Rare earth set to be deal maker in Russia-Ukraine conflict
- E News
- 6 days ago
- 3 min read
By: Professor Dato Dr Ahmad Ibrahim
The Russia-Ukraine war has been going on for far too long. Much of the global supply chain especially in food and energy was badly disrupted. But with Trump at the White House, it appears like there is an end in sight. But there is a condition, as widely reported in a recent not so tasteful meeting between the two leaders of US and Ukraine. A deal around Ukraine’s big rare earth deposits may be the game changer. It looks like the world’s hunger for rare earths is gaining traction. This is not surprising since much of the advanced AI and New Energy technologies depend on rare earths to effectively function. Not to mention their critical role in military hardware. Chairman Deng Xiao Peng was right. He proclaimed years ago that rare earths would replace oil as the most critical material in the new global economy.
As a result, China has invested heavily in their rare earths business. The country now dominates the world supply. So much so that it sometimes uses rare earths as the bargaining chip with the West. Which explains why the US is desperately looking for new supply sources. Malaysia apparently is home to sizable deposits of rare earths. Turning them into a viable industry for Malaysia’s economy is still a struggle. As usual the politics around rare earths are not helping. The Academy of Sciences Malaysia, ASM, has put together the proposed roadmap to build an industry around rare earths. This can even reduce our economic dependence on oil. Many are hoping this will feature in the coming 13th Malaysia Plan. Many are of the opinion that we should capitalise on the presence of Lynas, the only vibrant rare earths processor outside China. Lynas is an Australian company. But the key technical personnel are all Malaysians.
However, many believe the rare earth deal, or any single economic agreement, is unlikely to bring an end to the conflict in Ukraine on its own. The war in Ukraine is a complex geopolitical issue with deep historical roots, involving territorial disputes, national identity, security concerns, and broader power struggles between major global players like Russia, NATO, and the European Union. While economic factors, including access to critical resources like rare earth elements, can influence geopolitical dynamics, they are just one piece of a much larger puzzle. The core issues must be addressed. The conflict is fundamentally about Ukraine's sovereignty, territorial integrity, and its alignment with Western institutions like NATO and the EU. These issues are not directly tied to rare earth elements or economic deals.
For Russia, the conflict is tied to its broader strategic goals, including maintaining influence in its perceived sphere of influence and preventing NATO expansion. Economic incentives, while important, are unlikely to override these strategic priorities. What is certain is that the war has caused immense human suffering and political polarization. Ending the conflict requires addressing humanitarian concerns, rebuilding trust, and finding a political solution that satisfies all parties—tasks that go far beyond economic agreements. The conflict is embedded in a broader struggle for influence between Russia and the West. Rare earth elements are strategically important for technology and defense, but their role in this conflict is secondary to the larger geopolitical contest.
That said, economic deals, including those involving rare earth elements, could play a role in creating conditions for dialogue or de-escalation. For example, increased economic ties between conflicting parties can sometimes reduce tensions by creating mutual interests. Control over critical resources like rare earth elements could be used as leverage in diplomatic negotiations. Furthermore, post-conflict, rare earth deals could contribute to Ukraine's economic recovery and reconstruction. However, for the conflict to truly end, a comprehensive political solution is necessary, involving diplomacy, compromise, and addressing the root causes of the war. International mediation, confidence-building measures, and a commitment to peace from all sides will be essential. Nonetheless, the value of rare earths to the global economy is undeniable. And it can be used as a bargaining chip to resolve conflict. We should not waste many more time to capitalise on our rare earths deposits.
The author is from the Tan Sri Omar Centre for STI Policy, IISDS, UCSI University, and is also an Associate Fellow at the Ungku Aziz Centre for Development Studies (UAC), Universiti Malaya.
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