The U.S.- Ukraine Minerals Deal: How Rare Earths Are Reshaping Geopolitics

A POTENTIAL MINERALS DEAL BETWEEN THE U.S. AND UKRAINE IS STILL ON THE TABLE OUR NEXT GUEST SAYS DONALD TRUMP IS TAKING A PAGE OUT OF THE CHINESE FOREIGN-POLICY PLAYBOOK , AS WE ENTER A NEW ERA OF MINERALS DIPLOMACY.

THE DIRECTOR OF THE CRITICAL MINERAL SECURITY PROGRAM AT THE CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES AND JOINTS HARI SREENIVASAN TO FIGURE OUT WHY LEADERS ARE GOING AFTER THESE PRECIOUS RESOURCES.

>> THANK YOU FOR JOINING US.

IN THE LAST WEEK, WE SAW A POTENTIAL DEAL BETWEEN THE PRESIDENT OF THE UNITED STATES AND THE PRESIDENT OF UKRAINE FALL APART.

ABOUT MINERAL RIGHTS.

I THINK PEOPLE WERE CAUGHT UP IN THE VIRAL MOMENT THAT HAPPENED IN THE OVAL OFFICE AND ALL THE INFORMATION IN THE NEWS ABOUT THIS ENTIRE MINERAL CONVERSATION GOT VERY LET'S BACK UP A LITTLE BIT AND SET THE TABLE FOR OUR AUDIENCE.

WHAT WAS THE MINERAL RIGHTS DEAL THAT WAS SUPPOSED TO TAKE PLACE?

>> THE ORIGINAL DEAL CALLED FOR UKRAINE TO PAY $500 BILLION BACK TO THE UNITED STATES FOR MILITARY AID THAT HAD BEEN PROVIDED IN EXCHANGE, PRESIDENT ZELENSKYY WANTED SECURITY GUARANTEES .

BUT THE U.S. NEVER ACTUALLY SPENT $500 BILLION ON AID IN UKRAINE.

WE KNOW THE FIGURE TO BE CLOSER TO ABOUT $138 BILLION.

THE DEAL GOT NEGOTIATED DOWN AND DOWN AND DOWN AND ULTIMATELY WHERE WE LANDED IS THAT THERE WOULD BE A FUND THAT WOULD BE SET UP, AND ALL FUTURE MINERAL OIL AND GAS PROJECTS WOULD TAKE 50% OF THE REVENUE.

AND PUT IT INTO THIS FUND.

THIS FUND COULD ALSO INVEST IN UKRAINE.

HOWEVER, THE SECURITY GUARANTEE NEVER CAME BACK, WHICH WAS THE POINT OF ULTIMATE CONTENTION.

>> THAT IS, YOU ARE LAYING OUT WHAT BOTH PARTIES WANTED, THE UNITED STATES WANTED A RE- COMPENSATION FOR THE AID WE HAVE GIVEN, AND ON THE OTHER HAND, ZELENSKYY ASSUMES, IF I AM IN A LONG-TERM PARTNERSHIP WITH UNITED STATES, THEY WILL WANT TO PROTECT THEIR ASSETS.

I GET SOME SECURITY >> THAT IS RIGHT, HE WANTED AN EXPLICIT SECURITY GUARANTEE INCLUDED, DONALD TRUMP ARGUED THAT, THE COOPERATION IN AND OF ITSELF WAS AN IMPLICIT SECURITY GUARANTEE.

THAT THERE WOULD BE LESS LIKELIHOOD OF ANOTHER INVASION IF THERE WAS A STRONG RELATIONSHIP WITH THE U.S. >> OKAY, NOW LET'S TALK ABOUT WHAT ARE THE MINERALS AT STAKE HERE AND WHY ARE WE INTRIGUED BY WHAT IS INSIDE, UNDERNEATH THE SOIL OF UKRAINE.

>> A VARIETY OF RESOURCES, EVERYTHING FROM OIL AND GAS, COAL, GRAPHITE, URANIUM, TITANIUM, BUT WHAT WE'RE REALLY AFTER WHERE THE RARE, A GROUP OF 17 ELEMENTS, THEY ARE ACTUALLY A BIT OF A MISNOMER, THEY ARE NOT ACTUALLY RARE, THEY ARE EVERYWHERE THAT THEY OCCUR IN SMALL QUANTITIES.

THEY ARE VERY DIFFICULT TO EXTRACT.

OVER THE LAST FIVE YEARS, THE U.S. HAS REALLY PRIORITIZE RARE BECAUSE THEY WOULD WEBINARS BY CHINA -- IN 2010, CHINA CUT OFF RARE EARTH EXPORTS TO JAPAN OVER A FISHING TRAWLER DISPUTE.

SINCE THEN, THEY HAVE ROLLED OUT A SET OF RESTRICTIONS ON THE U.S., RARE EARTH, WHILE USING ENERGY TECHNOLOGIES, ARE VITAL FOR OUR DEFENSE.

WE USE THEM IN MISSILES, LASERS, TANKS, WARSHIPS, FIGHTER JETS, ALL MUNITIONS.

WHAT THE U.S. DID, BECAUSE CHINA HAS 90% OF THE WORLD'S PROCESSING CAPABILITIES IS WE DECIDED FIVE YEARS AGO THAT WE WERE GOING TO LEVERAGE OUR DEFENSE PRODUCTION ACT AND WE THROUGH FEDERAL FUNDING AT $300 MILLION.

TO BUILD RARE EARTH SEPARATION FACILITIES AT HOME IN AMERICA.

THE BIG DILEMMA IS, THE GEOLOGY DOES NOT TOTALLY FAVOR AS.

WE HAVE ABOUT 1.3% OF THE WORLD'S RARE EARTH, WHICH ARE NOT REALLY ENOUGH TO FEED THE PROCESS CAPABILITIES WE ARE BUILDING.

EVEN UNDER PRESIDENT BIDEN, THE DEVELOPMENT FINANCE CORPORATION , WAS STARTING FINANCING FOR A RARE EARTH PROJECT IN BRAZIL.

WE SAW A RAPID ESCALATION OF THAT UNDER PRESIDENT TRUMP WE SAW HIM TALK ABOUT RARE EARTH FROM GREENLAND AND UKRAINE, BASICALLY, HE IS DEVELOPING A STRATEGY IN A WAY TO SOURCE RARE EARTHS FROM OTHER PARTS OF THE WORLD AND BRING THEM HOME , PROCESS AT HOME, AND MANUFACTURE THOSE DEFENSE TECHNOLOGIES.

>> HOW MUCH OF THE AREA IN UKRAINE THAT MAY HAVE THESE MINERALS IS NOW UNDER RUSSIAN CONTROL TERRITORY VERSUS THE UKRAINIAN TAX >> THE DOME AS REGION IS RESOURCE RICH, WE HAVE GRAPHITE, RARE EARTHS, COAL, FROM THE PRELIMINARY DECADES, RARE EARTHS DO EXIST IN OTHER PARTS OF THE COUNTRY ONE THING THAT HAS BEEN NOTICEABLE, THERE HAS BEEN A LACK OF PRIVATE SECTOR VOICE IN ADVOCATING FOR THIS AGREEMENT, PART OF IT IS, THE PRIVATE SECTOR DOES NOT KNOW WHAT THEY WANT TO GO THERE.

YOU HAVE MULTIPLE CHALLENGES.

THE FIRST ONE IS MAPPING.

THE SECOND IS MINING IS INCREDIBLE -- INCREDIBLY ENERGY INTENSE, GLOBALLY IT USES 60% OF THE WORLD'S ELECTRICITY.

ENERGY INFRASTRUCTURE HAS BEEN DAMAGED IN THE WAR.

THE THIRD THING IS BUT THE LOOMING RISK THAT SITS ACROSS THE BORDER.

THIS IS WHERE WE DISAGREE AND THE NEGOTIATIONS BLEW UP.

AGAIN, ZELENSKYY IS LIKE, I WANT AN EXPLICIT SECURITY GUARANTEE , THE PRIVATE SECTOR WOULD LIKE AN EXPLICIT SECURITY GUARANTEE.

BECAUSE, YOU KNOW, FROM THE TIME WE START LOOKING AT AN ASSET, IT IS 18 YEARS ON AVERAGE GLOBALLY JUST TO BUILD THE MIND.

-- JUST A BUILDUP MINE, IT CAN RUN 30 TO 80 YEARS, THAT IS 100 YEARS, ZELENSKYY IS NOT SURE HE IS WILLING TO MAKE A LONG-TERM BET , A MINE CAN COST $500 MILLION-$1 BILLION, WHAT IF VLADIMIR PUTIN WAS TO -- >> AN INTERESTING REDRAWING OF ALLIANCES BASED ON THESE MINERALS AND HOW HARD THEY ARE GOING TO BE TO GET, ESPECIALLY HOW IMPORTANT AND HUNGRY WE ARE FOR THEM NOW.

IT SEEMS LIKE, FOREIGN-POLICY IS NOW POTENTIALLY BEING DRIVEN BY OUR ACCESS TO THESE RESOURCES.

WE HAVE BEEN IN THAT BOAT BEFORE, 30 TO 50 YEARS AGO, MAYBE DIFFERENT MINERALS.

>> WE HAVE DONE IT WITH OIL FOR A LONG TIME.

THE REASON CHINA HAS BUILT THIS EVENT IS, THEY LINKED UP THERE FOREIGN-POLICY IN AFRICA, LATIN AMERICA, ASIA, TO THEIR DOMESTIC INDUSTRIAL STRATEGY.

PEOPLE DO NOT REALIZE THEY ONLY HAVE ABOUT 10% OF THE WORLDS NICKEL, COBALT, LITHIUM, BUT WHAT THEY HAVE DONE IS PROCESS BETWEEN 40% AND 90%, THEY HAVE STRATEGICALLY SOURCED FROM AROUND THE WORLD AND THEY BRING THEM BACK HOME FOR PROCESSING AND THEY HAVE ESTABLISHED COMPLETE DOMINANCE.

DONALD TRUMP IS TRYING TO TAKE A PAGE OUT OF THIS PLAYBOOK TO SAY, LET ME SOURCED FROM ALL OF THESE OTHER COUNTRIES AND BRING IT BACK HOME.

>> WHICH IS A CASE EXAMPLE OF HOW INTERCONNECTED THE WORLD IS.

ON THE ONE HAND, POLICY MAY SAY, I WANT TO BE AMERICA FIRST, WHAT YOU'RE POINTING OUT WITH THIS, YOU ARE INTERDEPENDENT ON ALL THESE COUNTRIES, WHERE THE MINERALS ARE SITTING IN THE GROUND, EVEN IF YOU HAVE THE FACTOR CAPACITY TO PROCESS THEM.

>> ABSOLUTELY YOU SEE THIS WITH THE EXECUTIVE ORDER ON ENERGY FROM PRESIDENT TRUMP, HE TALKS ABOUT MINING AT HOME AND ABROAD.

EVEN IN THE AMERICA FIRST AGENDA , HE HAS NOT TAKEN OUT THE FACT THAT WE HAVE TO GO GLOBAL.

IF WE WANT TO SECURE MINERALS.

BECAUSE WE DO HAVE LIMITED GEOLOGY.

>> EXPLAINED TO OUR AUDIENCE ABOUT HOW CHINA HAS SHAPED THERE FOREIGN-POLICY AROUND MINING AND MINERALS.

>> CHINA HAS INVESTMENTS IN FOREIGN POLICY LARGELY TARGETING MINERAL RICH JURISDICTIONS.

FOR EXAMPLE, CHILE WAS ONE OF THE FIRST COUNTRIES TO BECOME PART OF THE BELT AND ROAD INITIATIVE AND THEY PROVIDE A THIRD OF CHINA'S COPPER THAT THEY REFINE IN CHINA AND PROCESS AND MANUFACTURE IN IMPORTANT TECHNOLOGIES IF WE LOOK AT AFRICA, BELT AND ROAD INVESTMENT IS YOU STRATEGICALLY, AN EXAMPLE IN 2007, DRC HAD COME OUT OF THE CONFLICT AND CHINA NEGOTIATED A DEAL, PROVIDING $3 BILLION OF INFRASTRUCTURE TO THE DRC IN EXCHANGE FOR ACCESS TO $93 BILLION OF COBALT AND COPPER IN THE COPPER BELT.

TODAY, 15 OF THE 19 BIGGEST COBALT AND COMPROMISE ARE OWNED BY CHINESE COMPANIES.

IT WAS A STRATEGIC AND LONG-TERM BET WHERE THEY PROVIDED THE INFRASTRUCTURE TO DEVELOP THE COUNTRY.

AT A TIME WHEN NO OTHER COUNTRY WANTED TO PROVIDE THAT CAPITAL.

IN EXCHANGE, THEY HAVE SECURED ALMOST ALL OF THEIR COBALT SUPPLY COMING FROM THE DRC.

>> HOW DOES THE U.S.

STAND TOWARDS CHINA RIGHT NOW COMPLICATE THINGS?

RIGHT NOW, WE HAVE AN INCREDIBLY STRONG RHETORIC, ALSO, THREATENING TARIFFS UPON TARIFFS.

>> OUR POLICY WITH CHINA IS DRIVING US IN THE OPPOSITE DIRECTION.

A LOT OF THESE EFFORTS WITH AGGRESSIVE MINERAL DIPLOMACY AND EFFORTS TO BUILD THE SUPPLY CHAINS, IS WITH THE SOLE PURPOSE OF REDUCING RELIANCE ON CHINA.

LIVING IN WASHINGTON COME I CAN TELL YOU, THE EASIEST WAY TO GIVE IT SOMEONE OF AN IDEA IS TO EXPLAIN TO THEM THAT WE ARE AT RISK IN CHINA AND THE REPUBLICANS AND THE DEMOCRATS WILL MOVE.

MINERALS ARE ONE OF THE MOST BIPARTISAN ISSUES IN WASHINGTON.

IN FACT, SHORTLY AFTER INAUGURATION, I WAS SPEAKING TO A SENATOR'S OFFICE AND THEY SAID, WE THINK MINERALS MAY BE THE ONLY AREAS WE CAN COWRITE A BILL AND NOW.

THAT IS THE TIME WE ARE IN WASHINGTON.

IT TOUCHES ON DEPARTMENTS OF DEFENSE, STATE, INTERIOR, COMMERCE, IT IS FAR-REACHING.

15 GOVERNMENT DEPARTMENTS WORKING ON MINERALS.

IT IS A COUNTERING CHINA EFFORT.

>> IS THERE A POTENTIAL, ARE THERE ANY MINERALS THAT WERE SO NECESSARY TO US THAT WE WOULD GO TO WAR FOR THEM?

WHAT IS IN MY CELL PHONE RIGHT NOW?

WHAT MAY BE IN AN ELECTRIC CAR BATTERY?

SOMETHING THAT, AS YOU POINTED OUT, IN A MISSILE OR OTHER WEAPONS SYSTEM?

>> THE ONES IN OUR DEFENSE TECHNOLOGIES, WHERE CHINA HAS BEEN HITTING THE HARDEST LATELY.

SOME OF THE RECENT RESTRICTIONS HAVE BEEN ON ANTIMONY, TUNGSTEN , PEOPLE ARE WORRIED ABOUT TITANIUM.

THESE ARE REALLY HARD MATERIALS .

IF YOU GO BACK AND LOOK AT THE RESTRICTIONS CHINA ROLLED OUT THE FIRST WEEK OF DECEMBER IN 2024, THEY ACTUALLY LEFT OPEN A PROVISION FOR OTHER SUPERHARD MATERIALS.

SURE ENOUGH, TUNGSTEN CAME AFTER THAT.

THOSE ARE THE CRITICAL VULNERABILITIES WE'RE LOOKING AT RIGHT NOW.

FOR SOME OF THESE, THE U.S.

DOES NOT HAVE AN ALTERNATIVE SUPPLY.

>> YOU ARE IN CANADA RIGHT NOW FOR A CONFERENCE ABOUT THIS.

ONE OF THE PEOPLE THINKING ABOUT, LOOK, THEY MAY BE TALKING ABOUT MINING AND MINERALS MOST OF THE TIME HIM ABOUT THE GEOPOLITICS OF THIS HAD BECOME CONSIDERED TO THE REST OF US OVER THE LAST COUPLE WEEKS.

>> A CERTAIN AMOUNT OF FRUSTRATION.

YOU ARE WILLING TO GO TO UKRAINE AND MAKE A DEAL WITH MINERALS THAT WE DO NOT KNOW ENTIRELY WHAT IS THERE AND COMMERCIALLY ATTRACTIVE IT, BUT TRY TO ROLLOUT TARIFFS ON CANADA, AN IMPORTANT ALLY.

THE BIGGEST SUPPLIER OF NICKEL, WHICH IS VITAL FOR DEFENSE TECHNOLOGY.

AUTOMOTIVE MANUFACTURING.

HUGE SUPPLIER OF URANIUM, HOW WE NEED OUR NUCLEAR ENERGY.

WE GET ONE FIFTH OF OUR POWER IN THE U.S. FROM NUCLEAR G, WE DO NOT PRODUCE MUCH URANIUM.

THERE IS A COGNITIVE DISSONANCE EXISTING IN THE PRIVATE SECTOR, EVEN WITH POLICYMAKERS WORLDWIDE , WE ARE IN CANADA THIS WEEK FOR THIS CONFERENCE, TO GO, OKAY , WE'RE WILLING TO MAKE THESE DEALS AND PLACES THAT ARE HARD AND THE PRIVATE SECTOR DOES NOT WANT TO GO, BUT WE HAVE OUR STABLE ALLIES THAT ARE HERE AND PENALIZING THEM WHEN THEY COULD BE STRATEGIC IN REDUCING OUR RELIANCE ON CHINA.

>> IF WE ARE TRYING TO DO THIS, IS THE INTENTION IN THE RIGHT PLACE?

BECAUSE, IT SEEMS LIKE, IF CHINA CONTROLS SUCH AN ENORMOUS QUANTITY OF MINERALS THAT WE NEED, IN INTENSE AMOUNTS , SHOULD WE BE TRYING TO FIGURE OUT HOW TO ACQUIRE OUR OWN STEADY SUPPLY OF THOSE THINGS?

>> THAT IS THE GOAL OF WHAT WE ARE TRYING TO DO.

IF WE LOOK AT THE LAST FIVE YEARS, WE HAVE OUR DEVELOPMENT AND FINANCE CORPORATION AND HOW THE U.S. FUNDS PROJECTS ABROAD, WE OWN PART EQUITY IN A RARE EARTHS PROJECT IN SOUTH AFRICA AND PART EQUITY IN A PROJECT , A NICKEL PROJECT IN BRAZIL, WE DID A LOAN FOR A GRAPHITE PROJECT IN MOZAMBIQUE THAT FEEDS BACK TO LOUISIANA.

IT IS A GROWING EFFORT TO WHAT WE ARE DOING NOW IS BUILDING, FOUR PHENOMENAL YEARS, WHEN I LIKE TO GO MINERALS DIPLOMACY THE TACTICS BY DONALD TRUMP IS MORE AGGRESSIVE.

IN TERMS OF MAKING IT POTENTIALLY THE END OF THE WAR, HITCHING AID TO IT, TALKING ABOUT ANNEXING, IT IS A STRATEGY WE HAVE BUILT OVER TIME BECAUSE WE WILL NOT COUNTER CHINA ALONE.

IT IS PHYSICALLY IMPOSSIBLE.

>> MINERALS DIPLOMACY, WHAT ARE THE UNINTENDED CONSEQUENCES WHEN A COUNTRY GETS INCREDIBLY RICH AND INCREDIBLY FAST?

HOW DO YOU PROTECT FROM MAKING SURE THAT COUNTRY DOES NOT GET AGGRESSIVE TOWARDS HIS NEIGHBORS , WHERE ALL THE MONEY GOES TO A DICTATOR THAT IS HORRIBLE TO THE PEOPLE?

>> THE SHORT ANSWER IS WE CAN'T.

AS A GOVERNMENT, THIS $150 MILLION LOAN TO A GRAPHITE PROJECT IN MOZAMBIQUE, A CIVIL WAR STOPPED THE PROJECT AND IT STOPPED.

NATURAL RESOURCES ARE HISTORICALLY DRIVEN AN ENORMOUS AMOUNT OF COPPER GLOBALLY.

ANYTIME YOU CAN GRAB CAPITAL, GIVES WAY TO TENSION AND CHALLENGES.

WE ARE STARTING TO SEE THAT PLAY OUT.

RIGHT BEFORE THIS -- ZELENSKYY CAME TO THE U.S., VLADIMIR PUTIN ANNOUNCED HE WAS WILLING TO NEGOTIATE AND TRY TO MAKE A MINERALS AGREEMENT.

HE DID NOT JUST NEGOTIATE THE MINERALS ON RUSSIAN LAND, HE WAS WILLING TO DO IT WITH MINERALS ON RUSSIAN OCCUPIED LAND.

WHICH IS A BIT OF A RED FLAG.

WE HAVE SEEN THAT HIS WILLINGNESS TO NEGOTIATE WITH LAND THAT IS NOT HIS IS PART OF WHY THE PRIVATE SECTOR IS GOING, DOES THAT MEAN HE WILL NOT FURTHER EXPROPRIATE LAND AND TAKE IT WHEN THE INVESTMENT IS HERE.

WE HAVE SEEN A DRIVER OF CONFLICT ESCALATE.

>> ARE WE CREATING ODD INCENTIVES?

IF THE PRICE OF TITANIUM, WHICHEVER MINERAL JUST KEEPS GOING TO THE ROOF, IS A THERE AN INCENTIVE FOR ONE COUNTRY TO LOOK OVER ACROSS THE BORDER AND SAY, HE OR SHE HAS SOME RIGHT THERE, LET ME SEND SOME TANKS AND SECURE THE AREA?

>> THIS IS WHAT IS HAPPENING WITH THE DEMOCRATIC REPUBLIC OF CONGO AND RWANDA, THE DRC PRESIDENT LAST WEEK ASKED PRESIDENT TRUMP FOR A CRITICAL MINERALS AGREEMENT IN EXCHANGE FOR MILITARY SUPPORT.

FOR QUITE A WHILE NOW, RWANDA, UNDER KAGAME, HAS BEEN SMUGGLING RESOURCES OUT AND BRINGING THEM BACK AND RWANDA.

RWANDA IS A TINY COUNTRY.

THEY CITE A CRITICAL MINERALS AGREEMENT WITH THE EU, THE CONGO IS GOING, THOSE ARE OUR RESOURCES YOU ARE SIGNING AN AGREEMENT WITH AND SMUGGLING THEM THROUGH AND FUNDING CONFLICT.

IT DOES CREATE A LOT OF PERVERSE INCENTIVES.

SPEAKING CANDIDLY, IF THE U.S. IS TO SUCCEED IN HIS MINERALS DIPLOMACY, IT WILL BETTER NEED TO LEVERAGE SECURITY FORCES ANYWAY ULTIMATELY, WE NEED TO MAKE SURE THAT, WHEN WE ARE MAKING INVESTMENTS, OUR PEOPLE AND OUR ASSETS ARE SAFE.

WHEN YOU TALK TO THE PRIVATE SECTOR IN A NUMBER OF THESE PLACES, FROM THE CONGO TO UKRAINE, MALI, WE CAN'T GO IN WITHOUT A SENSE OF PROTECTION BECAUSE THE RISK DOES REMAIN.

>> THANK YOU FOR JOINING US.

>> THANK YOU FOR HAVING ME