The United States and Ukraine finally signed on April 30 the minerals deal that was delayed by the now-infamous Oval Office exchange between the U.S. and Ukrainian presidents two months ago.

With China continuing to tighten its grip on critical minerals after the imposition of U.S. tariffs, control of so-called rare earths—essential for the production of many new technologies such as electric vehicles, wind turbines, and smartphones—is becoming ever more important.

Here is what we know about rare earths—and what might be in the ground in Ukraine.

1. Rare Earths, Not so Rare

Kyiv claims that its untapped mineral wealth is potentially worth priceless amounts of dollars.

Rare earth elements, a group of 17 essential elements, play a key role in powering modern technology, from electric vehicle motors to missile guidance systems.

While materials such as dysprosium, samarium, and praseodymium are called “rare,” they are not in fact rare in the Earth’s crust and can be found in many places.

Rare earth elements are found in low concentrations in minerals, but they are difficult to separate from other elements, needing specialist or even toxic extraction processes. Some of these processes are unavailable to the West due to China’s grip on rare earth element technology.

As China overtook the United States to become the largest rare earth element-producing and exporting country in the 1990s, the Ukrainian president offered the United States access to what he claims are Europe’s largest reserves of the critical minerals titanium and uranium.

But there is one caveat. About 20 percent of Ukraine’s mineral resources, including about half its rare earth elements deposits, are in areas under Russian occupation.

While titanium deposits have been marked in northwestern Ukraine, far from the fighting, Russia knows exactly where Ukraine’s critical resources are because of Soviet-era geological surveys.

2. What’s in the Ground in Ukraine?

Authorities in Ukraine say it has minerals. However, there has not been any commercial exploration there.

In a Critical Minerals Portfolio document from the Ukrainian Geological Survey, authorities said that rare earth elements have been identified in complex deposits and ore occurrences within the Ukrainian Shield, a large geological formation in Ukraine.

The document said that six deposits account for tantalum, niobium, and beryllium, which are prized in the aerospace industry.

It also said that while lithium is not mined in Ukraine, its reserves account for about one-third of proven reserves in Europe and approximately 3 percent of global deposits.

3. Discoveries Different From Deposits

In the mining industry, mining discoveries are new finds of minerals, while deposits are known locations with enough minerals to possibly mine.

Jack Lifton, co-founder of Technology Metals Research, told The Epoch Times he is skeptical about Ukraine’s potential as a practical source of rare earth elements.

The United States imported around $170 million worth of rare earth elements last year, mostly contained in components from China and Japan, according to the U.S. Geological Survey.

“So that’s the finished goods,” Lifton said.

He said water and access are required to build a mine, which is difficult at the best of times, let alone in war-torn Ukraine.

“To dig a hole in the ground is very expensive,” Lifton said, noting that it costs around half a billion dollars to build a mine.

“We have discoveries all over the place, but very few of them ever make it to the status of deposit,” Lifton said.

4. Mining in a War Zone

Mines can take several decades to proceed from discovery to production.

In a recent article, Javier Blas, Bloomberg opinion columnist covering energy and commodities, noted that the U.S. Geological Survey doesn’t list Ukraine as holding any reserves—meaning resources that have been discovered and are economically recoverable.

He went further to say that, at best, the value of all the world’s rare earth production rounds to $15 billion a year. So even if Ukraine had gigantic deposits, they wouldn’t be that valuable in geo-economic terms.

“Say that Ukraine was able, as if by magic, to produce 20 percent of the world’s rare earths. That would equal about $3 billion annually. To reach the $500 billion mooted by Trump, the U.S. would need to secure 150-plus years of Ukrainian output,” Blas said.

According to a Feb. 13 report by rating agency S&P’s global commodity insights team, Ukraine is “relying on a Soviet-era assessment of difficult-to-access rare earths deposits.”

“Some are stuck behind battle lines or, in the case of the geological record for one of the sites, require advanced processing technology and a stable energy grid to extract,” the report said. It said the valuation of the deposits is based on “decades-old data.”

“No sources contacted by Commodity Insights were aware of any commercial exploration or assessment of those deposits in the post-Soviet period.”

Morgan Bazilian, director of the Payne Institute for Public Policy at the Colorado School of Mines, told S&P he was “not aware of any significant rare earth assets or reserves in Ukraine.”

“This is just another breathless fantasy that we will magically solve our critical mineral constraints through a country at war,” he said. “The closest analogy for me is the very similar hyperbole about the trillions of dollars of minerals sitting under Afghanistan.”

5. US Has Rare Earths

The U.S has the capacity to mine and process rare earth elements.

However, efforts to return rare earth and battery element production to the United States have been unsuccessful in recent years due to low labor costs in foreign countries and the significant environmental impact that mining operations pose.

The United States has one of the two largest rare earth element mines in the world, Mountain Pass in California, the only integrated mining and processing site of its kind in North America, which produces light rare earths.

By 2022, Mountain Pass was producing 15 percent of the world’s rare earths.

Lifton said that Mountain Pass also produces some 10 or 15 percent of “all of China’s needs.”

“Now here’s the way you solve the problem for the United States; you write a law,” he said.

“The export of rare earth minerals in the United States shall be prohibited by law, and Mountain Pass suddenly becomes an American asset, not a Chinese one.”

6. China Controls Mining to Processing

Under the Chinese Communist Party (CCP), China has a near-monopoly on the global rare earths market, dominating both the mining and processing through state-controlled companies and strict export regulations.

China accounts for nearly 90 percent of global refined output and has designated rare earths as protected and strategic minerals since 1990.

The dominance has been achieved through decades of state investment, export controls, cheap labor, and low environmental standards, according to the Oxford Institute for Energy Studies.

At the processing level, China accounted for 85 percent of the global capability to transform the mined minerals into usable materials for manufacturers, according to a 2019 research by Adamas Intelligence, a consultancy firm.

China’s actual production remains a mystery, especially due to illegal mining activities, according to the nonprofit China Water Risk initiative.

In 2023, Beijing banned the export of technology to make rare earth element magnets, adding it to an existing ban on technology to extract and separate the critical materials.

The Chinese Communist Party recently announced measures to tighten state control over the sector.

7. It’s All About Extraction Technology

Rare earths must go through complex steps to be extracted.

First, they need to be mined by digging vast open pits in the ground to obtain ore, which is then crushed and moved to undergo flotation, magnetic, or electrostatic processing.

The West can process rare earth elements, but China’s advanced processing technology limits what it can do.

Heavy rare earth elements dysprosium and terbium are very rare, and are vital ingredients for the magnets used in electric vehicles.

“Dysprosiun and terbium are today 100 percent produced by companies owned or controlled by China. We do not have access to them unless the Chinese sell them to us, and they are not doing that,” said Lifton.

He has noted in an article for the Critical Minerals Institute that with the mining of these elements, no commercial production has been achieved outside China due to technical, environmental, and economic challenges. They are recovered today only from uniquely accessible “deposits” known as ionic adsorption clays.

“So the fact is, at this point in time, we cannot make the electric motors necessary for cars without Chinese imports,” he said.

But he said that the United States should look more to Brazil than Ukraine.

“There’s a dozen new companies in Brazil looking at recovering rare earths ionic clays, but none of them is in production,” he said.

“All the magnet earth can be produced in Brazil.”

China has partially shifted extraction activities to neighboring Burma, also known as Myanmar, where oversight is weaker, though the country is politically turbulent.

Last year, an armed group fighting the country’s ruling military, the Kachin Independence Army (KIA), said it had taken control of a mining hub that is a major supplier of rare earth element oxides to China.

According to broker Ord Minnett, in 2023, Burma supplied China with about 50,000 metric tons of rare earth elements oxides from ion-adsorption clays, eclipsing China’s domestic ion-adsorption clay mining quota of 19,000 tons and making it the world’s top exporter of heavy rare earth elements oxides.

8. Problem of Pollution

Large-scale mining can cause serious environmental pollution.

Some of the ways rare earth elements are extracted via open-pit mining and hydrometallurgical processing can produce toxic waste that pollutes the soil, water, and atmosphere.

In Bayan Obo, China, an industrial mining town and home to the world’s largest rare earth element mine, severe and bleak pollution from operations has affected the Yellow River and local communities.

According to an investigation in Nuclear Engineering and Technology, published in Science Direct, thorium is a byproduct of rare earth element production, meaning it is extracted from the same mineral deposits. Currently considered “a nuisance” due to its radioactive nature, it is treated as waste at mines.

In Malaysia, where it is mined, rare earth element activities produce nearly 500,000 tons of radioactive waste containing high thorium concentrations, which is a “significant burden” to the country, the investigation noted.

Reuters contributed to this report.