Op-Ed: Unpacking Ukraine’s “trillion dollar” rare earths myth

(The opinions expressed here are solely of the author, Amanda Marziliano van Dyke) Mark Twain reputedly defined a mine as a hole in the ground with a liar on top. The “Value in the Ground” myth has been around the mining industry for a very long time, and it is repeated whenever disreputable hucksters try to sell overpriced dirt.  When the value in the ground is ultimately proven to be a lie, people trust the mining industry less, rather than the people who were peddling the lie trying to make a buck.  Catherine Philp penned an article titled “Ukraine rejects Trump’s call to give up its rare earth minerals” in The Times on Sunday. Among the many misrepresentations in that article is “Ukraine’s vast steppe hides precious mineral reserves valued at several trillion dollars, from the most highly prized rare earths to the more common titanium and graphite used in modern consumer goods.”  Let me unpack the multiple lies hidden in this one sentence, and explain why they are so dangerous.  Reserves are what you get when you have proven with drilling and an independent audit both what your geological resource in the ground is, and when you have a proven economically viable plan to extract them.  The best authority in the world on resources and reserves is the US Geological Survey (USGS). Ukraine does not have resources (the scientifically confirmed presence of minerals) or reserves (resources that are economically extractable).  To my knowledge, and the knowledge of everyone in the mining industry I have asked, there are no economically relevant large scale drilled out resources or reserves in Ukraine of rare earths, graphite, or titanium.  What they have are old Soviet survey’s that indicate the presence of trace amounts rare earth minerals, and a general line that says the entire region could contain rare earth minerals.  What they have in mining terms is exploration targets. 1/1000 exploration targets ever becomes a mine. To get reserves, which are the only thing that can be valued, 100’s of millions in drilling investment is required. Which is why in economic terms the value of Ukraine’s economic potential is negative right now, it requires highly speculative risky investment to ever be realised.  My understanding is that last November the Ukrainian government, desperate to maintain support found those old soviet surveys and claimed those exploration targets were reserves, did some very bad math, and ascribed a ludicrous value to them.  So the question is, is it possible Ukraine has trillions of dollars of rare earths? It is highly unlikely. Let me show you why.  The Times author is asserting that the value of these minerals in the Ukraine is greater than the entire value of all the mined ore in the world, which in 2024, was a little over than 2 trillion dollars (statista), and 50% of that was coal.  In 2024 the world mined 280,000 tonnes of natural graphite worth approximately $280 million, 9.4m tonnes of titanium mineral concentrate worth approximately 3B, and 390k tonnes of rare earth concentrate worth approximately 15-19.5B, which makes the approximate extracted value of all of them combined,  circa 20B dollars, and approximately 1% of the entire value of mineral extracted value in the world.   Which makes the idea that Ukraine even could contain “several” trillions of dollars worth of these minerals preposterous. Realistically, if they did in fact at some point prove up 1,000 times the annual production of rare earth minerals in one spot, that are economically extractable, they would crash the price of rare earth minerals forevermore. (source: USGS and World Mining Data 2024).   By attributing such ludicrous value to exploration targets and resources, all this journalist and Ukraine have done is ensure that nobody will ever invest the money into developing those resources.   When you anchor the idea of “trillions” of dollars, both the government and the people in the area believe they have something they don’t, and no matter how many people explain to them that it was a lie to begin with they will always have this false idea in their head of a value that is completely unachievable, and will never come to a reasonable arrangement with investors to develop whatever assets those people might have.  All they have done is created a delusional fantasy of value that doesn’t exist and ensured that the sustainable economic development of the mining industry of the region they are in never happens.  If in fact the lie there are trillions of dollars worth of rare earth minerals in Ukraine prevails, (and the thousands of hits “trillions” in rare earth minerals in Ukraine has is mind boggling), money will be invested, and lost. And the loser will be the mining industry because it will be blamed.   It is within the interests of every mining industry executive who has any kind of access to the US administration to tell the truth about what has happened here before this goes any further.  This has happened before, the Pentagon suggested there were trillions of dollars in lithium in Afghanistan, which has never been realized.  It’s a cautionary tale one we would be wise to consider.  Weiter zum vollständigen Artikel bei Mining.com Weiter zum vollständigen Artikel bei Mining.com