The deal President Donald Trump and Ukrainian President Volodymyr Zelensky are expected to sign Friday hinges on a bullish view of Ukraine’s critical mineral wealth. Both parties have reason to project optimism. But significant questions remain about Ukraine’s mineral endowments and the economic viability of extracting them.
The deal would establish a reconstruction fund to be capitalized by revenue from the sale of Ukraine’s “government-owned” natural resource assets, “including, but not limited to, deposits of minerals, hydrocarbons, oil, natural gas, and other extractable materials, infrastructure, ports, and state-owned enterprises.”
The U.S. is attempting to diversify U.S. mineral supply chains away from China. Recent discussions of Ukraine’s mineral wealth have focused on lithium, graphite and manganese, which are key for green energy and electric vehicles, as well as uranium, titanium, tungsten, and rare earths. So how vast are Ukraine’s resources of these prized materials? The answer depends on whom you ask and some arcane but important mining industry terminology.
Those proven resources aren’t exceptionally vast, suggest the United States Geological Survey’s “Mineral Commodity Summaries,” considered an authoritative source. In 2024, Ukraine’s share of global production of these minerals didn’t eclipse 1%. For reserves, only titanium and uranium, and potentially graphite, are significant but still small. Of course, it isn’t surprising that Ukraine’s mining sector may have contracted due to the recent violence. Russia annexed Crimea and began a proxy occupation of Ukraine’s eastern territories in 2013, and launched its full-scale invasion in 2022. Prewar (2013) production levels for manganese, titanium, and uranium were globally consequential but modest, as were reserves with the exception of manganese. In 2013, Ukraine’s manganese reserves were second only to those of South Africa.
Some academic studies suggest Ukraine’s mineral resources are potentially much vaster. A 2022 study by geologists associated with the Institute of Geology at the Taras Shevchenko National University of Kyiv suggests the country has large deposits of these minerals, plus tantalum and others. An infographic published by the Kyiv School of Economics indicates Ukraine has deposits of 20 of the 50 resources the European Union has identified as critical raw materials.
But these studies need to be contextualized in the parlance of the mining industry. “Deposits” are simply concentrations of particular minerals that have been identified or inferred from geological markers. “Resources” are those deposits that have been identified and are potentially extractable. “Reserves” are the subset of resources that are economically viable given current technology and market prices. Deposits and resources are typically so vast and widely distributed that the USGS doesn’t bother reporting anything but global estimates.
Announcements of newly discovered reserves—like India’s potentially massive lithium bounty announced in 2023—tend to make headlines. But bringing those reserves into actual, economically viable production is often complicated by a host of factors including the nature of the deposits, the price environment, availability of finance, and the political risk associated with operating a mine in a particular place.
Prices for energy transition minerals have rebounded somewhat recently, but they remain 25% below the high prices of 2022 that spurred so much interest in the sector, according to International Monetary Fund data. There are actual functioning mines in safe, Western operating environments that are currently in care and maintenance, meaning production has been paused but the facility is being maintained in operational shape if and when prices rebound. If Western miners can’t profitably operate in Western Australia because of the current price environment, it is hard to see how start-up mines in Ukraine—which has seen its infrastructure massively degraded and buzzy topic in both industrial and national security circles, so targeting them allows Trump to claim a victory in the path toward diversifying U.S. critical mineral supplies away from China.
For Zelensky, casting the potential bevy of subsoil resources—a form of collateral that is virtually impossible for Russia to destroy or significantly degrade—in the most positive light possible is in Ukraine’s interest. The cost of conceding essentially an upside option on developing uncertain mineral resources sacrifices no currently expected government revenue.
Ukraine’s potential mineral wealth makes for compelling headlines, but turning deposits into dollars for the people of Ukraine—or the U.S. government and U.S. firms—will follow a long, uncertain path. For both Trump and Zelensky, the narrative is politically convenient. The reality may be far less lucrative.
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About the author: Cullen Hendrix is senior fellow at the Peterson Institute for International Economics and fellow at the Payne Institute for Public Policy at the Colorado School of Mines.
