Is there really $500bn of Rare Earths in Ukraine?
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As part of the fast-moving argument over US military support to Ukraine, the US demanded $500 billion worth of access to what was variously reported as Ukraine's rare earths, or rare metals, or rare minerals. That might all sound like the same thing, but in fact, the rare earths are a very specific group of elements.

That was geeky songstress Helen Arney listing all 17 rare earths with apologies to the great Tom Lehrer.

So, those are the 17 rare earths. And they're used a lot within traditional industries such as glassmaking and ceramics, or for making catalysts. They're also used to make very powerful magnets, which go into electric vehicles and into offshore wind turbines. But what about the $500 billion? I spoke to Eli Saklitvala, head of non-ferrous metal pricing at Argus Media, a global commodity price reporting agency.

I started by asking her, are rare earths rare? They are famously not rare. Well, the rare earths, those 17 elements that we refer to, they are not technically rare.

They are quite abundant in the Earth's crust. I love the fact that you say they're famously not rare. Yes. For Argus, maybe it's famous that they're not rare. I'm not sure most of us realise they're not rare. OK, so go on. That's fair. I'd say within the metals world, it's a bit of an in-joke that rare earths are not really rare. So you can find rare earth deposits in various parts of the world, across various different continents. They become rare when we actually think about access to them. It's one thing to have...

any type of mineral in the ground, it's quite another to be able to extract it, utilize it, process it, etc. So rare earths, those 17 elements, are amongst the hardest minerals to extract and process and plug into a meaningful supply chain.

You've got huge variation in terms of the mineralogy. You've often got radioactive elements sitting in there in the mix, like uranium and thorium. Very difficult to separate rare earth elements from the other materials that surround them in these deposits. So it's a very difficult set of minerals to extract, therefore very difficult actually to develop new supply chains. Hence, we're still hugely reliant on China to access supply.

And because China now has such dominance over both supply and consumption, that also means China has huge influence over rare earth prices. So if you're a project developer outside China, you run the risk of spending well over a billion dollars, probably more than a decade just to get a new rare earth project up and running. And then you probably have very little control over the price at which you can sell your product outside.

So that becomes a huge red flag to investors and has definitely contributed to the lack of progress diversifying that supply chain. So it does make sense that the US would be concerned to secure access to rare earths from somewhere other than China? Yes, absolutely. These are undoubtedly critical materials for all sorts of industries, as we've mentioned, and the US supply chain for them is

is extremely vulnerable, partly because of the geopolitical angles here, tensions between the US and China, but also just in simple logistical terms, to really only have one major source for so many critical materials, as we saw, for example, during COVID,

it carries enormous logistical risk. So the US is absolutely right to zoom in on rare earths as a vulnerable area and try to take steps to strengthen the supply options. So I wanted to get to this claim that the US wanted $500 billion worth of Ukraine's rare earths, or at least they did a few days ago. I mean, it's a fast moving story. Let's just say it's a fast moving story. But the rare earths themselves are not fast moving. So

This figure that there's $500 billion worth of rare earths in Ukraine or that the US could get a $500 billion share of rare earths in Ukraine, does that number make any sense? From my perspective, not very much. I mean, let's start with the true rare earths that are potentially in Ukraine.

There has been some mapping in the past which suggests Ukraine may have some of those 17 elements that I mentioned.

However, we would need any of that mapping to be done fresh with the most up-to-date standards. We need to understand the exact nature of any deposit, how deep are the ores, what's the mineralogy like. We need all of that sort of detail in order to put any sort of valuation on what it might be worth. You talked about this old mapping. How old are we talking about?

Well, it depends on who you speak to, but I've spoken to people who believe some of that mapping dates back to Soviet era maps.

So 1980s, 1970s. Potentially something like this. I mean, it's certainly not being done with the up-to-date processes and systems that we would expect nowadays. So we need a lot more detail on what exactly is sitting within those deposits. Only then, I think, could you draw some sensible valuations on what it could be worth once you've put in the substantial amounts of money to pull it out. And then if we think about the wider context,

In terms of, you know, what is the value, for example, of the global rare earths market right now? Well, it's very difficult to put true accurate valuations on these things. But in 2024, if you look at the different estimates that are out there, I mean, the highest estimates that I've seen are some like maybe $12.4 billion global value of the rare earths market last year.

So to imagine we're going to get $500 billion worth out of Ukraine all of a sudden, to me, that is just pie in the sky. That would be the value of the entire global market for decades. Yes, it would be an extraordinary amount if we're talking about true rare earth elements. Might there be other elements that are not, strictly speaking, rare earths, but are nevertheless valuable mineral resources? And maybe they could be responsible for the balance of the $500 billion? Yes.

Yes, I think that is most likely what's happening. I think the term rare earths is being used in quite a loose sense to really refer to this wide array of minerals that we know that Ukraine has.

I think there's a trip up here on language. I think Ukraine does have enormous potential with a wide array of minerals. We know that there are things like lithium, titanium feedstocks are famously over there, various different base metals, graphite, manganese. These are all really important, critical minerals. We need them for a lot of traditional industries, but also the green energy transition as well.

So there's potentially a huge amount of wealth sitting in the ground there, which I think is what's feeding into that $500 billion figure. Is there $500 billion worth of wealth? I mean, there might be that much down there? I don't know. I've seen some reports estimating that Ukraine's mineral resources could be worth something like $15 trillion today.

Whether or not that would actually stand up once you hold it against the reality of extracting and processing these minerals is a very different question. But yeah, potentially, there's a lot of money sitting in the ground there. I'm curious, you mentioned this number of 15 minerals.

trillion dollars. So I mean, that's a lot more than $500 billion. Is that just some number that somebody made up? Or is there some realistic basis for it? I think it's always very, very difficult to estimate the value of resources in the ground. I understand that people want to try and put some numbers on these resources, but I would take them with an enormous pinch of salt.

Thanks to Ellie Sakladvala of Argus Media. And of course, thanks also to Tom Lehrer, a proper mathematician I'll have you know, and to Helen Arney. Her geeky songs are available at helenarney.bandcamp.com. That is all we have time for, but if you have any questions or claims you'd like us to investigate, then please email moreorless at bbc.co.uk. Until next week, goodbye.

Hey, it's Rich Davis from Covino & Rich. The Toyota Tundra and Tacoma are designed to outlast and outlive, backed by Toyota's legendary reputation for reliability. So get in a Tundra with the available i-Force Max hybrid engine, delivering exceptional torque and towing capacity. Or check out a Tacoma.

with available off-road features like crawl control. It could take you back to the trails. Toyota trucks are built to last, year after year, mile after mile. So don't wait, get yours today. Visit BuyAToyota.com for deals and more. Toyota, let's go places.

Residents at Brightview Senior Living Communities enjoy enhanced possibilities, independence, and choice. Brightview Dulles Corner in Herndon and Brightview Great Falls offer vibrant senior independent living, assisted living, and memory care services through various daily programs and cultural events.

Chef-prepared meals, safety and security, transportation, resort-style amenities, and high-quality care. Everything you need is here. Discover more at brightviewseniorliving.com. Equal housing opportunity.