“See here, old bean,” the consul heard himself saying, “to have against you Franco, or Hitler, is one thing, but to have actinium, argon, beryllium, dysprosium, niobium, palladium, praseodymium, ruthenium, samarium, silicon, tantalum, tellurium, terbium, thorium, thulium, titanium, uranium, vanadium, virginium, xenon, ytterbium, yttrium, zirconium, to say nothing of Europium and Germanium – ahip! – and Columbium! – against you, and all the others, is another.”
— Malcom Lowry, “Under the Volcano.”
And with the delivery of that tongue-twisting line from Lowry’s novel about a sozzled diplomat, the celebrated actor Albert Finney laid claim to elevating the Periodic Table of Elements to stardom in his Oscar-nominated portrayal of British consul Geoffrey Firmin in the 1984 film “Under the Volcano.”
By now, you’ve probably heard the chatter – the enchanted story about how Ukraine sits on an untapped trove of rare earth elements (REEs), a geopolitical bonanza of 17 specific minerals with the gleam to grease the next industrial revolution, embolden a Ukrainian economic renaissance, and refund America’s hefty contributions to the war effort against Russian aggression.
It’s a multibillion-dollar Hollywood mirage.
But it’s also easy to get swept up in the elevator pitch, especially when the rhetoric comes courtesy of the usual suspects: Ukrainian politicians puffing their chests, commodity traders with dollar signs in their eyes, and mining executives running around with ceremonial shovels. Throw in a few let’s-make-a-deal quotes from President Donald Trump during his State of the Union address, and we’ve got ourselves a full-tilt boogie frenzy of wishful thinking.
So let’s take a step back and look at this $500 billion rare earth fever dream through the fogged-up lens of a reality this reporter knows better than most.
Once upon a time, before the collapse of the Soviet Union, your humble reporter was a metal trader who dealt in rare minerals and other strange sounding lumps of earth.
Time was spent crawling around Russian mines, visiting Ukrainian ore processing facilities and haggling prices with Soviet officials in Moscow, all in research for a book, “Metal Men,” the story of commodity trading magnate Marc Rich, who at the time was the most wanted white-collar criminal in history, until President Bill Clinton pardoned him in December 2000.
Here’s the new white-collar scam storyline: Ukraine has “billions” in REEs, rocks crucial for modern technology, including electric cars, renewable energy, and military equipment. From the mouth of Ukrainian President Volodymyr Zelenskyy himself, the country is supposed to have an “unlimited potential” in rare earth minerals, something that will surely lead to financial independence and a new economic boom.
And there’s no shortage of Ukrainian mining moguls ready to jump in and show the world how it’s done. The prospect of transforming the country’s economic fate through a few excavators and drill bits sounds appealing, especially when desperate people are looking for hope, and the West has been dangling money faster than Washington gossip.
Commodities are more than items necessary for everyday life.
They are a condition, a state of mind.
And what metal traders do is sympathetically create manicured images around simple objects of trade. Nowhere is this dynamic more so than in REEs. Where a trader ends up hinges largely on how much risk he decides to take, how much bilious panic he wishes to create.
The lessons are: On one hand, consider any hoax to control a commodity; and, on the other hand, make sure you can get away with it.
The REE trick, the primary voodoo that convinced Trump’s advisers Ukraine was bursting with the good stuff, was crafted in December in a research paper released by the NATO Energy Security Centre of Excellence in Lithuania. The group is affiliated with the NATO alliance, but it operates outside NATO’s chain of command.
The text reads, “Ukraine emerges as a key potential supplier of rare earth metals such as titanium, lithium, beryllium, manganese, gallium, uranium.”
The problem is none of those metals are REEs.
Yet this is not just another boondoggle of overinflated expectations. This is the kind of hype that’s been perpetuated by the same people who once promised that the Iraqi oil fields would make Baghdad the new Dubai, or that $1 trillion of untapped mineral deposits in Afghanistan, including some crucial for electric-car batteries, like lithium.
“The Pentagon went as far as describing Afghanistan as ‘the Saudi Arabia of lithium’,” says Javier Blas, co-author of “The World for Sale: Money Power and the Traders Who Barter the Earth’s Resources.”
“What Ukraine has is scorched earth,” Blas adds. “What it doesn’t have is rare earths. Surprisingly, many people seem convinced the country has a rich mineral endowment. It’s a folly.”
Ukraine has been touting these minerals as if they were the holy grail – just waiting to be extracted like some sort of glittering treasure in an Indiana Jones movie.
But as any seasoned miner or geologist will tell you, claiming you have “billions worth” of rare earths is a gross simplification. To put it bluntly, nobody knows how much of this stuff is even there.
Ukraine’s mining sector, still reeling from decades of Soviet neglect and mismanagement, has not exactly been conducting world-class exploration of its mineral resources.
As Blas and metal traders tell the story, Ukraine has no significant rare earth deposits other than small scandium mines.
Indeed, the U.S. Geological Survey doesn’t list Ukraine as holding any reserves and neither does any other database commonly used in the mining and metal-trading industries. Even the boys in the Kremlin are bumfuzzled.
Five-hundred billion dollar worth of REEs, eh?
“Good God,” Firmin said from under his volcano. “If our civilization were to sober up for a couple of days, it’d die of remorse on the third.”
A. Craig Copetas is an award-winning reporter, writer and author who has more than a half century covering news and politics for publications including Rolling Stone, Bloomberg and The Wall Street Journal. He lives in Paris.