Critical Minerals and Global Power

This week one topic has dominated discussions on global affairs: the mineral agreement between the U.S. and Ukraine. Friday's meeting between Volodymyr Zelensky and Donald Trump escalated into a heated exchange, with journalists around the world witnessing a rare political spectacle at the White House. The meeting was intended to secure a deal on critical minerals but turned into a heated argument, and the agreement was never signed. The result is a deal that, for now, remains on hold. 

But what was this mineral agreement really about? Without delving too deep into the political storm, we will take a closer look at what's in the ground and why these resources matter. 

Ukraine has vast mineral resources, with an estimated 5% of the world's critical raw materials within its borders. Among these are deposits of copper, cobalt, manganese, and rare earth elements. We focus on our favorites: cobber and lithium.
The country holds about one-third of Europe's lithium reserves and approximately 3% of the world's total reserves. Yet, there is currently no active lithium mining. Establishing new mines is expensive and time-consuming, often taking years before investments start to pay off. Copper reserves are also substantial, with an estimated 30 million tons of copper ore. 
Before Russia's invasion in 2022, mining operations covered around 15% of the country's mineral-rich areas. However, extraction has remained limited due to a lack of investments. 

Geopolitics Returns

To understand the mineral agreement between the U.S. and Ukraine, we must take a broader look at the geopolitical reality we are facing. The world is entering a technological paradigm shift where access to critical minerals is not just an advantage but a necessity for maintaining economic leadership. Right now, China holds the upper hand.

For years, China has built its position as the world's leading player in the extraction and export of rare minerals. Meanwhile, the West has retreated from mining, viewing it as an industry of the past and leaving resource access to market forces. Free trade and globalization have been the guiding principles, but in a world where geopolitics is making a comeback, this strategy is starting to show cracks. 

The U.S. and Europe are now waking up to the reality of their own vulnerability. Critical minerals are essential for the technology of the future, from electric vehicles to energy storage and advanced defense systems. Yet China controls large parts of the supply chain. This is trouble for the U.S., which relies on the minerals for its tech companies. Right now, they are dependent on China. And that's not where they want to be. 

It will be interesting to see if the U.S. and Ukraine eventually reach an agreement and what impact it might have on the global mineral market in the future. For now, the situation remains unresolved.