There is not much, on the surface, to distinguish the area around Novopoltavske from most other corners of eastern Ukraine. Just another set of long, thin fields amid the vast expanse of steppe that stretches off into the horizon.
But beneath the fields here is what some have described as a mineral motherlode: a rich resource of phosphate rock and other ores that could completely change the calculus for this country — and for the world. That, at least, is the pitch senior Ukrainians have been selling American policymakers in recent months.
In a series of slide decks widely shared among politicians and investors, they describe Novopoltavske as a trove of “rare earths” — “one of the largest [deposits] in the world, containing proven reserves of phosphate ores, and co-products of rare earth elements, tantalum, niobium, strontium, magnetite.”
The sales pitch was seemingly so seductive that it became the focal point of Donald Trump’s negotiations over a potential peace deal in Ukraine. Rare earths, Trump insisted in a series of interviews, would help make both Ukraine and (more importantly from his perspective) America untold riches in the coming years. They would be at the heart of the deal that would repay America for its $175 billion of support to Ukraine.
It was this rare earths deal that was abruptly cancelled after the disastrous Trump-Vance-Zelensky showdown in the Oval Office last Friday. And it is this deal that is now seemingly back on the table, with Zelensky extending an olive branch in the form of a letter. “If you want real security guarantees,” said vice-president JD Vance last week. “If you want to actually ensure that Vladimir Putin does not invade Ukraine again, the very best security guarantee is to give America an economic upside in the future of Ukraine.”
Given the apparently pivotal nature of this deal, it’s worth spending a moment pondering the fields of Novopoltavske, to get a sense of what the minerals deal, if it does go ahead, might actually mean in practice.
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Often cited portentously in discussions of global affairs, “rare earths” are among the most mysterious and misunderstood of all mineral classes. A set of 17 elements you find in their own special section of the periodic table, they are certainly quite important. Think of them as a sort of mineral condiment: sprinkled into steel, yttrium can produce far tougher, more resilient alloys. Sprinkled into iron and boron, neodymium can make far more powerful magnets. If you have a set of Apple AirPods (or, for that matter, any earbuds), the tiny speakers inside them are functioning thanks to neodymium magnets. That satisfying click when you close the case? Neodymium again.
Surprising as this will probably sound, given the mystique around them, the world would not grind to a halt if we suddenly ran out of rare earth metals. Wind turbines and electric cars would be less efficient (since they often use those neodymium magnets). We’d be back to wearing big, chunky earphones again, and it would certainly be a big problem for the military — which depends on being able to get the strongest, lightest metals and the fastest jet engines.
But anyway, we’re not going to run out of rare earths because, contrary to what the name suggests, they’re not particularly rare. Dig a chunk of earth out of the ground in your garden and there’s a decent chance it contains some, if not all, of the rare earth elements.
The real challenge with rare earths is not so much finding them in the ground, but refining them. It’s a hard, pollutive, energy-intensive process, occasionally involving the production of radioactive waste.
For obvious reasons, no one much wants to live near a rare earth processing plant, so most developed countries shut down their refineries long ago, leaving it instead to countries with fewer qualms about that sort of thing. All of which helps to explain why China has a near monopoly on rare earth refining: around 90 per cent of the global supply.
That brings us back to President Trump. If Ukraine is sitting on the motherlode of rare earths, then might that change the global balance, meaning the US could wrest back control of this supply chain from its geopolitical rival?
Novopoltavske, in other words, could be pretty important. Except there’s no clue of that on the ground. While there have been one or two efforts to get it up and running since Soviet prospectors discovered the rare earths back in 1970, for the time being it’s just fields of wheat and barley. There are no mines, no tunnels, no refinery, no nothing.
Why has this site, supposedly one of the world’s biggest rare earth deposits, been left to languish? The clue is there in the small print of the slide deck handed around by Ukrainian politicians: “Hydrogeological and mining conditions of the field are relatively difficult.” This is a euphemism for: getting any value out of this place will likely be prohibitively expensive. And that’s before you’ve even factored in that the ores would probably have to be shipped off somewhere else for processing.
Bluntly, the jewel in the crown of the Ukrainian minerals deal is a forgotten field with minerals that might never be profitably extracted.
But that’s not even the most important bit. What you really need to know about Novopoltavske is that this field and the minerals beneath it are in territory currently occupied by Russian troops.
Novopoltavske is not the only mine site touted by Ukraine as a part of their geological deal. The country also has large deposits of titanium and uranium in its central belt, which have been exploited for decades. There is an old alumina plant co-opted from Russia (also near the border). There are a set of lithium resources which might constitute Europe’s single biggest deposit, though they are relatively small by global standards. We don’t know for sure because, for rather obvious reasons, few mining companies want to invest in Ukraine right now. As with Novopoltavske, the best we have to go on right now are half-century-old Soviet geological records.
With its proposed Ukraine deal, the US appears to be taking a leaf out of China’s book. Beijing has for years traded aid and infrastructure for investments in mining companies, especially in African nations like the Democratic Republic of Congo. Developing nations got Chinese highways and railways and China, in return, secured the cobalt and manganese it needed for all those electric cars and solar panels it is manufacturing.
But China is not the only country promising to build the future. If the US and other nations are going to deliver all the infrastructure we need in coming years for green technology or AI data centres, they will require enormous quantities of battery minerals, not to mention old-fashioned stuff like copper, iron and sand. These have to come from somewhere — be it Ukraine or Greenland or, for that matter, America itself.
Right now most of the world’s easily accessible lithium is to be found in South America and Australia. The vast majority of the cobalt is in the DRC. Much of the nickel is in Indonesia. These are the mineral superpowers of the future, all of which means that when Rwandan soldiers seize crucial trading posts in the DRC, that matters for all of us. It helps explain why there is so much mystique about the resources under the ground in Greenland and Ukraine.
Which means that critical minerals more broadly — and here we’re talking not just about rare earths but the lithium, graphite and cobalt we need for our batteries or the silicon we need for our smartphones and solar panels — are the great new pursuit in geopolitics. In much the same way the 20th century was defined by where the oil reserves were, the 21st century will revolve around this very different suite of metals and chemicals. The map is being redrawn.
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The problem is, for the most part, the reason we’re not already mining much from these new prospects is that there’s more easily obtainable stuff elsewhere already. Greenland’s minerals will not be a game-changer.
With a bit of luck and a lot of time (it takes well over a decade to build a mine), there is a chance Ukrainian rare earths, lithium and other minerals may contribute to this race. There is a chance the reconstruction investment fund created in this putative deal might generate a decent amount of revenue. There is a chance it ties America into an economic relationship with areas such as Novopoltavske, the borderlands Russia would very much like for itself.
Then again, there’s also a chance that, before long, someone in the White House starts to feel buyer’s remorse.
Ed Conway is the economics editor of Sky News and author of Material World
