Rare Earths Reality Check: Ukraine Doesn't Have Minable Deposits

When a seemingly routine Oval Office press conference degenerated into a shouting match on 28 February, the world looked on in astonishment. That is, except for actual experts in rare earths and other critical materials, who understood all along that the proposed “deal” that motivated the press conference was nonsensical and could only be viewed as political theater.

The meeting was supposed to announce an agreement under which Ukraine would provide U.S. companies with access to critical minerals deposits in exchange for the tens of billions of dollars in military aid already provided by the U.S. government. According to the Center for Strategic and International Studies, the agreement would have established “a reconstruction investment fund with joint U.S. and Ukraine ownership. Ukraine will contribute 50 percent of all revenues earned from the future monetization of all Ukrainian government-owned natural resource assets into the fund.” Ukraine has substantial reserves or deposits of lithium, graphite, manganese, titanium, gallium, and nickel. However, in describing the proposed deal, Trump and other principals quickly zeroed in on the rare earths, for which the US has for years been spending billions of dollars in an attempt to secure stable supplies.

The Trump administration, like those before it, seems to grasp the importance of these materials. At his confirmation hearing, Secretary of State Marco Rubio said, “If we stay on the road we’re on right now, in less than 10 years, virtually everything that matters to us in life will depend on whether China will allow us to have it or not … They have come to dominate the critical-mineral industry supplies throughout the world.”

The Ukraine rare-earths deal now seems endangered, to put it mildly. But its apparent failure—and the way it failed—is revealing of how the Trump administration is likely to pursue supplies of strategically vital rare earths and other critical materials in the context of trade and international policies that are freezing out not just China but also longtime economic and military allies, while welcoming a longstanding adversary, Russia. China dominates production of numerous critical metals and minerals, but none so completely as the rare earths. More than 95 percent of industrially useful rare-earth metals are produced by China, creating supply-chain and national-security vulnerabilities that the U.S. and other countries have been attempting to ameliorate for more than a decade.

Ukraine Doesn’t Actually Have Minable Rare Earths

To begin with, the contentious 28 February Oval Office meeting can’t be understood without a crucial piece of context: there are no deposits of rare-earth ore in Ukraine known to be minable in an economically viable way. And that would be true even if full-scale warfare were not raging in the country’s east, where a great deal of its mineral resources are concentrated.

Ukraine is believed to have four areas with substantial deposits of rare earth ores, according to Erik Jonsson, senior geologist with the Geological Survey of Sweden. “There are four slightly bigger deposits: Yastrubetske, Novopoltavske, Azovske, and Mazurivske. All but one of them seem to be now within or near the zone that the Russians control, as far as I can tell,” says Jonsson. “And when it comes to resources in those deposits, I mean, we have numbers; yes, that’s nice. But we have no real, detailed, outline of how those numbers were arrived at.” The numbers are believed to come from Soviet surveys dating as far back as the 1960s.

“The rare-earth deposits don’t look that relevant,” Jonsson concludes. “I mean, I wouldn’t go for them.” Two of the deposits are dominated by a mineral called britholite, he notes, which is not desirable because it has not been processed for rare earths, which means that almost nothing exists in the way of process chemistry and equipment.

Rare-earth compounds take on a variety of colors, as shown with these oxides of (clockwise from top center): praseodymium, cerium, lanthanum, neodymium, samarium and gadolinium.Peggy Greb

“If you want critical minerals, Ukraine ain’t the place to look for them,” declares Jack Lifton, executive chairman of the Critical Minerals Institute. “It’s a fantasy. There’s no point to any of this. There’s some other agenda going on here. I can’t believe that anybody in Washington actually believes that it makes sense to get rare earths in Ukraine.”

Even without a war to contend with, it would take at least 15 years to build a mine to begin extracting rare-earth ore on a large scale, Lifton notes. And according to the terms of the draft critical materials deal, private companies would have to invest huge sums, likely a billion dollars or more, to develop rare-earths mines in Ukraine. It’s a possibility that Lifton, an IEEE member and former metals trader, dismisses as absurd. He notes that a multinational mining company, Rio Tinto Group, has spent close to US $3 billion on potential mine sites in Arizona and Alaska and still does not have the necessary licenses and permits from the U.S. Government to begin building a mine in either place.

What is Trump’s rare-earth agenda?

The proposed U.S.-Ukraine critical minerals deal was so unmoored from the realities of the mining industry that it has some observers wondering what was actually behind it. (The White House press office did not respond to IEEE Spectrum’s messages seeking comment on its rare earths strategy.) One theory was that Trump, ignorant of the details of rare earth mining, was simply approaching the situation as a businessman might, looking for a favorable deal. “I doubt very much that President Trump cares about rare earths,” says Lifton. “He’s being told they’re important. He’s operating as a pure businessman.”

In any case, the administration’s future strategy on rare earths is likely to deviate greatly from that of the Biden administration. Under Biden, the U.S. Department of Defense funded companies in allied countries, notably Lynas Rare Earths of Perth, Australia and Vacuumschmelze A.G. of Hanau, Germany, to begin building rare-earth and related facilities in the U.S. But such a strategy seems dubious now, in view of the Trump administration’s increasingly contentious relationships with America’s traditional allies, its “America First” ethos, and its systematic repudiation of all Biden-era initiatives.

“If you want critical minerals, Ukraine ain’t the place to look for them.” —Jack Lifton, Critical Minerals Institute

Here, some have made a connection to Trump’s repeatedly stated interest in acquiring Canada and Greenland—both of which are known to have enormous reserves of rare-earth and other critical metals and minerals. (“One way or the other,” he said of acquiring Greenland, in his address to the U.S. Congress on 4 March.) “Trump seems interested in territorial expansion,” notes Melissa Sanderson, a board member of the mining exploration company American Rare Earths and a former U.S. Foreign Service officer in the Democratic Republic of the Congo.

And, intriguingly, a couple of years ago, a major Canadian rare-earths company, Neo Performance Materials, announced that it was exploring a potential rare-earths mine site—in Greenland. But annexing Greenland wouldn’t do much to solve the United States’ rare-earths problem, because there is a reason why Greenland’s abundant natural resources have not been heavily developed. “Greenland is an exceptionally difficult area in which to mine,” says Sanderson. “Temperatures, snow, ice, etcetera. And of course, in the spring, such as it is, there are oceans of mud.”

“The initial investment would be absolutely huge because of the logistical issues,” says Jonsson. “You would basically have to start with building a complete deepwater harbor just to build the foundations of the mines.”

Under the Biden administration, Sanderson explains, “there was a whole global structure that was dictated by an understanding of, as far as the West goes, where the knowledge is, where the capability already is, where the experience already is, and who are our closest allies.” Under the current administration, that’s all being wiped away by tariffs and other factors. Noting that Neo Performance Materials, based in Canada, already operates rare-earth processing facilities, Sanderson asks, “Who in their right mind is going to have the Canadians process rare earths for them and then bring them back into the United States with an additional tariff on top of it when we’re already uncompetitive in the West?”

One of the problems with the administration, Sanderson adds, is “not understanding why there’s an international structure for the mining industry. Why there’s no one country in the West that’s doing it all.”

“The U.S. government lacks perspective on critical minerals sourcing,” adds Lifton. “Because of that lack, its acquisition policies are misguided.”

The irony isn’t lost on Sanderson that the United States, too, has substantial deposits of rare earth ore, in California, Alaska, Wyoming, Georgia, and Texas, among other places. “He [Trump] is discounting what we have within our borders.” The unanswerable question, at the moment, is why?

Reference: https://ift.tt/dFZCHrX