Would a Ukraine-US deal on rare earths provide a workaround to China’s curbs?

A US accord on critical minerals to broker an end to the Ukraine war could blunt Chinese export controls, analysts said, but not counteract them

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Ukraine’s store of rare earth materials, used in the production of hi-tech goods, could provide relief from China’s controls on mineral exports to the US. Photo: AP

Published: 5:01pm, 27 Feb 2025

Warmer relations with Russia and a deal with Moscow’s wartime rival Ukraine - which could be signed as early as Friday - might give the United States new sources of key minerals, analysts said, in turn dulling the impact of China’s rare earth export controls aimed at the US.

If US President Donald Trump brokers a deal to extract minerals from war-torn Ukraine or keeps improving ties with Russia, either country could bolster its shipments of the raw materials to American manufacturers, observers said.

That could weaken, though not completely offset, Chinese restrictions on exports of its own stores to the US. Beijing’s near-monopoly on the supply of these minerals, essential for the production of hi-tech goods, is seen as a powerful arrow in its quiver as it fights a protracted trade war with the United States.

“Trump might need Ukraine,” said Alicia Garcia-Herrero, chief Asia-Pacific economist at French investment bank Natixis in Hong Kong.

Representatives of Washington and Moscow agreed earlier this month to start working on an end to the Ukraine war, and the two sides are trying to organise a meeting between Trump and Russian President Vladimir Putin – moves that augur a major shift in US policy.

Ukraine has an estimated 500,000 tonnes of lithium in its reserves – a substance required for the manufacture of batteries – and its graphite stash represents 20 per cent of global resources, according to the US Geological Survey (USGS). The country also has a significant supply of neodymium, used to make wind turbines, and a number of metals found in TVs, lighting and lasers.