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Author: Nino Antadze, Associate Professor, Environmental Studies, University of Prince Edward Island
Original article: https://theconversation.com/ukraines-natural-resources-are-at-centre-stage-in-the-ongoing-war-and-will-likely-remain-there-249254
Three years after Russia’s invasion of Ukraine, the world now knows the exact price for American military support of Ukraine. During a recent interview with Fox News, United States President Donald Trump put a $500 billion price tag on American aid to the war-torn country.
But there was a catch: the exchange should be made in the form of Ukraine’s valuable natural resources, including rare earth minerals. “We have to get something. We can’t continue to pay this money,” Trump said in the interview.
Ukrainian President Volodymyr Zelenskyy has since told his aides to reject the proposal.
Given the dizzying pace of events that have unfolded since the Trump interview, it’s unclear now whether any deal with Ukraine on its rare earth minerals will ever come to pass. This is especially true given Trump’s subsequent surprise phone conversation with Russian leader Vladimir Putin and ongoing peace talks between the U.S. and Russia that have excluded Ukrainian and European Union officials.
But there’s little doubt Ukraine’s natural resources will be an important element in future diplomatic negotiations.
Always a strategic factor
Ukraine’s rich natural resources have always been a strategic factor in the war. To some extent, Russia’s invasion of Ukraine was driven by the interest to capture and control these resources — including critical minerals, fertile farmland and energy reserves.
Ukraine’s previous attempts to develop its mineral deposits and energy reserves — such as oil and gas privatization in 2013 and later attracting investments for the development of its mineral resource extraction in 2021 — were cut short first by Russia’s annexation of Crimea in 2014 and then by the full-scale Russian invasion in 2022.
In 2021, the European Union signed a strategic partnership with Ukraine to include “activities along the entire value chain of both primary and secondary critical raw materials and batteries.”
The timing of the military campaign against Ukraine may not have been determined solely by the country’s attempts to develop its natural resources, but they have certainly been a factor. Most of these deposits, including oil and gas fields, are located in the eastern and southern regions of Ukraine, which are currently either under Russian occupation or near the front line.
Ukraine’s mineral wealth
Ukraine’s mineral wealth amounts to about 20,000 mineral deposits and 116 types of minerals. Most of these deposits are unexplored, with only 15 per cent of all the deposits active prior to the Russian invasion.
Rare earth minerals are among this mineral wealth as demand for them has skyrocketed in the past several years.
According to recent estimates, Ukraine has the largest titanium reserves in Europe and seven per cent of the world’s reserves, as well as the largest lithium reserves in Europe. It also has significant production capacity when it comes to rare earth minerals.
(AP Photo/Efrem Lukatsky)
Ukraine also has confirmed deposits of beryllium, uranium and manganese. Before the war, Ukraine was the world’s fifth-largest producer of gallium and is a major producer of neon gas.
In addition, Ukraine also has large reserves of nonferrous metals, including copper, zinc, silver, lead, nickel, cobalt, as well as one of the largest global reserves of graphite.
Estimates vary, but Ukrainian critical mineral deposits could be worth trillions of dollars.
These resources are important from a geopolitical perspective: China has become the major supplier of rare earth minerals on the global market. Not only has China led in the extraction of these minerals, but it also has the largest production and refinement capacity.
As reliance on Chinese supply has increased, China used it as leverage during the U.S.-China trade dispute in 2019 and stopped rare earth exports to Japan in 2010.
China’s dominance in this sector means diversifying the supply of rare earth minerals has geopolitical importance, especially for the U.S. and the EU. They want to ensure the supply comes from a strategic partner — Ukraine.
Ukraine’s natural wealth
Ukraine’s natural riches go beyond critical minerals and include large deposits of hydrocarbons, particularly natural gas. Ukraine ranks second for natural gas reserves in Europe and fourth in terms of natural gas production.
Ukraine’s fertile soil — or chernozem, humus-rich grassland soils used extensively for growing cereals and raising livestock — is also economically and strategically important, making the country one of the largest exporters of food globally.
In 2021, Ukrainian wheat exports accounted for 12 per cent of the global wheat supply, 16 per cent of the global corn supply, 18 per cent of the global barley supply and almost half of the global supply of sunflower seeds, mainly to developing countries.
(AP Photo/Efrem Lukatsky)
Last but not least, Ukraine’s biodiversity, landscapes and ecosystems — some of which have been severely damaged due to the war — are invaluable to the country’s natural environment and essential for the health and well-being of Ukrainians.
The country’s nuclear facilities and radioactive sites are also at risk of being compromised, which would result in severe environmental and health ramifications in the region. In fact, a recent Russian drone attack reportedly damaged part of the Chernobyl nuclear facility.
What’s next for Ukraine’s natural resources
The fate of Ukraine’s mineral riches will largely depend on how the conflict and post-conflict processes unfold.
But their existence has already proven to be of strategic importance in the war — first, to Russia, and now to the U.S. as well.
Ukraine’s natural wealth and how it features in current conversations about the future of the conflict reminds us about the central role resource politics can play in shaping war and peace.