NEW YORK, March 3. /TASS/. A potential entry into an agreement on mineral resources with Kiev, including rare-earth metals, appears to be economically unfeasible and hard to be reached for the US, CEO of Navigator Principal Investors Kyle Shostak told TASS.
"The potential rare-earth metals deal with Ukraine, from my point of view, is not economically viable for the US. Furthermore, I believe it is if not utopian than, at the very least, extremely difficult to be reached due to the following basic causes. Firstly, Ukraine merely does not possess such quantity of rare-earth metals and the so-called ‘critical minerals’ the [US] administration expects to receive," the expert said. Even if the agreement comprises also "reserves of oil, gas, and port capacities, then the entire this volume will be absolutely not enough to reach $100 bln in the best case, to say nothing of $500 bln payback declared," he noted.
The deal provides for inclusion of greenfields, rather than brownfields, the chief executive said. "Even if assuming that a portion of resources controlled by the Ukrainian party will be tapped with participation of US companies, with the total estimate of about $4.4 trillion, mammoth costs will be needed for appraisal, production and transportation," Shostak said.
Thirdly, if following the condition voiced earlier that Kiev authorities are to return $500 bln to the United States, then "the net margin is to be more than 20% without considering capital investments mentioned above, which is simply unreal," the expert stressed.
Considering the aspiration of the US to compete with China that dominates the rare-earth metals market, it would be more reasonable with Washington to consider entering into an agreement with countries boasting huge reserves of already confirmed resources, the chief executive said.
"As regards an alternative to the deal of the US with Ukraine, although in knowingly smaller yet achievable and less costly scales, then such scheme for agriculture, which is the most developed in Ukraine, appears to be a much more reasonable scenario for me," Shostak added.