Trump says minerals deal with Ukraine is worth billions. Is it?

Ukraine may have turned the wave into its rock relations with the US by offering President Donald Trump’s administration in its critical minerals as part of wider peace negotiations, but experts warn that this question remains about the value and access of such deposits.

Ukraine President Volodymyr Zelenskyy is set to travel to Washington Friday for a possible signature of a deal with Trump that would see Kyiv and US together develop and earn money and earn Ukraine deposits of rare land, critical minerals, gas and other natural resources.

Trump previously said he saw the agreement as compensation for US aid to Ukraine throughout the war with Russia, and claimed the deal was worth $ 500 billion.

Speaking on Thursday, the US president also said the economic pact would serve to prevent further Russian aggression. “We are a background because we will be there, we will work in the country. This is an economically excellent thing for them,” he said in the Oval Office.

“Frame Agreement”, as Ukraine described on Wednesday, however, did not mention the figure of $ 500 billion or the most widely value of the deal. Ukraine has already discussed a lot of it owes the US.

That Ukraine has “significant deposits of rare lands”, as stated in the United Nations, is not generally discussed. The site is seen to be a treasure trove of rare land metal deposits such as lithium and cobalt – widely used in rechargeable batteries for electronic devices – as well as scandium (an aluminum alloy), graphin (used in the production of vehicle electric batteries), Tantali (also used in electronic equipment), and NIOBIUM, which is used.

“About 5% of all ‘critical raw materials’ in the world are located in Ukraine, which occupies only 0.4 percent of the land area,” said Deputy Minister of Environment and Natural Resources of Ukraine Svetlana Grinchuk again in 2022.

Analysts say there are many unanswered questions about the size of the rare lands of Ukraine and strategic mineral deposits, however, and how accessible to Russia’s profession for a Ukrainian swathe and the massive reconstruction process that the country will face after the war.

They also question the final value of an American-Ukraine agreement given the change of demand for such natural resources.

Natalia Shapoval, head of the KSE Institute, an opinion within the Kyiv Economic School, which has compiled a Ukrainian critical mineral database, said President Trump’s request for deposits worth $ 500 billion was “theoretically possible”.

“I think there will be a compliance with this figure that Trump mentioned,” Shapoval CNBC told the video call earlier this month. However, it questioned the validity of some of the current estimates of the Soviet era.

“Other ratings are still confidential,” she continued. “There, the numbers are lower and may not be in trillions.”

However, complicating issues are the location of Ukraine’s mineral wealth, with the majority located in mainly occupied Russian territories of Luhansk and Donetsk, in eastern Ukraine, as well as Central Dnpropetrovsk, and the southern and partially Russian occupied areas of Zaporizhia.

Not only an active war is enraged in those areas, making the entry contingent on the outcome of the war and any subsequent peace agreement, but they are very mined, making the extraction very difficult in the future.

There has been a lot of buzz about Ukraine’s “rare land” minerals, but the country in fact has no large amounts of rare elements, according to experts in the Atlantic Council.

“What is in place is the important reserve of Titan, graphite and lithium, which are fundamental resources for the American Defense Industry and the wider high -tech economy,” commented Reed Blakemore, Director of Research and Programs at the Atlantic Council’s Global Energy Center.

But access to these minerals, along with other reserves of aluminum and hydrocarbons, will depend on the outcome of the ongoing war, he noted.

“A considerable part of these sources, active and indecisive, are in the third eastern Ukraine,” Reed said.

Geopolitical expert Robert Muggah, the founder of the Second Group consulting and a frequent commentator on the critical Ukraine minerals, noted earlier this week that while Ukraine may be an attractive proposal for investment partners seeking money from its critical minerals “actually taking it out of the field is a completely different issue.

“Russia currently occupies over 60% of Ukraine coal mines [which] Potentially denies income for Ukraine and deepens Russian influence on supply chains, “he told X.

Even after the minerals are extracted there will be additional obstacles to overcome.

“China remains far and away from the predominant market force in minerals by refining and elaborating,” noted the Reed of the Atlantic Council on Wednesday.

“For a deal to really de-exist the supply chain of American minerals, more infrastructure is likely to ensure that newly acquired mineral ores not flow to Beijing.” Currently, he stated, “the United States lacks infrastructure to transport and refine these ores to Europe or North America on the scale.”

– CNBC Karen Gilchrist contributed to this report.