U.S. and Ukraine broker deal to unlock critical mineral wealth
The United States and Ukraine reached an economic partnership agreement on Wednesday aimed at collaborating in the extraction of critical minerals, including rare earth metals. Ukraine's resources in this area could play a crucial role in the global economy.
The agreement also entails the creation of the American-Ukrainian Investment Fund for Reconstruction. The BBC reports that Ukraine's resources in this field could play a key role in the global economy.
Modern technologies need these resources
Ukraine possesses about 5% of the world’s reserves of critical minerals, including significant deposits of rare earth metals. These 17 elements are essential for the production of modern technologies such as weapons, turbines, and electronic equipment. Cooperation with the USA could contribute to increasing the extraction of these resources and strengthening Ukraine’s position in the international market.
However, some Ukrainian deposits are currently under Russian control. Deputy Prime Minister and Minister of Economic Affairs of Ukraine, Yulia Svyrydenko, emphasises that resources valued at an estimated 350 billion dollars (263 billion pounds) are located in the occupied territories. The consulting firm SecDev determined in 2022 that as a result of the invasion, Russia took over 63% of Ukraine’s coal deposits and half of the resources of magnesium, ceasium, tantalum, and rare earth metals.
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In addition to rare earth metals, Ukraine has 17 million metric tonnes of graphite, placing it among the five countries with the richest deposits of this resource. Graphite is crucial for the production of batteries for electric cars. The country also has 7% of Europe’s titanium resources, used in the construction of aeroplanes and power plants, and one-third of Europe’s lithium deposits, essential for the production of modern batteries.
Ukraine also boasts significant deposits of beryllium and uranium, key for the nuclear industry. Additionally, Ukraine has abundant resources of copper, lead, zinc, silver, nickel, cobalt, and magnesium. Robert Muggah, head of SecDev, notes that critical resources form the backbone of the 21st-century economy and are increasingly significant in geopolitics and the global economy.
The United States aims to reduce dependence on China, which controls 75% of the world’s rare earth metal resources. In recent years, China has imposed export restrictions on these resources to the USA, increasing the need for supply diversification. The new agreement with Ukraine could be a key step towards securing access to the necessary resources for American industry.
