Continued
“A deeper analysis reveals that the economic importance of Ukraine's minerals is greatly overestimated“, writes Javier Blas, an analyst at Bloomberg. “Rare earth elements are presented as strategically critical resources, but their annual global production amounts to only $15 billion - the equivalent of two days of oil production.“
According to European and American institutes, Ukraine has less than 1% of these resources. And estimates made back in the Soviet era have yet to be confirmed by new research.
Furthermore, contrary to Ukrainian claims that only 20% of the deposits in Donbas are under Russian control, the reality seems more complicated. According to maps, about 40% are either out of control or close to the front line. Analyst George Eagle of Benchmark Mineral Intelligence states that “Ukraine's rare earths will not be profitable for the next 10-15 years”, while China already dominates the market, controlling over 90% of the world's low-cost refining.
As for strategic minerals such as lithium, titanium and graphite, they are the subject of serious interest in Ukraine. The Austrian company European Lithium has already received concessions for lithium mining. The Australian Volt Resources has been granted the right to mine graphite. Local oligarchs have not been ignored either – Gennady Butkevich's BGV Group, with a fortune of $530 million, signed agreements with international partners in February, during the “Ukrainian Week“ in Washington.
The largest titanium company was sold in October through the electronic portal Prozorro to Nasib Khusanov – an Azerbaijani businessman close to President Ilham Aliyev, for $97 million. He was the only candidate at the auction!
The British, who unconditionally support Zelensky, signed on January 17 a “100-year partnership“ with Ukraine to “develop a strategy for critical minerals“, similar to the 2021 agreement with the EU. On February 28, French Defense Minister Sebastien Lecornu revealed that France is also negotiating with Kiev for a partnership in the extraction of these minerals for the next 30-40 years.
Will Trump manage to secure Ukraine's 1% of rare earth metals? Or is he already looking at other options, while his envoys are negotiating with Russian representatives, including Kirill Dmitriev, director of the Russian Direct Investment Fund (RDIF), who has an increasingly important role in the talks.
The text was published in the French magazine "Marianne", translated by Bozhidar CHEKOV
Rumyana Ugarchinska is the author of "The Gas War – the Russian Threat", published by Du Rocher