The rare earth shake-down
Who owes whom what
Today the President of Ukraine will meet President Trump and to much fanfare they will likely sign an agreement relating to the creation of a Ukrainian Reconstruction Investment Fund (RIF). Various drafts of the agreement have been floating around, and some media commentators have picked apart the very vague terms. I can’t get over the feeling that this process is performative theatre for the following reasons:
· The amount of Western funding (EUR 380 billion in total) provided to the Ukraine dwarfs the size of the Ukrainian economy (around EUR 180 billion at current prices).
· Ukraine is already significantly in debt with around USD 170 billion in public debt.
· Ukraine doesn’t have any meaningful reserves of rare earth minerals.
These facts combined suggest that U.S. and other taxpayers will not see any meaningful recovery in the government funds provided to Ukraine, doubtless the people signing the agreement understand this reality.
The draft agreement is vague and envisages that a further and presumably more meaningful document will be signed down the line. The U.S. contribution to RIF is not specified, but based on President Trump’s comments it appears that he sees this as a mechanism to recover funding already provided by the U.S. government. He has repeatedly mentioned the figure of USD 350 billion of U.S. government funding provided to Ukraine although there is absolutely no basis in fact for this number.
The U.S. government has a dedicated website which aggregates all of the funding provided via various branches of the government which shows USD 182.7 billion of appropriations1. This figure is slightly higher than the amount of USD 174 billion appropriated by Congress under five bills passed between 2022 and 20242. The detailed breakdown of the USD 182.7 billion figure includes a lot of funding which is actually spent in the United States and never makes it to Ukraine, primarily the cost of restocking the U.S. military.
The Kiel Institute has created a definitive tracker of all government funding provided to Ukraine from different countries, which excludes money that is spent in the host country. They measure money that effectively ends up in Ukraine. They show a total of EUR 382 billion in allocations for humanitarian, financial and military assistance combined. From the total of EUR 382 billion, EUR 119 billion related to the United States and EUR 203 billion related to the EU. A summary of their data is shown below.
These numbers and also the official U.S. numbers suggest that President Trump’s demands for USD 350 billion are extortionate. There is also no basis to claim that the United States has had to spend more than Europe on the conflict. The European figures also show that the European Council spends a lot more than member states proving that Europe is rapidly becoming a federation.
The total funding provided is more than two times the size of the entire Ukrainian economy, there is no way that this money can be repaid, and taxpayers will need to understand that billions of euros have been blown-up, consumed or gone missing. Almost all the funding has been provided in the form of grants and transfers, only a small percentage has been provided by way of loans mainly via multilateral institutions like the IMF.
Ukraine is already heavily indebted with public sector debt of around USD 170 billion in February 2025, equivalent to around 100% of GDP. The government and state-owned enterprise Naftogaz Ukraine have worked through various debt restructurings. The debt burden is expected to go up in line with large government deficits in the near term.
There has been a focus on rare earth metals which are seeing increased demand as the world moves to low carbon energy sources. Ukraine’s exact resources are considered to be state secrets, but the U.S. Geological Survey does not even show Ukraine in the 15 most significant counties for rare earth minerals3. The idea that Ukraine could act as a meaningful supplier in the event of a trade war with the world largest supplier, China, is for the birds. Press reports indicate there are no meaningful exports of rare earth minerals from Ukraine. Whatever rare earth minerals there are in Ukraine, their monetisation as undeveloped reserves could not be expected to generate much income relative to a USD 350 billion ask.
Recent versions of the RIF document acknowledge that any amounts paid in by the Ukrainian to RIF exclude current projects which will be required for servicing the large existing debt. The scope of the agreement also covers minerals, hydrocarbons, oil etc. It is important to note that Ukraine is overall a net importer in most commodity categories and has a very large surplus only in grain exports. License rounds for oil and gas exploration areas generated little interest in 2019 with some blocks not receiving any bids at all4. Five concession rounds for oil and gas exploration and production licenses generated income of USD 14 million and it would take twenty-five thousand years to get to USD 350 billion at that rate.
Conclusion
It is hard to know why President Trump is throwing around these falsified figures of USD 350 billion, whether this is a cheap negotiating trick, or an attempt to generate headlines? It is hard to imagine that he doesn’t know that the U.S. has apportioned USD 182.7 billion for Ukraine. Likewise, his claims that the U.S. has put in more than Europe are false. It must be irritating for the Ukrainians, Europeans and probably many people within the U.S. Administration to listen to these false claims.
The RIF agreement seems fanciful given the enormous amounts of money transferred to the Ukraine relative to the size of its economy and given its already large debt burden. The idea that large amounts of money will become available to refund the American taxpayers’ EUR 119 billion funding (using the Keil data) seems to be unrealistic. Possibly this is a PsyOp to enhance President Trump’s tough nut image fighting for the American taxpayer to recover money. It is also relevant to understand that the Trump Administration has just presented a Federal budget which shows no real reduction in deficits which remain at around USD 2 trillion per year through to 20355.
I don’t know which is worse, “conservative” politicians pretending to recover taxpayer funding or Leftists politicians boasting about how much taxpayer money they have transferred to Ukraine. The Leftist seem to believe that the amount of taxpayer money they send positively reflects upon their virtue and their commitment to democracy.
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Alex Kriel is by training a physicist and was one of the first people to highlight the flawed nature of the Imperial COVID model, he is a founder of the Thinking Coalition which comprises a group of citizens who are concerned about Government overreach (www.thinkingcoalition.com)
https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-rare-earths.pdf
https://www.congress.gov/bill/119th-congress/house-concurrent-resolution/14/text
I’m extracting two words from this which I think sum up succinctly what’s happening - “performative psyop”!!
Good to see some hard numbers on this. My understanding is that the US fights/funds wars to release tax payers money to corporate interests so any money Trump can recoup is a bonus but they don't really need to get it all back.