US President Donald Trump’s idea of exchanging support for Ukraine in return for access to the country’s rare earth elements and other in-demand raw materials could benefit Ukraine’s economy, the Ukrainian Center for Economic Strategy (CES) said in a post on Telegram.
The CES said the exchange could boost Ukraine’s heavy industries and provide guarantees for its investment climate.
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Attracting foreign investment into the development of critical minerals would help integrate Ukraine into global production chains and boost the country’s economy, CES wrote. However, outdated research data and corruption could become a big problem.
The worldwide production of rare earth elements, such as scandium, yttrium, lanthanum and other lanthanide elements, is around only 354,000 tons, of which China produces 68%, the US 2%, Australia 5%, and the balance by other countries. Estimates of the global reserves of these elements are put at 110 million tons, the bulk of which is in China, according to the CES senior economist Volodymyr Landa.
In Ukraine, access to deposits of these rare earth elements are limited, because some are located in Russian occupied territories although the exact data on location and quantities is a state secret.
Additionally foreign investors are actually showing interested in Ukraine’s reserves of other strategic minerals. This focus is primarily on titanium (for mechanical engineering, paints and plastics), lithium (battery manufacturing, glass, and ceramics), and nickel, CES siad.
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Quantities of titanium in Ukraine
Ukraine holds about 1% of the world’s titanium reserves (8 million tons) which, before Russia’s full-scale invasion, CES estimated supplied 6-7% of global titanium ore production and titanium concentrates.
In 2024, Ukraine significantly reduced titanium production to 120,000 tons of ilmenite concentrate and 10,000 tons of rutile concentrate, according to CES on data obtained from the US Geological Survey (USGS).
Last year, Ukraine sold its largest titanium producer, the United Mining and Chemical Company (UMCC-Titanium), to private ownership for nearly Hr.4 billion ($96.7 million). The company operates two major titanium ore mining and processing plants in Dnipropetrovsk and Zhytomyr regions.
Ukrainian lithium reserves are said to be the second largest in Europe after Germany, CES said. The Kruta Balka deposit is in the Russian-occupied Zaporizhzhia region, the Shevchenkivske deposit is on the front line in the Kharkiv region, and other deposits are located in the Kirovohrad region, which suffers from Russian attacks.
What about Ukraine’s nickel and cobalt deposits?
Ukraine has confirmed nickel reserves of around 215,000 tons, against CES estimates of total global reserves at 58 million tons. Nickel ores contain cobalt, of which Ukraine has 100 thousand tons, or slightly less than 1% of world reserves, according to various estimates.
These metals are considered critical raw materials and are of great interest to industry in both the US and the EU. Demand for nickel and cobalt is growing due to the role they play in electric vehicle development, “green” energy, and other high-tech products.
How can Ukraine benefit from US investments in its minerals?
Attracting foreign investors for the development of critical minerals would help integrate Ukraine into global production chains, CES suggests.
US investment could also protect Ukraine’s mineral deposits, particularly those located in Russian-occupied territories or at risk from the Russian invasion, as investors would seek secure locations offering potential profit, CES addse.
Direct foreign investment would also help to create new jobs in the industry and related sectors, helping to boost Ukraine’s economy, which has been slowly developing despite the war.
Why critical mineral mining in Ukraine may be unprofitable
Many potential mineral reserves remain untapped because extraction is currently unprofitable. Transporting minerals from Australia or Canada to the EU could be cheaper than establishing a full mining cycle from scratch in Ukraine, CES Deputy Director Maria Repko wrote in her Facebook post.
Also, as current detailed geological data on Ukraine’s mineral deposits remains classified, much of the available information dates from the Soviet era. Conducting a modern geological survey to international standards could cost tens or even hundreds of millions of dollars, requiring major upfront investment with no guaranteed return, Repko said.
Another potential problem is corruption, that despite efforts to tackle it has yet to be eradicated from Ukrainian markets. Knowing that possibility, investors might be less willing to spend their billions on such developments.
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