The U.S.- Ukraine Minerals Deal: How Rare Earths Are Reshaping Geopolitics | Amanpour and Company

well as we discussed earlier a potential minerals deal between the US and Ukraine is still on the table in her New York Times opinion piece our next guest says Trump is taking a page out of China's foreign policy Playbook as we enter quote a new era of minerals diplomacy gracein basaran is the director of the critical mineral security program at the center for strategic and international studies and she joins har R Nason to discuss why leaders are going after these precious resources Biana thanks Gracin baser and thanks so much for joining us um 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 and I think you know people were kind of caught up in the viral moment that happened in the Oval Office and all the information and news about this entire mineral conversation got buried so let's kind of back up a little bit and set the table a little bit for our audience here what was the mineral rights deal that was supposed to take place the original deal actually called for Ukraine to pay $500

billion dollar back to the United States for military aid that had already been provided in exchange president zilinsky wanted security guarantees however the US never actually spent $500 billion do on Aid in Ukraine we know the figure to be closer to about 138 billion So eventually the deal got negotiated down and down and down and ultimately where we land 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 their revenue and put it into this fund and this fund amongst other

things could also invest in Ukraine however the security guarantee never came back which was the point of ultimate contention so I guess that's kind of you're laying out what both parties wanted on the one hand the United States wanted some sort of recompensation for the aid that we've given and then on the other hand and zalinski assumes that hey if I'm in a long-term partnership with the United States they're going to want to protect their assets so I get some security that's right he wanted a sec an explicit security guarantee included and then president Trump

argued that you know the cooperation in of itself was an implicit security guarantee that there would be less likelihood of another Invasion if there was a strong relationship with the US okay and now let's talk a little bit about kind of what are the minerals at stake here why are we in by what is on inside underneath the soil of Ukraine has a variety of resources they've got everything from oil gas coal but they've got graphite Rare Earth uranium titanium but what we were really after were the rare earth and rare earth are a group

of 17 elements and they're actually a bit of a misnomer because they're not actually rare in fact they're everywhere but they tend to occur in small quantities and they're very difficult to extract but over the last five 5 years the US has really prioritized Rare Earth because they've been weaponized by China the earliest kind of weaponization was back in 2010 China cut off Rare Earth exports to Japan over a fishing trer dispute and then since then we've seen them roll out a series of restrictions on the US now rare Earths while used in Energy Technologies

are absolutely vital for our defense we use them in missiles lasers tanks warships Fighters jet all Munitions and so what the US did because China has 90% of the world's Rare Earth processing capabilities is we decided five years ago that we were going to leverage our defense production act and we through federal funds put out $300 million to build Rare Earth separation facilities here at home in America now the big dilemma is that geology doesn't totally favor us so we have about 1.3% of the world's Rare Earth which aren't really enough to feed the processing

capabilities we're building so what pres even under President Biden the development Finance Corporation was already starting financing for a rare earth project in Brazil Sarah Verde and then we saw a rapid escalation of that under President Trump we saw him talk about rare Earths from Greenland Rare Earth from Ukraine so he's basically developing a strategy of in a way to Source rare ear from other parts of the world to bring them home process at home and manufacture those defense Technologies how much of the area in Ukraine that might have some of these minerals is now

under Russian control territory versus Ukrainian yeah danus region certainly is extremely resourcer we have graphite there we have rare Ur there um there is a lot of coal in dbas but rare earth actually from the very preliminary you know decades old mapping do exist in other parts of the country one thing that's been quite noticeable you know is that there has been a lack of private sector voice in advocating for this agreement and part of it is the private sector doesn't know if they want to go there you have multiple challenges so the first one

is the mapping the second is mining is incredibly energy intensive you know globally it uses 16% of the world's electricity and a lot of that in energy infrastructure has been damaged in the war and third thing is the looming risk that sits across the border and this is where we disagreed and the negotiations kind of blew up is you know again zalinsky is like well I want an explicit security guarantee the private sector would also like an explicit security guarantee because you know from the time I start looking at an asset it's 18 years on

average globally just to build the mine and then it's another that mine can run for another 30 to 80 years so you're really looking it close to a 100 years companies and president zalinsky are going well not really sure if I'm willing to make that long-term bet a mine can cost 500 million to a billion dollars what if Putin decides to kind of expand occupi land because he's not letting go of it what you're pointing out is there sort of an interesting redrawing of alliances based on these minerals and how hard they're going to be

to get and especially how important and hungry we are for them right now so I mean it seems like foreign policy is now potentially being driven by our access to these resources and we've been in that boat before 30 or 50 years ago it might have been a different set of minerals absolutely and it's also we I mean we've done it with oil for a long time yeah but even if you look I mean I would say the reason China has built this huge comparative advantage is they've linked up their foreign policy in Africa Latin

America Asia to their domestic Industrial strategy people don't realize you know they only have about 10% of the world's nickel Cobalt um lithium but what they've done is they processed between 40 and 90% because they have strategically sourced from around the world and then they bring them back home for processing and they've established complete dominance so Trump in a way is trying to take a page out of this Playbook to say let me Source from all these other countries and bring it back home which is a kind of a case example of how interconnected the

world is and while on the one hand policy might say I want to be America First what you're pointing out with this is that you're interdependent on all these countries where the actual minerals are sitting in the ground even if you have the factory capacity to process them right absolutely and I mean you see this with President Trump's executive order on energy he talked about mining um both at home and abroad you know so even in the America you know America first agenda he hasn't taken out the fact that we have to be Go Global

if we want to secure minerals because we do have limited geology I guess explain to our audience a little bit about how China has shaped their foreign policy around Mining and minerals so China's investments in their foreign policy has largely targeted mineral Rich jurisdiction so for example you know Chile was one of the first countries to become you know a belt part of the belt and Road initiative and now they Supply a third of China's raw copper that is now refined in China and then processed and manufactured into really important Technologies if we look at

Africa belt and Road initiative investment has been used very strategically an interesting example back in 2007 was you know DRC had just come out of conflict and what China did is they negotiated a deal they provided $3 billion of infrastructure to the DRC in exchange for access to 93 three3 billion dollar of cobalt and copper and coal wayy down in the copper belt today 15 of the 19 biggest Cobalt and copper mines are owned by Chinese companies so it was a very strategic long-term bet where they provided the infrastructure to develop the country at a

time when no other country really wanted to come in and provide that Capital but in exchange I mean they have secured almost all of their Cobalt Supply coming from the DRC yeah so how does the US stance to work words China right now complicate things I mean right now we've been you know incredibly strong rhetoric but also we're threatening tariff upon tariff our policy with China is actually driving us in the opposite direction so a lot of these efforts you've seen with aggressive kind of minerals diplomacy and efforts to build these Supply chains is with

the sole purpose of reducing Reliance on China you know living in Washington I can tell you the most the easiest way to convince someone of an idea is to explain to them that we are at risk at China and both the Republicans and the Democrats will move minerals are one of the most bipartisan issues in Washington in fact you know shortly after inauguration I was talking to a senator's office and he said you know we actually think minerals might be the one of the only areas we can coite a bill in now so that is

the era that we are in in Washington is it touches on Departments of Defense State interior Commerce it's it's far-reaching in fact there's 15 government departments working on minerals and it's really a countering China effort is there a potential here are there any minerals that are so necessary to us that we would go to war over them is it what's in my cell phone right now is it what might be an electric car battery or is something that as you pointed out is maybe in a missile or some sort of other weapon system so I

would say the ones that are in our defense Technologies which is actually where China has been hitting the hardest lately so some of the recent restrictions have been on antimony then we saw uh tungsten come out people are worried about Titanium because these are really hard materials if you go back and you look at the restrictions China rolled out the first week of December in 2024 they actually left open a provision for other super hard materials and sure enough tungsten came right after that so those are the critical vulnerabilities we're looking at right now because

for some of these the US doesn't have an alternate Supply you're in Canada right now for a conference about this and what are the people that are there thinking about you know look they might be talking about Mining and minerals most of the time but the geopolitics of this has become very front and center at least to the rest of us over the last couple of weeks you know there's a certain amount of frustration you know it's like you're willing to go to Ukraine and make a deal with minerals that you know we don't really

know entirely what's there and commercially attractive but you're trying to roll out ter s on on Canada which is a really important Ally and is the biggest supplier of nickel which is vital for defense Technologies automat Automotive manufacturing huge supplier of uranium which is how we need our nuclear energy fit Powers we get one fifth of our power in the US from nuclear energy we don't really produce much uranium so it's interesting is there's this like cognitive dissonance that's existing in um the private you know the private sector but even with policy makers worldwide who

are in Canada this week for this conference to go okay we're willing to go make these deals in places that are really hard and the private sector doesn't want to go but then we have our really stable allies over here that were penalizing when they could be really strategic in reducing our Reliance on China so if we are trying to do this I mean I guess is the intention kind of in the right place because it seems like if China controls such an enormous quantity of minerals that we need uh at at intense sort of

amounts should we be trying to figure out how to acquire our own steady supply of those things that's the goal of what we're trying to do so if we look at the last five years you know we have our development Finance Corporation which is how the US funds projects abroad and we've seen you know we own part equity and a rare earth project in South Africa we have par equity and a project a nickel project in Brazil we did a loan for a graphite project in mosan Beque that feeds back to Louisiana so it is

a growing effort you know what we're doing now is we're building on actually Four really phenomenal years of what I like to call minerals diplomacy now obviously Trump's tactic is a lot more aggressive in terms of you know making it a potentially the end of a war hinging aid to it talking about annexing so I mean it is part of a strategy that we've been building over time because we're not not going to counter China alone it's physically impossible you mentioned an interesting phrase minerals diplomacy what are the unintended consequences when a country gets incredibly

Rich incredibly fast you know like how do you protect from making sure that that country doesn't get aggressive towards its neighbors or uh that all of the money ends up going to a dictator that is horrible to their people the short answer is that we can uh we did as a government this $150 million loan to a graphite project in mosam Beek and then the Civil War basically ended the project and it went force meure in December natural resources have historically driven an enormous amount of conflict globally right anytime you can grab Capital out of

things very easily it gives way to tensions and challenges so we're starting to see that play out I mean look the right before this uh zalinski came to the US President Putin announced that he too was willing to negotiate and try and make a minerals agreement and he didn't just negotiate with minerals on Russian land he was willing to also do it with minerals on Russian occupied land which is a bit of a red flag so again we've seen that he his willingness to negotiate with land that's not his is part of why the private

sector is going hey that doesn't mean he's not going to further expropriate land and take it once the investment is here so we have seen that driver of conflict certainly escalate are we creating sort of the odd incentives right I mean if if the price of titanium or whichever mineral just keeps going through the roof then isn't there an incentive for one country to look over across the uh border and say well he or she has some right there let me just send in some tanks and try to secure that area this is a lot

of what's happening with the Democratic Republican and of Congo and Rwanda right now right in the DRC president Shiki last week also asked president Trump for a critical minerals agreement in exchange for military support but for quite a while now um Rwanda under Paul kagami has been going in and smuggling resources out and then bringing them back into Rwanda Rwanda is a tiny country and then they signed a critical minerals agreement with the EU you know and and and the Congo is going but those are our resources that you're signing an agreement with and smuggling

it through and it's funding conflict so it does create a lot of perverse Inc and look speaking candidly if the US is to succeed in its minerals diplomacy it's going to better need to leverage Security Forces anyway ultimately like we need to make sure that when we're going in and making Investments that our people and our assets are safe and when you talk to the private sector in a number of these places from Mali to the Congo to Ukraine it's like we can't go in there without a sense of protection because that risk does remain

director of the critical mineral security program at the csis graceon basar and thanks so much for joining us thank you for having me [Music] [Music]