US concerns over minerals deal with Ukraine leading to potential losses

The implementation of a minerals deal between the US and Ukraine would require multi-billion dollar investments and could result in losses for US companies, according to the Washington Post, Report informs via TASS.

The full extent of what lies below ground in Ukraine is not totally clear, and the work of mining and processing minerals is slow, messy and can require vast new infrastructure, with uncertain costs. In many cases, that means deposits are not economically viable to exploit.

Extracting many of the critical minerals the United States seeks would “require billions in investment,” said Robert Muggah, principal at SecDev, a geopolitical and digital risk company that has studied Ukraine’s resources.

“The big problem is that to develop a new mine might take 10 years” or more, said Willy Shih, a Harvard economist who studies supply chains. “Is anyone going to do that in a Ukraine that doesn’t have security guarantees? In other words, how investable is it really?”

The experts note that the US Geological Survey has not recorded large amounts of rare earth elements in Ukraine. Moreover, more than 70% of the studied deposits are located in Donbass and Novorossiya.

“Ukraine has significant mineral potential, but how large that potential is, we simply don’t know,” said Rod Eggert, deputy director of the Critical Materials Innovation Hub at the Colorado School of Mines.

All experts who participated in the publication's survey are skeptical about the economic feasibility of implementing the agreement between the US and Ukraine.

The agreement on minerals, expected to be signed by Ukrainian President Volodymyr Zelenskuy and US President Donald Trump at the White House on February 28, consists of 11 points. The document will cover hydrocarbons, oil, gas, mineral deposits, infrastructure, ports, and state-owned enterprises.