U.S. President Donald Trump is negotiating a mineral agreement with Ukraine and reiterating his intention to buy Greenland. This is interpreted as an effort to secure rare earth materials, which are abundant in the U.S. but for which China remains the undisputed leader in refining capabilities. Foreign media analyzed that President Trump is focusing on securing rare earth materials by deploying a comprehensive Chonbang diplomatic and security strategy to counter China.
On the 25th (local time), The Wall Street Journal (WSJ) reported that President Trump has expressed his determination to secure necessary minerals by mentioning Ukraine, Greenland, and even Russia.
Among them, the most important mineral is rare earth. Rare earth plays an essential role as a strategic resource in various industrial fields such as advanced technology, defense, and energy, and is a core material in the U.S. defense industry used in fighter jets, drones, and nuclear submarines. While there are significant deposits, the difficulty of extraction and refining is why it is referred to as 'rare earth (稀土類·Rare Earth Elements).'
During a recent cabinet meeting, President Trump emphasized, "We urgently need rare earth. Ukraine has it," and is accelerating the mineral agreement. The agreement is structured so that the U.S. holds equity in the rare earth materials buried in Ukraine in exchange for the support provided to Ukraine.
Currently, the rare earth market is monopolized by China. According to the Korea International Trade Association, China accounts for nearly 70% of global rare earth ore production. Including informal (illegal) production within China, this percentage is expected to increase.
The U.S. also mines about 12% of the world's rare earth production, following China, but the problem lies in the technology to effectively convert it into strategic materials. Currently, only a few countries, including China, France, India, and Vietnam, can separate and refine rare earth ores. Particularly, China is responsible for about 85% of global rare earth refining. The limitation of rare earth mining and refining to a few countries is due to economic feasibility issues and environmental pollution. Consequently, the WSJ reported that the U.S. sends about two-thirds of the rare earths it mines back to China for processing before re-importing them.
Such dependency raised serious concerns during the first Trump administration’s U.S.-China trade war. At that time, China utilized rare earth exports as a means to pressure the U.S., prompting the U.S. to begin investing heavily in restructuring the supply chain for critical minerals, including rare earths. However, the establishment of domestic refining facilities in the U.S. has been slow due to environmental regulations, delays in permits, and lack of economic viability.
According to the WSJ, cobalt, a key mineral for the defense and battery industries, is also seeing increasing dominance by China. All six of the world’s major cobalt refineries are owned by China, and its market share in the global refined cobalt market has increased from 65% in 2018 to 83% in 2024. Furthermore, China is bolstering its market control by establishing a nickel intermediate production plant in Indonesia, the world's largest nickel-producing country. Nickel is a critical mineral for electric vehicle batteries.
In response, the Trump administration recently signed an executive order simplifying the permitting process for rare earth and key minerals and expanding federal financial support.