After weeks of tension between Kyiv and Washington, Ukraine has reached an agreement with the United States regarding the terms of a minerals deal, including the joint exploration and extraction of critical resources. Ukrainian deputy prime minister and justice minister Olha Stefanishyna, who led the negotiations, told Financial Times about the details, expressing hope that the deal will improve relations between the two countries.
According to Stefanishyna, Kyiv is ready to sign the agreement on jointly developing its mineral resources, including oil and gas, after the United States dropped demands for a right to $500 billion in potential revenue from exploiting the resources. However, Ukraine also had to drop its demands for certain security guarantees linked to minerals.
What We Know So Far
The final draft, seen by FT, would establish a fund into which Ukraine would contribute 50 per cent of proceeds from the future monetization of state-owned mineral resources, including oil and gas, and associated logistics. The fund would invest in projects in Ukraine.
The deal excludes mineral resources that already contribute to Ukrainian government coffers, meaning it would not cover the existing activities of Naftogaz or Ukrnafta, Ukraine’s largest gas and oil producers.
‘The agreement omits any reference to US security guarantees’
However, the agreement omits any reference to US security guarantees that Kyiv had originally insisted on in return for agreeing to the deal—nevertheless, some argue that US involvement in such a critical sector inherently provides a form of security assurance. Additionally, key aspects, such as the size of the US stake in the fund and the terms of joint ownership, are to be determined in subsequent agreements.
According to Ukrainian sources, Volodymyr Zelenskyy is scheduled to visit Washington on Friday to officially sign the deal. On Tuesday US President Donald Trump also confirmed that his Ukrainian counterpart will visit the White House on 28 February for the signing ceremony.
The Long and Winding Road
Ukrainian rare earth minerals and other resources have long been viewed as one of Volodymyr Zelenskyy’s aces to strengthen his country’s position in peace talks. The Ukrainian president’s so-called ‘victory plan’, presented in autumn 2024, already included a proposal for the European Union and the United States to jointly use Ukraine’s critical resources—such as lithium, gas, titanium, and others. Trump signalled interest in a deal regarding the proposal; however, at first, he wanted more than what Zelenskyy offers to cover the military support provided by Washington to Ukraine—some $500 billion, according to leaked draft documents of the deal.
Zelenskyy initially dismissed the deal, leading to an intense war of words between him and Trump, with the latter calling Zelenskyy a ‘dictator without elections’ and warning him to accept the deal or risk soon having no country to talk about. Zelenskyy then accused the US leader of spreading Russian disinformation while stating that Kyiv refuses to pay back any of the support it has received, calling it grants and aid. However, on Monday, Ukrainian officials stated that Washington and Kyiv are very close to an agreement, finalizing the details.
On Monday Russian President Vladimir Putin sought to counter the deal in the making by offering Washington access to Russia’s vast reserves of minerals. In an interview, Putin stated that Moscow is ready to cooperate with the United States, inviting American companies to develop aluminium reserves in Siberia’s Krasnoyarsk region, estimating the initiative could be worth $15 billion. Furthermore, the Russian president offered access to mineral deposits in the eastern part of Ukraine, occupied by Moscow.
Putin most likely referred to the Shevchenko deposit, which is Ukraine’s largest lithium reserve, captured by Russian forces earlier this month. The ‘white gold’ under Shevchenko is estimated at 13.8 million tons of ore valued at nearly $1.5 billion. Besides Shevchenko, Moscow captured another significant deposit, Krutaya Balka in the southeastern region of Zaporizhzhia, in 2022. That means Russia currently controls two of the four prospective lithium deposits of Ukraine.
Why Trump Wants It So Bad?
Rare earth metals and minerals will be the oil of the coming decades; they are effectively the key to the green transition and further technological development. From electric vehicles to smartphones, computers, medical devices, and military technologies, these elements are essential in various sectors. Therefore, it is not surprising that every major global player seeks to tap into those reserves.
While the United States possesses significant reserves of rare earth elements, it also remains heavily reliant on imports to meet its needs. Between 2019 and 2022, over 95 per cent of the rare earths consumed in the country were imported, with China being the primary source. In 2023, the United States imported rare earth metals, scandium, and yttrium predominantly from China, accounting for approximately 98.7 per cent of the total import quantity.
‘Between 2019 and 2022, over 95 per cent of the rare earths consumed in the US were imported, with China being the primary source’
The Trump administration correctly realized that it needs to counter this dependence on the country it sees as its major adversary and rival in the coming years. That is also the motive behind the willingness to purchase Greenland from Denmark, as pointed out by leading NATO strategist Sumantra Maitra in his recent interview with Hungarian Conservative. ‘Instead of competing with China in Africa, if the US can source rare earth minerals from Greenland, it’s a win-win,’ Maitra stated. By signing the deal with Ukraine, Trump has taken an enormous step towards reducing US dependence on China.
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