---
title: "Why Ukraine's minerals are Iraq's oil all over again"
url: https://modern-mba.com/case/ukraine
sector: "Finance"
sector_url: https://modern-mba.com/sector/finance
aired: 2025-03-22
published: 2026-08-25
updated: 2026-08-28
reading_time_minutes: 15
charts: 15
video: https://www.youtube.com/watch?v=NbvPSqAXC1k
author: "Yishan Lin"
author_url: https://www.linkedin.com/in/yishanlin/
publisher: Modern MBA
license: "© Modern MBA, all rights reserved. Quote and cite with credit and a link; republishing needs written permission."
---

# Why Ukraine's minerals are Iraq's oil all over again

Thirty-five years ago America fought a war to keep oil flowing out of the Persian Gulf, and it worked. Then it spent two decades in Afghanistan and Iraq, and Chinese companies walked away with the copper and the oil contracts. Now Ukraine says it is sitting on $13 to $15 trillion of minerals and has offered a share to the United States for continued support - the same offer Kabul made in 2010, when the Pentagon valued Afghan deposits at nearly $1 trillion and called the country the Saudi Arabia of lithium. This case study traces why that deal produced nothing, why Iraq produced less, and why Ukraine's minerals are the third run of the same play.

## Key figures

- **17.9 years** — Average time from mineral discovery to a producing mine
- **40%** — Of the claimed deposits under Russian occupation or landmines
- **1960s** — Date of the last surveys behind the $15 trillion estimate

## The argument

America has signed this deal twice before and lost both times to the same competitor. A 2010 Pentagon memo valued Afghanistan's minerals at nearly $1 trillion; the Mes Aynak copper concession went to a Chinese state conglomerate for $3.4 billion over American, Canadian, and European bidders. In Iraq, after two American wars, Chinese companies hold four times the American share of licensed oil and gas. Washington supplies the security; Beijing signs the contract afterwards.

The difference between the war that worked and the ones that did not is what they were for. The Gulf War had a commodity as its objective and a 42-country coalition finished in six months. After 9/11 the goal shifted to terrorism and democracy, which has no completion condition, and America spent twenty years in two countries whose assets it never acquired. The $500 billion clause in the Ukrainian deal is lawmakers insisting on getting something back this time.

And Ukraine is a weaker version of the same bet. The $15 trillion counts deposits rather than reserves, rests on Soviet surveys nobody has repeated, and about 40% sits under Russian occupation or landmines. A mine opened in the 2020s took an average of 17.9 years from discovery to production. Even if every ton were real and reachable, the minerals are the wrong ones — America's exposure to China is rare earths, gallium, and yttrium; Ukraine has titanium and manganese.

## Charts

### America fights, China signs

Share of licensed Iraqi oil and gas projects held by each country after two American wars. China also took 10 of 13 projects in one recent round.

|  | Percentages |
| --- | --- |
| China | 7.27% |
| United States | 1.82% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-1 · Sources: https://modern-mba.com/case/ukraine#sources

### The leverage that replaced deployment

Active US sanctions designations. A 900% rise in twenty years, as economic pressure took over from the military kind after Iraq and Afghanistan.

|  | Counts |
| --- | --- |
| 2000 | 912 |
| 2005 | 3,000 |
| 2010 | 4,900 |
| 2015 | 6,800 |
| 2021 | 9,421 |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-2 · Sources: https://modern-mba.com/case/ukraine#sources

### How China bought the position instead

Chinese capital as a share of all foreign direct investment into Africa. Financing the roads, hospitals, and mines rather than bidding for the output.

|  | Percentages |
| --- | --- |
| 2003 | 1% |
| 2006 | 3% |
| 2008 | 6% |
| 2010 | 4% |
| 2012 | 7% |
| 2014 | 4% |
| 2016 | 8% |
| 2018 | 12% |
| 2020 | 11% |
| 2022 | 4% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-3 · Sources: https://modern-mba.com/case/ukraine#sources

### What still makes any of it enforceable

Share of the international economy settled in each currency. The dollar is the instrument behind every sanction and every deal America signs.

|  | US dollar | Chinese renminbi |
| --- | --- | --- |
| FX transactions | 88% | 7% |
| Global reserves | 57% | 2% |
| Export invoices | 54% | 4% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-4 · Sources: https://modern-mba.com/case/ukraine#sources

### The decade that broke the economy

Annual GDP growth after leaving the Soviet Union. Nine straight contractions, including a 23% fall in one year — the worst post-Soviet decade in Europe.

|  | Percentages |
| --- | --- |
| 1988 | 3% |
| 1989 | 4% |
| 1990 | −6% |
| 1991 | −9% |
| 1992 | −10% |
| 1993 | −14% |
| 1994 | −23% |
| 1995 | −12% |
| 1996 | −10% |
| 1997 | −3% |
| 1998 | −2% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-5 · Sources: https://modern-mba.com/case/ukraine#sources

### Thirty years to get back

Annual GDP in billions of dollars. Ukraine fell from $80 billion to $32 billion in a decade, and by 2019 had still not durably passed where it started.

|  | US dollars |
| --- | --- |
| 1991 | $77B |
| 1995 | $48B |
| 1999 | $32B |
| 2003 | $52B |
| 2007 | $149B |
| 2011 | $169B |
| 2013 | $191B |
| 2015 | $91B |
| 2019 | $154B |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-6 · Sources: https://modern-mba.com/case/ukraine#sources

### The poorest country in Europe

GDP per capita in 2019. Ukraine sits below Moldova, Kosovo, and Albania, at roughly a fifth of Poland's — before the invasion, not after.

|  | US dollars |
| --- | --- |
| Poland | $15,874 |
| Romania | $12,992 |
| Bulgaria | $9,838 |
| Montenegro | $8,909 |
| Serbia | $7,755 |
| Belarus | $6,837 |
| Albania | $5,460 |
| Kosovo | $4,416 |
| Moldova | $4,405 |
| Ukraine | $3,619 |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-7 · Sources: https://modern-mba.com/case/ukraine#sources

### Nobody would fund it

Foreign direct investment as a share of GDP, Ukraine against the European Union average. Capital never arrived at the scale a mining industry needs.

|  | Ukraine | European Union |
| --- | --- | --- |
| 2001 | 2% | 5% |
| 2005 | 9% | 6% |
| 2007 | 7% | 11% |
| 2011 | 4% | 4% |
| 2013 | 2% | 4% |
| 2015 | 6% | 0% |
| 2017 | 3% | 4% |
| 2019 | 4% | 3% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-8 · Sources: https://modern-mba.com/case/ukraine#sources

### The economy Ukraine actually built

Agricultural production in millions of metric tons, 2019. Ukraine competes in wheat and barley; the United States produces roughly ten times the corn.

|  | Ukraine | United States |
| --- | --- | --- |
| Corn | 36M | 354M |
| Wheat | 29M | 53M |
| Barley | 9M | 3M |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-9 · Sources: https://modern-mba.com/case/ukraine#sources

### Governance is part of the geology

Corruption perceptions score in 2019, where lower is worse. A mine needs fifteen years of stable permitting before it produces anything at all.

|  | Counts |
| --- | --- |
| Singapore | 85 |
| Japan | 73 |
| USA | 69 |
| China | 41 |
| India | 41 |
| Thailand | 36 |
| Brazil | 35 |
| Pakistan | 32 |
| Ukraine | 30 |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-10 · Sources: https://modern-mba.com/case/ukraine#sources

### What America is short of

Share of US consumption met by imports, 2018–2023 average. The near-total dependencies are rare earths, bismuth, titanium, and antimony.

|  | Percentages |
| --- | --- |
| Rare earths | 95% |
| Bismuth | 95% |
| Titanium | 83% |
| Antimony | 83% |
| Vanadium | 72% |
| Cobalt | 72% |
| Nickel | 51% |
| Magnesium | 50% |
| Germanium | 50% |
| Lithium | 38% |
| Hafnium | 29% |
| Beryllium | 12% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-11 · Sources: https://modern-mba.com/case/ukraine#sources

### And how much of it comes from China

Share of US supply sourced from China by mineral, 2020–2023. This is the dependency the deal is meant to address, mineral by mineral.

|  | Percentages |
| --- | --- |
| Yttrium | 94% |
| Rare earths | 70% |
| Bismuth | 67% |
| Magnesium | 63% |
| Antimony | 63% |
| Arsenic | 52% |
| Graphite | 43% |
| Tungsten | 35% |
| Germanium | 26% |
| Tantalum | 24% |
| Gallium | 21% |
| Fluorspar | 4% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-12 · Sources: https://modern-mba.com/case/ukraine#sources

### China's share of world production

Percentage of global output China controls, 2020–2023. Built from the 1990s by accepting environmental costs Western producers would not.

|  | Percentages |
| --- | --- |
| Gallium | 97% |
| Magnesium | 89% |
| Mercury | 88% |
| Tungsten | 84% |
| Bismuth | 82% |
| Graphite | 78% |
| Rare earths | 70% |
| Silicon | 69% |
| Germanium | 68% |
| Antimony | 55% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-13 · Sources: https://modern-mba.com/case/ukraine#sources

### Where American cobalt actually comes from

Share of US net cobalt imports by supplier, 2019–2022. Ukraine's 9,000 tons of central deposits do not appear, and would not displace Norway.

|  | Percentages |
| --- | --- |
| Other | 35% |
| Norway | 25% |
| Canada | 15% |
| Finland | 13% |
| Japan | 12% |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-14 · Sources: https://modern-mba.com/case/ukraine#sources

### Seventeen years to first production

Average time from discovery to a producing mine, by decade of start-up. The delay is in exploration and permitting; construction has got faster.

|  | Durations |
| --- | --- |
| 2005–2009 | 12.7 yrs |
| 2010–2014 | 16.4 yrs |
| 2015–2019 | 17.5 yrs |
| 2020–2023 | 17.9 yrs |

Source: Modern MBA, “Why Ukraine's minerals are Iraq's oil all over again”, aired March 2025. Chart: https://modern-mba.com/case/ukraine#chart-15 · Sources: https://modern-mba.com/case/ukraine#sources


## Takeaways

1. America valued this exact prize once before. In 2010 an internal **Pentagon memo put Afghanistan's untapped minerals at nearly $1 trillion** and suggested the country **could become the Saudi Arabia of lithium** — the same framing, fifteen years earlier.
2. It went to China. **China Metallurgical Group bid $3.4 billion for the Mes Aynak copper deposit**, beating rivals from Canada, Europe, Russia, the United States, and Kazakhstan, and planned to extract **11 million tons of copper, a third of all known Chinese reserves**, over 25 years.
3. The reason America lost it is the reason it will lose Ukraine's. **The United States was spending hundreds of billions fighting the Taliban and Al Qaeda while China was buying the raw material** — the superpower focused on security, the competitor on commerce.
4. Iraq is the same story with a longer receipt. **Chinese companies hold 7.27% of shares in licensed Iraqi oil and gas projects against 1.82% for American companies**, import **1.18 million barrels a day, about 35% of Iraqi production**, and were **awarded 10 of the 13 projects** in one recent licensing round.
5. The Gulf War worked because the objective was a commodity, not a government. **A 42-country coalition liberated Kuwait in six months**, restored the oil flow, and left — with the Middle East producing over a third of world oil and holding nearly half of proven reserves.
6. The turn came in 2001. **After 9/11 the mission shifted from oil and economics to terrorism and democracy**, and Afghanistan is landlocked with an economy of agriculture and opium — a country with no mining expertise beyond coal that was still importing its electricity.
7. The headline number is a deposit estimate, not a reserve estimate. **Ukraine claims a third of Europe's lithium at 500,000 tons of deposits** — but a deposit is rock containing a mineral and a reserve is rock you can extract at a profit, and only a subset of any deposit ever becomes the latter.
8. The geology behind the claim is sixty years old. **There have been no further surveys since the 1960s and 1980s**, so the diversity, quantity, and grade underpinning a $15 trillion valuation rest on Soviet-era fieldwork that has never been repeated.
9. Roughly **40% of the deposits counted in that estimate sit in eastern Ukraine**, on land currently occupied by Russia or seeded with landmines — which is to say the most valuable part of the claim is the part nobody can reach.
10. Mining is slower than the deal assumes by an order of magnitude. Mines opened in **2020–2023 took an average of 17.9 years from discovery to production**, up from **12.7 years for those opened in 2005–2009** — and the increase is in exploration and permitting, not construction, which has actually got faster.
11. The minerals Ukraine has are not the minerals America lacks. US import reliance is near-total in **rare earths and bismuth at 95%, titanium and antimony at 83%** — but it is only **12% reliant on beryllium**, of which **60% of the world's supply is already in the United States**.
12. China's grip is on a specific and different list. It supplies **94% of America's yttrium, 70% of its rare earths, 67% of its bismuth** and holds **97% of global gallium production, 89% of magnesium, 84% of tungsten, and 78% of graphite**. Ukraine is not a meaningful producer of any of them.
13. The deal's headline term is unenforceable in practice. **The United States takes the first $500 billion from new mines** — but no operator has been named, no survey commissioned, no financing arranged, and no insurer identified for extraction inside an active war.
14. The country never had the capital to develop any of this. **Foreign direct investment ran as low as 1% of GDP through the 2010s**, and Ukraine has repeatedly trailed the European Union average on the same measure.
15. The governance record compounds the geology. Ukraine scored **30 on Transparency International's corruption index in 2019**, the worst in the comparison set — which matters when a mine requires fifteen years of stable permitting before it produces anything.
16. China solved the same problem with a different instrument. It built **roads, hospitals, and the mines themselves in the Congo in exchange for a 68% share of lithium and cobalt**, and went from under **2% of sub-Saharan Africa's external public debt in 2005 to nearly a quarter** today.

## Common questions

### Has America made a minerals deal like this before?

Twice, and lost both to China. In 2010 a Pentagon memo valued Afghanistan's untapped minerals at nearly $1 trillion and floated the country as the Saudi Arabia of lithium; the Mes Aynak copper concession went to China Metallurgical Group for $3.4 billion, ahead of American, Canadian, European, and Russian bidders. In Iraq, after two US wars, Chinese companies now hold 7.27% of licensed oil and gas project shares against 1.82% for American companies, and won 10 of 13 projects in a recent licensing round.

### Why did the Persian Gulf War succeed where Iraq and Afghanistan failed?

Because the objective was a commodity rather than a government. Saddam Hussein invaded Kuwait to control regional supply and therefore price - the same logic China applies to minerals now - and a 42-country coalition including neutral Sweden and Norway removed him from Kuwait in six months, restored the oil flow, and stopped. After 9/11 the mission changed from oil and economics to terrorism and democracy, which has no completion condition, and the United States spent two decades in countries whose assets it never acquired.

### Will the US actually get Ukraine's minerals?

The historical pattern says no, and the mechanism is consistent. America supplies the security and absorbs the cost; the extraction contracts are won later by whoever is willing to finance infrastructure and accept political risk over fifteen-year horizons, which has been China in Afghanistan, Iraq, and across Africa. Nothing in the Ukrainian deal changes that - no operator has been named, no survey commissioned since the 1980s, no financing arranged, and no insurer identified.

### Are Ukraine's minerals really worth $15 trillion?

The figure counts deposits rather than reserves, which is the difference between rock that contains a mineral and rock you can profitably extract. Only a subset of any deposit ever becomes a reserve. The surveys behind the estimate were carried out by Soviet geologists in the 1960s and 1980s and have never been repeated, so the grade, quantity, and diversity are all unverified by modern standards. And roughly 40% of what is counted sits under Russian occupation or landmines.

### Would Ukraine's minerals reduce American dependence on China?

Not materially, because the lists barely overlap. American exposure to China is concentrated in yttrium (94% of US supply), rare earths (70%), bismuth (67%), magnesium and antimony (63% each), plus gallium where China holds 97% of world production. Ukraine's headline holdings are titanium, manganese, beryllium, and lithium. The United States is only 12% import-reliant on beryllium and already holds 60% of the world's supply, and its cobalt comes from Norway, Canada, Finland, and Japan.

### How long does it take to open a new mine?

An average of 17.9 years from discovery to production for mines that opened between 2020 and 2023, according to S&P Global. Of that, 13.6 years is discovery and exploration, 2.2 years is waiting after feasibility studies, and 2.0 years is construction. The total has been rising — mines opened in 2005–2009 averaged 12.7 years — and the increase comes from exploration, permitting, and financing rather than building, so it is not a problem capital alone solves quickly.

### What is the US–Ukraine minerals deal?

A proposed arrangement in which Ukraine would contribute half the future revenue from monetizing its natural resources and associated infrastructure to a US-controlled fund, with the United States taking the first $500 billion generated by new mines. It would not draw on revenue from existing mines, oil wells, or other producing assets. The practical difficulty is that no operator, survey, financing, or insurance exists for extraction inside an active war, so the revenue being divided has no identified path to existing.

### Why is Ukraine so poor if it has all these resources?

Because resources in the ground are not wealth until someone extracts them, and Ukraine never had the capital to do it. Foreign direct investment ran as low as 1% of GDP through the 2010s. The post-Soviet collapse took GDP from $80 billion in 1990 to $32 billion by 1999, with a 23% fall in 1994 alone, and by 2019 Ukraine had the lowest GDP per capita in Europe at $3,619 — below Moldova and Kosovo. The economy that did grow was agricultural, not extractive.

### Which minerals does China actually control?

China holds 97% of global gallium production, 89% of magnesium, 88% of mercury, 84% of tungsten, 82% of bismuth, 78% of graphite, 70% of rare earths, 69% of silicon, 68% of germanium, and 55% of antimony. The position was built from the 1990s onward by mining first and dealing with environmental consequences later, which is the cost Western producers were unwilling to accept — the same trade Britain and the United States made during their own industrializations a century earlier.

### How did China secure African minerals?

By financing the infrastructure rather than buying the output. In the Congo it built roads, hospitals, and the mines themselves in exchange for a 68% share of lithium and cobalt. Across sub-Saharan Africa its share of external public debt went from under 2% in 2005 to nearly a quarter today, and Chinese capital reached 12% of all foreign direct investment into the continent by 2018. It is a slower and more expensive route than buying commodities, and it produces a position that cannot easily be outbid.

### Can Ukraine's minerals be mined during the war?

Not the ones that matter most. About 40% of the deposits in the $15 trillion estimate are in eastern Ukraine, either under Russian occupation or in areas seeded with landmines. Beyond the front line, the obstacles are ordinary but decisive: no modern survey since the 1980s, no named operator, no financing, and no insurer willing to underwrite a fifteen-year capital project in a country under active invasion.

### What does Ukraine actually export?

Food, overwhelmingly. Agriculture went from under 2% of exports at independence to over 25% by 2019, overtaking the iron and steel that had led since Soviet times. In 2019 Ukraine produced 36 million metric tons of corn, 29 million of wheat, and 9 million of barley — significant in wheat and barley, though the United States produced roughly ten times as much corn. It is an agricultural economy that happens to sit on unexploited geology.

## Discussion

- America has signed this deal twice and lost both times to the same competitor: Washington supplies the security, Beijing signs the contract afterwards. Why does military presence convert so poorly into commercial access?
- The Gulf War had a commodity as its objective and a 42-country coalition finished in six months. The wars after 9/11 aimed at terrorism and democracy, which have no completion condition. What does that suggest about how objectives should be written?
- A 2010 Pentagon memo valued Afghanistan's minerals at nearly $1 trillion, and the largest copper concession went to a Chinese state conglomerate for $3.4 billion. What is a resource estimate actually worth as a basis for policy?
- Chinese state-backed firms can accept returns and timelines that listed Western companies cannot. Is that an unfair advantage, a different cost of capital, or a different definition of return?
- You advise on the Ukraine minerals agreement. What single term would you insist on, given this record, and what would you expect to give up to get it?

## Sources

Figures from USGS Mineral Commodity Summaries, World Bank national accounts, Transparency International's Corruption Perceptions Index, S&P Global mine development data, World Economic Forum investment figures, and the published terms of the proposed US–Ukraine minerals agreement

---

From [Modern MBA](https://modern-mba.com/). Read this case in full at [https://modern-mba.com/case/ukraine](https://modern-mba.com/case/ukraine), or watch the episode at https://www.youtube.com/watch?v=NbvPSqAXC1k.