Elon Musk‘s future prosperity is inextricably linked to lithium, the vital mineral required for many of his businesses, from Tesla to X to SpaceX.
Tech may be marching into the future. But it is still battery-powered.
Dubbed ‘white gold’, lithium is notoriously difficult to mine in the United States. A $1 billion lithium refinery that Musk is building in Corpus Christi, Texas could use as many as eight million gallons of water a day in a region prone to drought.
With growing demand from Tesla and other electric vehicle manufacturers, the need for large-scale lithium mining worldwide has also soared.
And Ukraine, with an estimated 500,000 metric tons of lithium reserves, holds Europe’s biggest deposits.
So, it may not be surprising that Donald Trump’s demand for a $500 billion payback from Ukraine as part of his plan for a path to peace with Russia includes American control of half of the embattled country’s critical minerals.
As reported by The Telegraph newspaper, the terms of the contract amount to a “U.S. economic colonization” of Ukraine. In the proposed plan, under New York law, the U.S. would take 50% of recurring revenues received by Ukraine for the extraction of lithium and other resources.
“For all future licenses, the U.S. will have a right of first refusal for the purchase of exportable minerals,” the contract adds.
Volodymyr Zelensky reportedly offered Trump a share of Ukraine’s minerals in September, not least because they are situated close to the country’s border with Russia, and he was hopeful American involvement would deter Putin.
Sources say he never dreamed Trump would insist on such a heavy toll for America’s spending on Ukraine’s defense, a price the president estimates at $300 billion.
“They have tremendously valuable land in terms of rare earths, in terms of oil and gas, in terms of other things,” Trump told Fox News, adding that Zelensky had “essentially agreed” to give up $500 billion.
While the U.S. does have substantial untapped lithium reserves and the price dove last year, it is costly to mine, and demand for electric vehicles is expected to rebound and keep rising.
“Demand for lithium-ion batteries is set to continue to grow rapidly in 2025. Benchmark forecasts that EV and ESS-related demand for lithium will both increase by over 30 percent year-on-year in 2025,” Adam Megginson, a senior analyst at Benchmark Mineral Intelligence, told Investing News.
“Additional volumes of lithium will need to come to market” to meet this demand, he added.
The biggest demand will come from China as the EV market grows there.
While he has played a major role in many of the new administration’s major moves so far, there is no evidence of Musk being directly involved in the Ukraine deal proposed by Trump.
But any deal to secure lithium for the U.S. is likely to benefit American EV makers. Some experts claim demand for lithium could increase tenfold in the next decade.
“Lots more new deposits will need to be brought into play, and that’s why everyone is looking for lithium deposits,” Frances Wall, a mineralogy professor at the University of Exeter in the UK told the Washington Post. “Lithium is coming from a very low base of supply.”
