Ukraine and the United States have been engaged in negotiating a rare earth deal for months. Last year Volodymyr Zelenskyy’s so-called ‘victory plan’ included an offer on Ukraine’s natural resources; later, once Donald Trump was inaugurated as president, the United State demanded 500 billion USD of critical minerals in exchange for the support Washington has been granting Kyiv over the last three years. Albeit the Ukrainian president publicly rejected this offer, arguing that he cannot sign an agreement that ‘will be paid by ten generations of Ukrainians’, recently Deputy Prime Minister for European and Euro–Atlantic integration Olga Stefanishyna said that Kyiv and Washington are in fact close to signing a deal over US access to Ukraine’s mineral deposits.

Rare earths are elements such as cerium, yttrium and lanthanum, while critical minerals include lithium, beryllium, graphite and aluminium too. Many of these minerals are crucial elements of modern technological products: lithium is used in laptop batteries, while rare earths can be utilized in electric vehicles and cell phones as well.

Donald Trump’s proposition to secure US access to Ukrainian rare earths was deemed ‘colonial’, ‘appropriation’, ‘mafia imperialism’ and even ‘blackmail’ by some. In reaction to the US’ bid the EU also made its ‘win-win’ offer on Ukraine’s riches. According to Stéphane Séjourné, ‘the added value Europe offers is that we will never demand a deal that’s not mutually beneficial’. The point apparently missed both by Kyiv and Brussels is that a rare earth metals deal between Ukraine and Washington, which makes the US financially interested in the war-torn eastern European country, could have been a bargaining chip in Kyiv’s hands during the peace negotiations. Ukraine’s hesitancy to sign the deal, on the other hand, might further deteriorate its bargaining position, as this week Moscow also stepped forward and made its own offer to Washington.

Earlier this week the Russian president said that he is willing to allow US access to the country’s rare minerals. On Monday Donald Trump also noted Russia’s large rare earths deposits, adding that whilst having serious discussions with Russia on ending the war, during US–Russia talks ‘some economic development deals’ also came up. It is important to note that the discussion on US investments into Russian natural resources was already part of the negotiations the two superpowers had in Saudi Arabia. Kirill Dmitriev, CEO of the Russian Direct Investment Fund and Special Presidential Envoy on Investment and Economic Cooperation with Foreign Countries was part of the Russian negotiation team in Riyadh alongside Foreign Minister Sergey Lavrov and Russia’s former Ambassador to the United States Yuri Ushakov. The Russian Direct Investment Fund headed by Dmitriev was created in 2011 to attract foreign investment into Russia. After the talks in Saudi Arabia Dmitriev noted to the press that the two sides discussed ‘joint projects in the Arctic’, a region known for its vast mineral wealth. In an interview Kirill Dmitriev also emphasized Russia’s willingness to cooperate on mining with the US in the Russia-controlled territories of Ukraine, while adding that Moscow could supply the US with about ‘2 million tons’ of aluminum (from the reserve in the Krasnoyarsk region) in case sanctions are lifted.

Last Friday, that is, before Russia publicly offered the US access to its resources, President Putin also noted that the country should speed up plans to mine lithium. The company Polar Lithium that aims to become Russia’s first-ever domestic producer of lithium-bearing raw materials by developing the Kolmozerskoye lithium deposit (northwest Russia) was sanctioned by the Biden administration on 10 January, that is, only days before Donald Trump was inaugurated as president. It implies that a Russia–US deal on minerals and mining might necessitate lifting at least some of the sanctions levied on Moscow over the past three years.

‘Most critical minerals originate from China, which controls about one third of the world’s total rare earth metal production’

Ukraine’s critical minerals and other natural resources are valued between 15 to 26 trillion USD. The full extent of Russia’s strategic deposits is not fully explored; new deposits are discovered annually. It is estimated, however, that close to 20 per cent of the world’s rare earths is located in Russia, which means that the country’s deposits come second to China’s, far exceeding Ukrainian deposits. Large rare earth and other mineral deposits are located in Yakutia (estimated 3.2 million tons of oxides), Murmansk (the mentioned Kolmozerskoye lithium deposit), Irkutsk, Transbaikal and Kabardino–Balkaria. The Solikamsk Magnesium Plant in Perm is one of Russia’s major rare earth production sights. In addition to Russia’s own reserves, by now Russia is estimated to control about half of Ukraine’s total mineral resources. Ukraine’s most natural resource rich regions are the Donetsk and Luhansk oblasts. One of Ukraine’s three major lithium deposits was taken by Russia in the Donbas region this January.

As Hungarian Conservative has reported, most critical minerals originate from China, which controls about one third of the world’s total rare earth metal production. Therefore, an attempt to invest into alternative suppliers—be it Ukraine or Russia—can be understood as an effort to diversify supply chains amid rising competition between Washington and Beijing. The United State’s quest to secure its supply of critical minerals is especially timely given the fact that a couple of months ago, in December 2024 China imposed restrictions on the export of several minerals and metals to the US. Beijing’s decision came in reaction to US technological restrictions on China. Beijing froze the export of antimony, gallium, germanium and superhard materials to the United States, while the regulation of graphite export to the US was also tightened. In December experts forecasted that as rivalry intensifies between the two sides, China might consider imposing further restrictions too on the US’ access to its minerals. Therefore, there seems to be a strong economic rationale behind the Trump administration’s quest to secure alternatives to China.

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