In Ukraine mining region, a US minerals deal raises hopes and doubts
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Howard LaFranchi Staff writer
| Zavallia, Ukraine
As he watches over the iron ore and graphite production site’s aging equipment arrayed around him, Volodymyr Moroz recalls the glory days of the now-silent Zavalivskiy Mine in central Ukraine.
“At one time you could count on getting a job at this mine,” he says. “People moved here” from other mining regions “because the pay and the schools were better.”
The former mining equipment operator and truck driver now gets by on a few hours a week as a security guard.
Why We Wrote This
A story focused onIn towns and villages across Ukraine’s minerals-rich geological formation, word of a potential U.S. deal has renewed confidence in the future. Not all approve of President Trump’s demands, but most agree that American investment would be a good thing.
The nearby town of Zavallia had 4,000 families, lots of shops, and “even a beautiful [cultural center] where something was always going on,” Mr. Moroz says.
Today’s picture is very different. The mine hasn’t seen a mechanical shovel gnawing at the earth since November. Many of Zavallia’s men have gone off to war, while families have sought refuge in other countries.
Mr. Moroz’s beloved cultural center sits abandoned.
Still, what the convivial security guard calls a “spark of hope” has energized Zavallia in the weeks since news broke of a possible deal with the United States to develop Ukraine’s largely untapped deposits of critical and rare-earth minerals.
Expectations that the deal would be sealed in late February were dashed when what was to have been a White House signing ceremony between the U.S. and Ukrainian presidents collapsed in an Oval Office confrontation over ending Russia’s war in Ukraine.
Since then cooler heads have prevailed, and the two sides issued a statement March 11 pledging to work toward a “comprehensive agreement for developing Ukraine’s critical mineral resources.”
For U.S. President Donald Trump, securing access to rare-earth minerals is a national security urgency – something that explains, in part, his obsession with acquiring Greenland, which also has a rich subsoil. The coveted minerals include lithium, titanium, cobalt, beryllium, and others required for many of the critical products of the 21st century – from electric vehicle batteries and microchips to aerospace components.
But the mineral giving Zavallia new hope in its future is graphite.
“We understand that the high-tech and space industries need graphite now,” Mr. Moroz says. “And graphite just happens to be right here in this ground,” he adds, indicating a vein of gunmetal-gray earth nearby.
Indeed, Ukraine has the world’s fifth-largest graphite deposits, and the largest of Europe.
Moreover, the Zavalivskiy Mine boasts 10 different levels of graphite quality, an attribute that mine director Ihor Semko says should make the site attractive to American investors.
“We’ve been able to reach 99.9% pure graphite in our lab,” he says. “With so much of the world converting to electric vehicles and all the research into new metals for aerospace,” he adds, “I think we have something here to draw a lot of interest.”
That sentiment is not unique to Zavallia.
In towns and villages across the Ukrainian Shield, the minerals-rich geological formation traversing the country’s central and eastern regions, word of the potential U.S.-Ukraine minerals deal has had a similar impact.
America’s good and bad sides
Not everyone approves of President Trump’s demand that Ukraine use its mineral wealth to pay back the U.S. for past military and economic assistance. But most seem to agree that securing American investment would be a good thing.
“Trump’s idea that Ukraine should just turn over its natural resources shows us the bad side of America, the side that only cares about money and not the average people,” says Halyna Velychko, a flower vendor in Novomyrhorod, a town in Ukraine’s untapped “lithium belt.”
“But I think most Americans are good people,” she adds, “so I believe there’s another side of America that would favor a deal that benefits both countries.”
Others in the town that boasts a nearby titanium mine express interest in the idea of a deal, but remain doubtful Ukraine would come out of it a winner.
“Of course we need the investment, that would be a good thing,” says Viacheslav, who sells small plants and flowers on the street to augment what he describes as a meager pension, and asked for his last name to be withheld. “But I don’t trust [President Volodymyr] Zelenskyy to be able to negotiate a deal that benefits Ukraine,” he says.
“Plus, I worry that anything good that could come from it would be lost in a lot of corruption.”
The China factor
President Trump’s interest in Ukraine’s mineral wealth can almost be reduced to one word: China. China possesses the largest known reserves of critical and rare-earth minerals, about double those of the next largest holder, Vietnam. The U.S. is fifth on the global list.
What minerals China does not have in its own subsoil – or has insufficient amounts of – it has moved to monopolize globally. South America’s lithium is one example.
As a result, China owns the world’s minerals supply chain – a dominance Mr. Trump seeks to break.
Take again the example of graphite, a key ingredient in lithium-ion batteries: The U.S. imports more than 40% of its graphite from China, which produces more than three-fourths of the world’s supply.
“There is no question there is an intense global competition going on, with the major players looking around for the places they could go to extract these essential minerals,” says Andrii Loktev, a geological resources consultant and former director of the Ukrainian State Geological Survey Institute.
He calls China “the dominant player.”
“That’s one reason Ukraine’s mostly untapped deposits of these minerals are of interest to major players like the U.S.”
Another of these metals of interest is titanium, which is already in production in Ukraine and is in high demand by the world’s growing aerospace industry.
“What people here say is that if the U.S. is interested in our titanium, it’s because it is critical for Elon Musk,” says Volodymyr Landa, senior economist and critical minerals expert at the Center for Economic Strategy in Kyiv. The quip, he says, is an allusion to Musk-owned SpaceX.
Yet while the war is the key reason many foreign companies have not already jumped into Ukraine, other reasons are not lacking.
The Ukrainian government claims it is developing a list of more than 100 sites where critical and rare-earth minerals could be developed. But experts note that much of the official data has not been updated since the Soviet era – before independence in 1991.
A discouraging development for Ukraine is that as much as one-third of its critical mineral deposits in the east have fallen under Russian control, Mr. Loktev notes.
Potential hurdles
The accessibility of desirable deposits is unclear, a factor that can determine the time required between site preparation and actual production. Ukraine’s notorious bureaucracy, while modernizing, could still hamper foreign investments, as could a system of corruption that some experts caution has defied efforts to stamp it out.
Then there is the neglected infrastructure, including roads, that has deteriorated as the country has focused on fighting off an invasion and repairing the damage from relentless attacks on its energy infrastructure. (This reporter can attest to the jarring state of the one road leading to a titanium mine in central Ukraine.)
Still, most experts concur that a significant U.S.-Ukraine minerals deal can be reached. The key, Mr. Landa says, is that it be “a win-win” for the two countries, and that it be long term.
One potential stumbling block could be President Zelenskyy’s insistence that any deal include serious security guarantees for his country. The U.S. response has been that just having American companies on the ground should be guarantee enough against further Russian aggression.
President Trump made a similar argument Wednesday regarding Ukraine’s energy sector.
Not everyone finds that argument convincing.
“If Trump is going to invest in Ukraine, I suppose that could discourage Russia from attacking us, at least in the sites where that American investment is occurring and Americans are on the ground,” says Mr. Semko of Zavalivskiy graphite mine.
“But we’re a big country,” he adds, “so I don’t think American investment here and there is going to provide security for all of Ukraine.”
Oleksandr Naselenko supported reporting for this story.
