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The world is becoming increasingly complex and volatile. How can we make sense of it all? I'm Richard Engel. And I'm Yalda Hakim. And we're the top international correspondents at NBC News and Sky News. And we present Sky News' latest podcast. The World. Each week we'll cut through the noise to guide you through the week's global events.
And explain to you why what happens out there matters to you wherever you are. Listen now to The World with Richard Engel and me, Yalda Hakim, wherever you get your podcasts. So we're asking for... rare earth and oil anything we can get but we feel so stupid here's europe and you know it affects europe it doesn't really affect us except we don't
Donald Trump wants his pound of flesh, or perhaps more accurately, the hundreds of thousands of tons of minerals and ore that lie beneath Ukraine's soil. And I suppose for him it is a pretty straightforward calculus. We supported you, now it's time for payback. The threat behind that, of course, being a complete withdrawal of American support, something that would prove fatal to Vladimir Zelensky's resistance to Putin.
I suppose that is why the Ukrainian president is looking for security guarantees in return for any access to what are Ukrainian assets. Meanwhile, nations around the world are queuing up to keep the US president on site. Keir Starmer announcing an increase in defense spending to 2.5% of GDP can be seen in the same light. A deal looks likely.
But what is it that Ukraine has that Donald Trump so desires? Our economics editor and resident materials analyst Ed Conway is back on The Daily. Ed, what do we actually know about this deal? Gosh, well, not as much as you might have thought from looking at all of the coverage about it, because there's been a lot of stuff leaked. But as for definitive information, that's kind of harder to come by. What we do know just kind of from listening to...
Donald Trump, listening to some of his advisers, is that last September, Vladimir Zelensky went to Trump Tower. And spoke to Donald Trump. And one of the things he said, I guess, kind of expecting that there was going to be this question about, OK, how much money are we going to get back? Getting ahead of that, Zelensky basically said, listen, we've got loads of critical minerals and rare earths under the... ground in Ukraine and why don't we, as part of a deal...
try and arrange some sort of a structure whereby America invests in some of those critical minerals and gets a certain amount of the proceeds back. I think both sides kind of make out. That's kind of where things started. And that then turned into... Scott Besant, the Treasury Secretary, just recently going across to Ukraine with a piece of paper saying, listen,
if you want to have a peace deal, then you need to sign away 50% of the rights to all of your rare earths and critical minerals for years and years and years. And Donald Trump has also separately said, well, they've got a lot of rare earths. I would like, and they've more or less promised, about $500 billion worth of that stuff in the future. And I would see that as a good kind of quid pro quo for the money that the US has put in. But I think, you know, you've got to...
in a way, take a step even further back than all of this and remember that, you know, what is Donald Trump into? He's into deals. He's into being able to kind of come away from whatever negotiation he can go into and say, look, I got that out of that person. It was what I wanted. They didn't necessarily want. want it, but look, I got it. And it turns out that in this case, the thing that he seems to be quite fixated on is Rare Earths. But the punchline to all of this is...
Looking actually at the mineral resources in Ukraine, and I've spent quite a lot of time doing this. Yes, in preparation for your book, Material World. We had to get that in at some point. Sorry, no, it wasn't intended to be a plug, but thank you. But...
I spent a lot of time looking at Ukraine's minerals. And actually, you know, there are quite a lot of minerals there. There's a lot of coal, a lot of iron ore as well, things like titanium. There's some good refineries turning bauxite into alumina, which is the stuff that then goes into aluminium. So there's lots of stuff in terms of minerals.
There is not much, if any, real rare earths. What do you mean when you say rare earth minerals? This is another thing to have in your head and I don't want to sound too pedantic about this. A lot of people say, oh, rare earths. What they are kind of thinking about is anything that sounds a little bit sexy. They're thinking about, you know, maybe they're thinking about lithium. They're maybe thinking about cobalt. Actually...
Technically, if you're a geologist, or to be honest with you, anyone who looks at the periodic table, rare earth is something very specific. It's a group of, I think, about 17 elements that you find at the bottom of the periodic table in their own little box. And it's things like neodymium.
These elements, it's not lithium. It's not cobalt. It's not manganese or any of those other things that people talk about when it comes to car batteries. Rare Earths is a very specific and small section of the periodic table. I think the best way to think about them is it's like a kind of...
of condiment that you sprinkle into other kind of substances and it just makes them better. So like steel, you've got certain types of rare earths. I think selenium is one of them. And you sprinkle a bit of selenium in there and it makes the steel more powerful. Same thing with neodymium.
OK, so you put neodymium along with boron and I think iron and you get an incredibly powerful magnet. A lot of them are used for like military applications. And this is why Trump is particularly excited about this, because look at the global supply of them.
majority of this stuff comes from China. And so it's about trying to secure the supply chain. But the place where you and I will have and anyone listening will directly now probably be in contact with some rare earths is in earphones. So if you've got little earphones these days.
they have those little neodymium iron borer magnets in them. And most of that comes from China at the moment. So what, is Ukraine swimming in this stuff? No, that's the problem. There is one mine which has been known about for ages. It's like an old Soviet mine. have some rare earths. But here's the thing. The tricky thing with rare earths, it's not so much identifying in the ground. Actually, that's the other thing you need to know about them. They're not that rare.
They're not that rare. The name is basically a rubbish name. They're not that rare. There's rare earths in pretty much every pound of soil you pull out of the ground. It's just they're in tiny, tiny quantities. And the difficulty with rare earths is actually refining.
because they're just hard to refine. And refining them involves a lot of energy and it involves creating a lot of waste. Talk us through that process. Refining something like copper and iron, that's hard. Refining rare earths is really, really hard. When I say hard, it just takes... a lot of energy. It creates a lot of pollution, sometimes radioactive pollution. So the reason that the vast majority, 90% of the world's rare earths,
are made in China is because China is the most relaxed place about creating all this pollution and has the cheapest energy because it's using coal-fired power stations. So you see, there is no mother load in Ukraine that can solve all of that. I think...
Probably the conversation we're having right now is a few leagues more sophisticated than the conversations I imagine that Donald Trump and Zelensky were having. I imagine what happens, and I'm guessing obviously, is that Zelensky said, we've got these rare earths. Donald Trump said, yeah, I'll have me some.
them, aware of the fact that China controls most of the global supply. And the kind of more sophisticated questions about, okay, actually, does Ukraine have any rarest? Key answer here is, as far as anyone can make out, not really. I mean, there's a little bit. in terms of the global scale of these things, just getting the stuff out of the ground.
It doesn't have that much. The majority is in other places like Australia and China and America. America has more rare earths than Ukraine. I was just going to ask you, I mean, you're talking about China being a place in which these materials can be extracted quite easily. I mean, Donald Trump's fond of deregulation.
He's no environmentalist. I mean, if there are these materials, these minerals available in the United States, well, first thing you should be doing is dig, dig, dig, baby, isn't it? Yeah. Like I say, it's not just about the digging. It's more about the refining. So America has this refining. which has been making rare earths for quite a long time. I think it's called Mountain Pass.
And it's been on and off again for a long time. And the problem isn't just the fact that it's quite a dirty process. It's that it's quite expensive. And China is just able to do it cheaper. So the pragmatic reality here is, you know, like, I love...
critical minerals. And I love rare earth and I love all of this conversation. And this stuff is all really important. And it's true. We are moving into this era now where batteries are more important, where getting hold of chemical engineering is going to really matter a lot.
building revolution where a lot of stuff is being built and you need a lot of the minerals for that. But we do, I think, sometimes just get overexcited about this mysterious mother load of minerals. It's not like it's barren. You know, there's lots of...
minerals in there, but nor is it kind of world-changing amounts that we're talking about. And I would be amazed if it could get up to the 500 billion that Donald Trump is talking about. It's very hard to make quite that much money out of this stuff because it's relatively niche. this stuff in Ukraine? I suspect that's a killer question. Well, if you're talking about the most mineral-rich area, it is. Guess what? It's like Donbass.
It's the areas that actually are under Russian occupation at the moment. And that gets to the kind of more interesting question about the extent to which this benefits both sides. I mean, I think part of the attraction, I think, for Zelensky is to say, listen, if you co-invest, then you're putting...
American investment and money into this area that is possibly contested. And you're trying to ensure that there is even more deterrent for Russia in the future. There's some lithium resources that are slightly further inland. But again, even if you include those lithium resources and are as optimistic as possible about how much you can get out of the ground and turn into the stuff that goes into batteries.
Ukraine's not a big player. It's bigger than most places in Europe, but that's because Europe doesn't have all that much in the way of lithium. Compared with Chile, compared with Argentina, compared with America, definitely it's the case that Ukraine has been...
a decent place to try and find these minerals. But it does look like it's still mostly the traditional stuff that really matters there, that's making money there. It's coal. It's a lot of coal mining. It's a lot of iron ore mining. It's a bit of titanium and a few other things besides. Cut graphite.
another big thing. It's never going to be the world's biggest graphite producer. And guess where the world's biggest graphite refiner is? So not just getting it out of the ground, but turning it into finished graphite, it's China. The phone that all of us has.
That has some graphite in it. Most of that has almost certainly come from China. And that's because the Chinese are kind of just much more relaxed than we are about just burning a lot of this stuff and spewing it into the environment. Isn't this all eminently sensible then from Donald Trump?
To what extent is this a kind of semi-colonial enterprise of the likes that we saw in Congo with Belgium? Is it another country going in and trying to take the resources, to pillage the resources of a nation? And I think that's a chewy, interesting conversation that perhaps that's a whole other episode. The Americans would say, listen, we want to co-invest and we want some payback for all of this money that we have sent to Ukraine.
people would say, are you kind of strong-arming them? And I think there's strong arguments on both sides. Donald Trump's calculus here, as mentioned before, is we've given you loads of stuff. We want some of it back at the very least. I mean, how fair is that? The United States hasn't been the only... country that's been supporting Ukraine, has it? No, if you take all of Europe together, Europe has given more money to Ukraine.
That includes the UK, so the UK plus the EU. The total amount so far that's actually been handed over is about, for America, it's about 114 billion euros. I'm just doing it in euros so we can compare. And then for Europe, it's 132 billion. And America's given slightly more when it comes to the military aid, but Europe's given quite a bit more when it comes to the other bits of aid, so financial aid, humanitarian aid. Some of that money the EU is expecting back in the form of some repayment.
loans, although it's over a period of like decades and decades and decades, so not till towards the end of the century. And it's about 30 billion of that kind of hundred and something, 130 billion or so. So some of that EU money is expected back. The American money doesn't have...
that same explicit, you know, we need this back by a certain time. Although there was always, I guess, an expectation amongst everyone that at some point America would come back for this. And bear in mind, that's kind of been the way of things every time it's gone into a war. So, I mean, like the first...
World War, America got pretty annoyed about with Britain afterwards and wanted a lot of money back from the UK and so you had post-war loans actually, some of which were only paid off relatively recently. Same thing after the Second World War as well. The principle is not totally unfamiliar. But obviously it's being pursued with a kind of aggression that people find unsettling. But I think the other bit of context that's really important, Neil, is to say it is a lot of money.
But America spent considerably less money on this than, for instance, it did in the first Gulf War. Actually, every single country, including Germany, including the UK, has given less money to Ukraine. in this particular conflict than it did to support the Kuwaitis in 1991. The sums here have not been quite as generous as you might have thought listening to the politicians. Let's just try for a second to work out what is really going on here. I mean, report...
recently that when Vladimir Zelensky met, man, you mentioned Scott Besson, Trump's envoy, that ended up in a slagging match, a shouting match behind closed doors. But as you said right at the very beginning, this was a Ukrainian idea in the first place. Isn't it entirely possible that it's the Ukrainians that are pulling a fast one? Well, I mean, very possibly.
It's quite possible that Ukrainians have said, listen, we've got lots of this exciting stuff. And it's excited the, you know, the president. They've dangled the shiny shiny in front of Donald Trump. Yeah, president-elect, now president. And he's got very into the idea of rare earths. And you listen to him in his press conferences. He keeps saying rare earths, rare earths, $500 billion. Seemingly unaware of the fact that...
it just doesn't add up. There is not $500 billion of rare earths in Ukraine, or for that matter, I think almost any other country in the world. But I think he also is conscious. Leaving aside that, I think people are very keen to try and paint him as ignorant. There's a really profound thing that I think he's twigged, which other people were a bit nervous about, which is to say that the American people just don't like the idea of paying
endless amounts into a certain conflict zone for no payback. And so everyone wants to come out of this feeling like something has been retrieved. And in a country like Ukraine, what is it that they feel that they can retrieve? I mean, maybe it's minerals because it's not going to be data centers right now. I think that...
He, like for instance, FDR and Truman and all these American presidents in the past have kind of come out of these wars and thought, well, I've now got Congress breathing right down my neck to ask. can we get some money back because we just don't support all of these enterprises overseas? And that's kind of what Trump is doing. The reason that...
I suspect that it's just a negotiation and it's bumpy and there's going to be stuff behind the scenes. But I mean, in a way, all of this stuff, to some extent, is noises off because we still need to find out what Russia is actually willing to commit to. We need to find out whether... Ukrainians are kind of happy to go into negotiations in this way. And we need to find out what the potential borders are going to be. And I suspect this is kind of the starting.
gun for a lot more talks because there's so many other bits to be dealt with. In a few years' time, we'll probably be looking back and be going, oh, this critical mineral stuff, it was all a bit fluffed up, wasn't it? Perhaps when it comes to Ukraine, but notwithstanding everything that you've just said...
over the next few decades, isn't it the case that these materials are going to become scarcer, that there is going to be increased demand for them as we decarbonise our economies and all the rest of it, that there will be geopolitical arguments, big-scale geopolitical... arguments and perhaps even, did I say it?
wars over access to these materials? Well, definitely. These are really important minerals. And actually, it's things like copper as well that matter enormously. It's the boring ones that matter just as much, if not more, than those kind of sexy ones. If we are going to...
I mean, there's a whole conversation about net zero, which again is for another day. But if we are going to decarbonise and leaving aside the whole net zero conversation, we're in an industrial revolution right now. We're building loads of stuff. It's quite exciting. There will be bumps in the road. There might well be.
conflict, there's going to be massive changes in the nature of global politics as a result of this. Middle East becomes less important. South America becomes more important because that's where the lithium is. And yeah, the fact that this is at the epicenter of this conversation, I think...
says something about everyone's consciousness of this being a big issue. Ed, thanks very much indeed. That's a lot for this edition of The Daily. Do make sure and give us a follow. It's just a click on your podcast app. We're back again tomorrow. The world is becoming increasingly complex and volatile. How can we make sense of it all? I'm Richard Engel. And I'm Yalda Hakim. And we're the top international correspondents at NBC News and Sky News. And we present Sky News' latest podcast.
the world. Each week we'll cut through the noise to guide you through the week's global events and explain to you why what happens out there matters to you. wherever you are. Listen now to The World with Richard Engel and me, Yalda Hakim, wherever you get your podcasts.