US Republican Sen. Lindsey Graham proposed turning the aid package to Ukraine, Israel and Taiwan into a loan, where Kyiv can pay back the US with its vast mineral resources.
In an interview with CBS News, Graham said that “Europeans gave Ukraine $50 billion, 33 of it was a loan,” and that Washington should pursue a similar path as it is “$34 trillion in debt.”
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“Ukraine has minerals, have a lot of resources. Israel has a strong economy. They’d been hurt badly by October the 7th. Taiwan is a pretty rich nation. Why don't we do this make a favorable loan to all three of these allies?” said Graham, meanwhile reiterating Republicans’ stern position on border control, on which the diverging stance between the two parties has borne no fruit.
The $60 billion aid package for Ukraine could be lifesaving for Kyiv as it struggles with munition shortages across the front, which has led to the withdrawal of Ukrainian troops in Avdiivka after months of fierce fighting.
Graham said the idea came from former President Donald Trump, who on Feb. 10 said that aid for Ukraine should not go through unless it’s restructured as a loan.
Ukraine’s mineral reserves
Ukraine possesses one of the largest mineral deposits in Europe, which some have suspected to be the driving force behind Russia’s invasion.
Prior to the full-scale invasion, Ukraine was the fifth largest iron ore exporter in the world at $6.8 billion in 2021; the same year, Ukrainian ilmenite – a mineral used to produce titanium – accounted for about 5 percent of global titanium production.
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Among the vast reserves of minerals included graphite and lithium, where the latter comprised a third of Europe’s reserve with Kyiv planning to utilize it to kickstart its domestic electric car industry.
At present, the combined mineral reserves in Ukraine are worth trillions of dollars – $12.4 trillion alone in occupied territories, according to a Washington Post report.
As the majority of mineral reserves are located in the eastern regions, failing to liberate the occupied territories could also mean seeing Moscow effectively steal a significant portion of resources that could help rebuild the country.
Paying back with minerals
Paying back the loan with minerals, however, is a more nuanced question.
Depending on how Kyiv will have to pay back the loan, be it granting foreign investors control over the deposits or through income generated by selling the end products, the results could be very different for Kyiv.
Even though Ukraine possesses a vast amount of mineral resources beneath its surface, utilizing them – namely to survey, extract and convert the materials – would require international investment and expertise, a direction Kyiv has been pursuing for some time.
Some of the practices could be found in a presentation created by the Ukrainian government, which outlined the main mineral deposits in Ukraine, as well as current and future initiatives to utilize them through international investments.
While Ukraine has a history of extracting and producing iron, other minerals such as lithium remained mostly untapped, and millions of dollars of investment are needed in order to survey the deposits properly and extract them, according to Denys Alyoshin, director of strategic development of UkrLithium Production LLC, in a column for Interfax.
Being able to create and sell the end product – batteries, in the case of lithium – would present the highest economic margin, but Ukraine lacks the ability to do so alone at present.
With that in mind, it is possible that Ukraine will have to relinquish control over the deposits, depending on the terms of repayment set – a decision that could cost Ukraine trillions of dollars in the future.
Preserving lives and the future of the nation in exchange for a significant portion of the nation’s future wealth is an issue Ukraine will have to address if the plans go through.
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