Amid snow-covered fields in central Ukraine, home to some of the country’s largest proven lithium deposits, a small team of ecological consultants lowers sensors into the ground to measure water levels and minerals’ presence.
The environmental survey, commissioned by the Ukrainian mining company UkrLithiumMining, is being conducted years in advance of potential mining operations at the undeveloped site.
It underlines how much work is still to be done before a proposed minerals deal between Ukraine and the United States generates significant revenue for either side.
Trump-Zelenskyy’s Explosive Clash
U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy met in Washington on Friday to oversee the sealing of the deal, but the leaders engaged in an angry exchange of words before the world’s media and left the agreement unsigned.
Trump had said a deal could be America’s way of earning back some of the money it has given to Ukraine in the form of financial aid and weaponry to help fight Russia, which invaded three years ago. But the clash in the Oval Office cast the agreement’s future into doubt.
A senior U.S. official told Reuters afterwards that Trump had not ruled out a deal, but not until Ukraine was ready to have a constructive conversation.
For Denys Alyoshin, chief strategy officer of UkrLithiumMining, an agreement would be a step in the right direction because U.S. engagement makes Ukraine less vulnerable to Russian aggression in the longer term, he said.
Security Guarantee Essential
But without some form of Western security guarantee developing the Polokhivske lithium deposit would be tough, he said. The deposit – one of the largest in Europe – is located just 240 km (149 miles) northwest of the frontline with Russia.
“Before the war broke out, I had a lot of commercial negotiations with … investors who were interested in the project,” Alyoshin told Reuters. “But when the war started … a rational CEO would not go to a country where there is a war, they would go to Zimbabwe, Canada or Africa.
There are many places to go where there is no war.”
Despite repeated requests from Zelenskyy, the Trump administration has offered Kyiv no security guarantee.
That has raised doubts over the commercial feasibility of developing deposits of rare mineral resources, used in high-tech devices and batteries, given the risks of a return to war even if a ceasefire is agreed with Russia this year.
Draft Minerals Deal
A draft of the minerals deal, reviewed by Reuters, contained reassuring language but no guarantees of security. It focused instead on the creation of a joint U.S.-Ukraine managed “Reconstruction Investment Fund” to which Kyiv will contribute 50% of revenues of future monetization of state-owned natural resources.
Furthermore, the terms of the deal are broad and further negotiations will be needed to pin down details, four experts told Reuters.
Even if a lasting peace returns to Ukraine, UkrLithiumMining needs to raise $350 million and requires at least 1.5 years to conduct a feasibility study before it can start building a mine and enrichment plant, Alyoshin said.
“It means we will be able to reach steady stage production … it can be 2029.”
The next U.S. presidential elections are due to take place in 2028, and Trump, the champion of minerals cooperation as a means of securing peace, would be constitutionally barred from running again, having served one term already.
However, seven mining executives and industry analysts told Reuters that Alyoshin’s timeline is optimistic. Exploration periods are typically four years; a feasibility study would take another year before the construction of a processing plant can even begin.
Ukraine’s Outdated Lithium Data
“The reality is that most lithium deposits in Ukraine were identified in the Soviet era and we haven’t had any real updates or exploration for many years,” said Federico Gay, analyst at Benchmark Mineral Intelligence (BMI), a London-based specialist information provider for the supply chain of lithium-ion batteries used in electric vehicles.
“Even if everything stacks up, it would take a minimum of eight years for the Polokhivske deposit to be developed to the stage where it is producing usable lithium,” he said.
Huge Investment Needed
Moreover, the deposit is deep and may require up to $800 million just to construct the mine and concentrator, said Gay, who added that another $1 billion investment would likely be needed to produce the lithium compounds needed for batteries.
Despite the challenges, Alyoshin said his company eventually planned to produce about 1.5 million tonnes of raw ore a year and process that into 300,000 tonnes of petalite concentrate – a more lithium-rich substance.
With additional investment, Alyoshin added the concentrate could be further refined to produce 22,000 tonnes of battery-grade lithium carbonate.
The specifics of planned production and processing timelines at the Polokhivske deposit have not been reported previously.
(With inputs from Reuters)
