Is there really $500bn of Rare Earths in Ukraine?

Summary

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Podcast Summary: More or Less: Behind the Stats

Episode: "Is there really $500bn of Rare Earths in Ukraine?"

Date: March 8, 2025
Host: Tim Harford (BBC Radio 4)
Guest: Eli Sakhlatvala (Head of Non-Ferrous Metal Pricing, Argus Media)

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Overview

In this episode, Tim Harford investigates recent claims circulating in the news that the US could secure "$500 billion worth of rare earths" from Ukraine. With expert insight from Eli Sakhlatvala of Argus Media, the show disentangles definitions, scrutinizes the credibility of mineral valuation estimates, and clarifies the real stakes in rare earth and critical minerals supply chains, particularly in the context of geopolitical tensions and the energy transition.

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Key Discussion Points & Insights

1. What Are Rare Earths? (01:38–03:11)

• Definition Misconceptions: The term "rare earths" is often confused with broader mineral wealth.
• Scientific Clarification: Rare earths are 17 specific elements, as humorously listed in a Tom Lehrer-style musical nod by Helen Arney.
  • Notable Moment: Helen Arney's song naming all 17 rare earths (02:14).
  • Use Cases: Glassmaking, ceramics, catalysts, magnets for electric vehicles, and wind turbines.

Quote (02:33):
Tim Harford: "That was geeky songstress Helen Arney listing all 17 rare earths, with apologies to the great Tom Lehrer."

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2. Are Rare Earths Really Rare? (03:11–04:53)

• Abundance in Nature: Despite their name, rare earths are not actually "rare" in Earth's crust.
  • Quote (03:11):
    Eli Sakhlatvala: "They are famously not rare...They are quite abundant in the Earth’s crust."
• Extraction Challenges: Access, extraction, and processing make them ‘rare’ in supply chains.
  • Geological complexity: Often found mixed with radioactive elements like uranium and thorium.
  • High CAPEX and timelines: Starting a new project can take over a decade and cost more than $1 billion, with no guaranteed pricing power due to China’s market dominance.

Quote (03:32):
Eli Sakhlatvala: "Within the metals world, it's a bit of an in joke that rare earths are not really rare."

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3. Geopolitical Stakes & the US-Ukraine Narrative (05:07–05:53)

• US Dependency on China: The US is highly reliant on Chinese rare earths, heightening strategic concerns.
• Vulnerability Illustrated: COVID-19 exposed the dangers of overreliance on a single source for critical materials.

Quote (05:15):
Eli Sakhlatvala: "These are undoubtedly critical materials for all sorts of industries...the US supply chain...is extremely vulnerable."

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4. The $500 Billion Claim – Does It Add Up? (05:53–09:18)

• Dubious Figures: The claim that Ukraine holds $500bn in rare earths does not align with market realities.
  • Ukraine’s actual reserves of true rare earths are only loosely mapped (mostly with outdated Soviet-era surveys).
• Market Comparison:
  • The global rare earths market was about $12.4 billion in 2024, making a $500bn valuation implausible.
    • Quote (07:00):
      Tim Harford: "That would be the value of the entire global market. For decades."
    • Quote (08:11):
      Eli Sakhlatvala: "It would be an extraordinary amount. If we're talking about true...rare earth elements."
• Likely Explanation:
  • The term "rare earths" is being stretched; more likely, it conflates a variety of valuable minerals—lithium, titanium, graphite, manganese, and others—all present in Ukraine.
  • Quote (08:28):
    Eli Sakhlatvala: "The term rare earths is being used in quite a loose sense to refer to this wide array of minerals..."

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5. How Much Are Ukraine’s Mineral Resources Worth? (09:14–09:50)

• Numbers with a Grain of Salt: Cited numbers (e.g., $15 trillion) are mostly speculative and depend on extraction feasibility, not just presence in the ground.
  • Many such figures are best treated with skepticism until modern exploration and valuation are done.
  • Quote (09:50):
    Eli Sakhlatvala: "It's always very, very difficult to estimate the value of resources in the ground...I would take them with an enormous pinch of salt."

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Noteworthy Quotes & Moments

• (03:11) Eli Sakhlatvala: "They are famously not rare."
• (03:32) Eli Sakhlatvala: "Within the metals world, it's a bit of an in joke that rare earths are not really rare."
• (05:15) Eli Sakhlatvala: "These are undoubtedly critical materials...the US supply chain...is extremely vulnerable."
• (08:11) Eli Sakhlatvala: "It would be an extraordinary amount. If we're talking about true...rare earth elements."
• (08:28) Eli Sakhlatvala: "The term rare earths is being used in quite a loose sense to refer to this wide array of minerals..."
• (09:50) Eli Sakhlatvala: "I would take them with an enormous pinch of salt."

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Timestamps for Key Segments

• 01:38 – Introduction to rare earths and the "$500 billion" news claim
• 02:14 – Rare earths song by Helen Arney
• 03:11 – Are rare earths “rare”? Eli Sakhlatvala explains
• 05:07 – US concerns about rare earth access
• 05:53 – Scrutiny of the $500 billion claim
• 07:00 – Discussion about the global rare earths market size
• 08:28 – The misuse of terminology in the mineral wealth narrative
• 09:18 – Broader and speculative estimates of Ukraine’s mineral wealth
• 10:05 – Conclusion and recap

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Tone & Style

The episode is characteristically skeptical, data-driven, and wry, with a debunking spirit. Tim Harford’s hosting remains genial and probing, while Eli Sakhlatvala provides grounded, industry-insider clarity on technical topics.

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Summary

The claim of "$500 billion worth of rare earths in Ukraine" is highly dubious when compared to both the actual global market value of rare earths and the technical difficulties in extracting and commercializing such resources. The real mineral wealth of Ukraine is broader, involving many critical minerals vital for the green energy transition, but breathless figures in headlines should be treated critically—especially when they rely on outdated surveys and imprecise definitions.

This episode is an accessible and illuminating case study of how numbers in the news—especially as they relate to geo-economics—require careful scrutiny before being accepted at face value.

Transcript

[Tim Harford]

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[Tim Harford]

Thank you for downloading the More or Less podcast. We're your weekly guide to the numbers in the news and in life, and I'm Tim Harford. As part of the fast moving argument over US military support to Ukraine, the US demanded $500 billion worth of access to what was variously reported as Ukraine's rare earths or rare metals or rare minerals. That might all sound like the same thing, but in fact the rare earths are a very specific group of elements.

[Eli Sakhlatvala]

Lutetium, promethium, samarium, anterbium, yttrium, ytterbium, anthulium and erbium, Europium, gadolinium, dysprosium, neodymium, cerium, scandium, holmium, lanthanum, then proceedymium La la la la la la la la la la la la la la la.

[Tim Harford]

That was geeky songstress Helen arney listing all 17 rare earths, with apologies to the great Tom Lehrer. So Those are the 17 rare earths, and they're used a lot within traditional industries such as glass making and ceramics or for making catalysts. They're Also used to make very powerful magnets which go into electric vehicles and into offshore wind turbines. But what about the $500 billion? I spoke to Eli Sakhlatvala, head of non ferrous metal pricing at Argus Media, a global commodity price reporting agency. I started by asking her, are rare earths rare?

[Eli Sakhlatvala]

They are famously not rare. Well, the Rare Earths, those 17 elements that we refer to, they are not technically rare. They are quite abundant in the earth's crust.

[Tim Harford]

I love the fact that you say they're famously not rare. I mean, for Argus, maybe it's famous that they're not rare. I'm not sure most of us realise they're not rare. Okay, so go on, that's fair.

[Eli Sakhlatvala]

I'd say within the metals world, it's a bit of an in joke that rare earths are not really rare. So you can find rare earth deposits in various parts of the world, across various different continents. They become rare when we actually think about access to them. It's one thing to have any type of mineral in the ground, it's quite another to be able to extract it, utilize it, process it, et cetera. So Rare Earths, those 17 elements, are amongst the hardest minerals to extract and process and plug into a meaningful supply chain. You've got huge variation in terms of the mineralogy. You've often got radioactive elements sitting in there in the mix, like uranium and thorium. Very difficult to separate rare earth elements from the other materials that surround them in these deposits. So it's a very difficult set of minerals to extract, Therefore very difficult actually to develop new supply chains. Hence we're still hugely reliant on China to access supply. And because China now has such dominance over both supply and consumption, that also means China has huge influence over rare earth prices. So if you're a project developer outside China, you run the risk of spending well over a billion dollars, probably more than a decade, just to get a new rare earth project up and running. And then you probably have very little control over the price at which you can sell your product. So that becomes a huge red flag to investors and has definitely contribute to the lack of progress diversifying that supply chain.

[Tim Harford]

So it does make sense that the US would be concerned to secure access to rare earths from somewhere other than China.

[Eli Sakhlatvala]

Yes, absolutely. These are undoubtedly critical materials for all sorts of industries, as we've mentioned, and the US supply chain for them is extremely vulnerable, partly because of the geopolitical angles here, tensions between the US and China, but also just in simple logistical terms, to really only have one major source for so many critical materials, as we saw for example, during COVID it carries enormous logistical risk. So the US is absolutely right to zoom in on rare earths as a vulnerable area and try to take steps to strengthen the supply options.

[Tim Harford]

So I wanted to get to this claim that the US wanted $500 billion worth of Ukraine's rare earths, or at least they did a few days ago. I mean there's. It's a fast moving story. Let's just say it's a fast moving story, but the rare earths themselves are not fast moving. So this figure that there's $500 billion worth of rare earths in Ukraine, or that the US could get a $500 billion share of rare earths in Ukraine, does that number make any sense?

[Eli Sakhlatvala]

From my perspective, not very much. I mean, let's start with the true rare earths that are potentially in Ukraine. There has been some mapping in the past which suggests Ukraine may have some of those 17 elements that I mention. However, we would need any of that mapping to be done fresh, with the most up to date standards. We need to understand the exact nature of any deposits. How deep are the ores, what's the mineralogy like. We need all of that sort of detail in order to put any sort of valuation on what it might be worth.

[Tim Harford]

You talked about this old map mapping. How old are we talking about?

[Eli Sakhlatvala]

Well, it depends on who you speak to, but I've spoken to people who believe some of that mapping dates back to Soviet era, 1980s, 1970s, potentially something like this. I mean, it's certainly not being done with the up to date processes and systems that we would expect nowadays. So we need a lot more detail on what exactly is sitting within those deposits. Only then I think could you draw some sensible valuations on what it could be worth once you've put in the substantial amounts of money to pull it out. And then if we think about the wider context in terms of what is the value, for example, of the global rare earths market right now? Well, it's very difficult to put true accurate valuations on these things. But in 2024, if you look at the different estimates that are out there, I mean, the highest estimates that I've seen are something like maybe $12.4 billion global value of the rare earths market last year. So to imagine we're going to get $500 billion worth out of Ukraine, all of a sudden you, to me, that is just pie in the sky.

[Tim Harford]

That would be the value of the entire global market. For decades.

[Eli Sakhlatvala]

Yes. It would be an extraordinary amount. If we're talking about true, you know, rare earth elements.

[Tim Harford]

Might there be other elements that are not, strictly speaking, rare earths, but are nevertheless valuable mineral resources and maybe they could be responsible for the balance of the $500 billion?

[Eli Sakhlatvala]

Yes, I think that is most likely what's happening. I think the term rare earths is being used in quite a loose sense to really refer to this wide array of minerals that we know that Ukraine has. I think there's a trip up here on language. I think Ukraine does have enormous potential with a wide array of minerals. We know that there are things like, you know, lithium, titanium, feedstocks are famously over there, various different base metals, graphite, manganese. These are all really important critical minerals. We need them for a lot of traditional industries, but also the green energy transition as well. Well, so there's potentially a huge amount of wealth sitting in the ground there, which I think is what's feeding into that $500 billion figure.

[Tim Harford]

Is there $500 billion worth of wealth? I mean, there might there be that much down there?

[Eli Sakhlatvala]

I don't know. I've seen some reports estimating that Ukraine's mineral resources could be worth something like $15 trillion. Whether or not that would actually stand up once you hold it against the reality of extracting and processing these minerals is a very different question. But, yeah, potentially there's a lot of money sitting at.

[Tim Harford]

Yeah, I'm curious. You mentioned this number of $15 trillion. So, I mean, that's a lot more than $500 billion. I mean, is that just some number that somebody made up or is there some realistic basis for it?

[Eli Sakhlatvala]

I think it's always very, very difficult to estimate the value of resources in the ground. I understand that people want to try and put some numbers on these resources, but I would take them with an enormous pinch of salt.

[Tim Harford]

Thanks to Eli Sakhlatvala of Argus Media. And of course, thanks also to Tom Lehrer, a proper mathematician, I'll have you know. And to Helen Arney. Her geeky songs are available at helenarney.bandcamp.com that is all we have time for, but if you have any questions or claims you'd like us to investigate, then please email more or lessbc.co.uk until next week. Goodbye.

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