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Trump Ties Ukraine Aid to US$500 Billion in Rare Earths

by February 14, 2025
February 14, 2025
Trump Ties Ukraine Aid to US$500 Billion in Rare Earths

US President Donald Trump has linked continued American support for Ukraine in its war against Russia to securing US$500 billion worth of critical minerals from the country.

“I told them I want the equivalent of like US$500 billion worth of rare earth,” he said in an interview with Fox News.

Trump added that ongoing aid without securing such assets would be an unsustainable approach, noting that financial assistance should be matched by corresponding resource access.

Ukraine reportedly holds significant deposits of rare earth elements, as well as lithium, titanium and other critical minerals necessary for advanced technology and defense manufacturing.

While the country has sought international partnerships to develop its resource sector, much of its mineral wealth remains untapped or is located in contested regions affected by the war.

Trump’s remarks are a reflection of US interest in securing alternative supply chains for critical minerals. While the US is keen to ramp up domestic output, it is also looking to reduce dependence on Chinese suppliers.

Ukraine has positioned its mineral wealth as a strategic bargaining tool, with President Volodymyr Zelensky promoting resource development as part of his country’s long-term recovery and defense strategy. In a recent interview, he said he is open to discussions with the US regarding mineral extraction and economic partnerships.

“The Americans helped the most, and therefore the Americans should earn the most,” Zelensky said, also indicating that Ukraine’s allies will play a role in post-war reconstruction, which will include resource development.

Despite Ukraine’s potential for large-scale resource extraction, industry experts caution that developing the country’s mining sector presents challenges. Many deposits require substantial investment before they can be commercially viable, and on top of that, ongoing conflict in the country complicates new mining operations.

The Zavallivsky graphite mine, a 90 year old operation in Ukraine, illustrates these difficulties. It is currently facing equipment shortages, workforce reductions due to the war and disruptions in funding.

Speaking to Reuters, CEO Ostap Kostyuk acknowledged the potential for expansion, but noted that outdated infrastructure and financing issues limit production. “No matter what, it’s a long-term investment,” he explained to the news outlet, emphasizing that it would take years to scale up operations to meet US demand.

As a whole, Ukraine’s mining sector has struggled with chronic underinvestment. The country’s mineral reserves were classified over two decades ago, making it difficult to assess their current and full economic potential.

Ksenia Orynchak, head of the National Extractive Industries Association, echoed the idea that without significant foreign investment, large-scale mineral extraction will remain a challenge.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com
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