Why Ukraine’s resource riches might not be the windfall expected The Spectator explains

In an article for The Spectator, Owen Matthews, an expert on Russia, examines the proposed deal between the US and Ukraine, in which US investors are set to gain access to Ukraine's mineral wealth. 

Matthews explains that despite the rhetoric surrounding Ukraine's mineral riches, the country’s resources have been significantly overstated by both the US and Ukrainian officials.

US President Donald Trump and Ukrainian President Volodymyr Zelenskyy are expected to sign a revised accord that would provide US investors with a stake in Ukraine's mineral resources. The controversial $500 billion demand from the US for revenue from these resources to offset military aid has reportedly been removed from the deal.

However, Matthews points out that while Ukraine possesses valuable minerals like titanium, lithium, uranium, and cobalt, the country faces significant challenges. Most of these resources are either underdeveloped or poorly exploited. For example, Ukraine has large reserves of lithium but no active lithium mines, and its graphite mine, the only one in the country, ceased operations in 2023. Furthermore, Ukraine is already facing an oversupply of certain minerals in the global market, such as lithium and titanium, which further limits its economic potential.

Another issue highlighted is the conflict over control of some of Ukraine’s most valuable resources, which are situated in regions partially occupied by Russian forces. The mineral deposits in these contested areas, such as lithium in Zaporizhia and natural gas and coal reserves in Donetsk, complicate any efforts to tap into Ukraine's resource wealth.

The article also critiques the inflated claims surrounding Ukraine’s mineral potential, particularly the $2 to $7 trillion valuation, which is based on the assumption that mineral ore in the ground can quickly translate into marketable commodities. Matthews suggests that while Ukraine’s resources may have long-term value, the reality is that it will require extensive investments in infrastructure, mining, and refining to turn these minerals into revenue.

Finally, Matthews addresses the broader geopolitical implications of the deal, including the US’s commitment to supporting Ukraine's sovereignty and economic development, and how the investment could reduce Ukraine’s dependence on Western aid in the future. Despite the optimistic outlook, Matthews concludes that extracting value from Ukraine’s mineral wealth will be a long, difficult, and expensive process, and the promise of immediate financial returns is largely unrealistic.

By Tamilla Hasanova