Why there is no reason to panic about minerals deal with US

The fact that the topic of rare earth metals in Ukraine did not previously spark much interest is telling. For this, we can thank Trump – finally, people have realized that we have more than just black soil.

Remember how, for all 30 years of independence, there was a political struggle for the right to private land ownership? Now we are discovering another valuable resource – minerals.

This is already a positive signal: we have finally noticed what we walk on and what wealth we possess. But I would like to consider the issue more broadly.

We live in an extraordinarily interesting period of global economic history, witnessing the end of the oil economy era and the beginning of the rare earth metals era. Summarizing, we can identify three major stages of development.

In the late 18th and throughout the 19th century, the economy of iron and coal dominated. The power of states was measured by the volumes of coal mining and steel production, as these materials were the foundation of industry: bridges, mechanisms, cars, and tanks were made from them. This period lasted until the early 20th century.

After World War I, the oil industry began to develop rapidly. From the 1940s to the 1950s, the era of the oil economy began, reaching its peak at the end of the 20th and the beginning of the 21st century. But now we are witnessing its decline. Energy-saving technologies, alternative energy sources, new materials – plastics, polymers, and green energy – are replacing oil.

In the modern world, oil, which dominated for about 70 years, is giving way to rare earth metals. Why? Because they are the foundation of the new economy – microchips, electronics, and the electric vehicle industry. Modern lithium batteries are impossible without them. Interestingly, Ukraine finds itself at the center of this process, fitting into the global trend.

What does this mean for us? Firstly, a potentially important deal with the U.S. However, it should be considered not only in the context of minerals. We do not know all the details of the negotiations, but from what is available in open sources, it is clear that the deal has a much broader scope.

Statements about rare earth metals are undoubtedly a political move by Trump before the elections. He aims to show his voters that he keeps his promises: not giving away money uncontrollably but working with guarantees. This is the logic of American politics, and Ukraine plays the role of an important partner in this process.

Various figures are mentioned – initially $500 billion, now $300 billion or $100 billion, but these are details. What is important is the creation of a special fund that will control the funds allocated for the reconstruction of Ukraine. This topic is not yet sufficiently covered in the public space, but from open sources, it can be assumed that the money obtained from the extraction of rare earth metals will go directly to the reconstruction of the country.

And not only American investments – funds from European, Arab, and Chinese companies may also come in.

This agreement outlines the mechanism by which the restoration of the Ukrainian economy will be carried out, how financing will be conducted, through which structures, and how control will be exercised. After all, the key problem that worries the West is the level of corruption.

Unfortunately, corruption scandals have not disappeared, even during the war. Because of this, neither the U.S. nor Europe will provide us with funds directly – they will pass through international funds under strict supervision.

Therefore, the creation of a fund that will control both the extraction of rare earth metals and the expenditures on reconstruction is a strategically important step. This is not just an economic issue but also a matter of control.

According to preliminary data, 50% of the fund's shares will belong to Ukraine, and 50% to international partners. This could be the optimal option, as we understand all the risks associated with possible abuses. And without international control, no financial assistance will be provided.

Thus, the situation does not look apocalyptic. Unfortunately, panic statements gain popularity in the media because the scarier the forecast, the more it is cited. But if we assess the situation soberly, there is no catastrophe here.

Firstly, there is still no official data on the actual reserves of rare earth metals in Ukraine. Moreover, throughout the years of independence, there have been statements that we have enough gas for domestic needs, but until 2014, it was actively imported from Russia because it was beneficial for certain political groups.

Secondly, the State Commission on Mineral Resources has not published any official information about the scale of the deposits. Finding a deposit is only the first step, and it may take several years before industrial exploitation begins. Technologies, environmental issues, and personnel potential are required.

It's not like the agreement was signed on February 28, and on March 1, the Americans came and started drilling.

Finally, back in 2019, Ukraine signed a memorandum with the European Commission regarding the extraction of similar metals. Almost nothing has been heard about its implementation for six years. The same could happen with the current agreement.

In conclusion: this agreement has more political than economic significance, and its actual implementation remains in question. Therefore, there is no reason for panic.