing will work, nothing. There should be no compromises with Russian President Vladimir Putin,” Zelensky said.
With Trump showing no interest in Ukraine’s security, it would have to rely on the economically hard-pressed and under-armed Europe to defend itself against Putin’s Russia, a grave risk given the backing Putin is getting from Trump.
According to the International Institute of Strategic Studies, Russia’s military expenditure is now higher than Europe’s total defence spending. It’ had increased by 41% and is now the equivalent of 6.7% of GDP. In contrast, the UK will be spending just 2.5% by 2027. Britain’s army is only 70,000 strong. Europe, on its own, would not be able to provide a force of 100-200,000 international troops, which Zelensky suggests would be needed to deter Russia from attacking again. Western officials have said they’re thinking of a force of up to 30,000 troops only. But still, Zelensky is hopeful of getting Europe’s help to fight Russua. “I want to find a NATO path or something similar,” he told BBC.
Trump had told Zelensky categorically “make a deal or we’re out”, adding: “You don’t have the cards.” Trump also made it clear that the responsibility of Ukraine’s security should be Europe’s responsibility, not America’s. Therefore, Zelensky is stuck between the devil and the deep blue sea.
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