Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
UKRAINE HAS REACHED an agreement with the US on a framework for a broad economic deal that would include American access to the country’s rare earth minerals.
According to the Financial Times, who has seen the final agreement and first reported on it last night, the deal will establish a new fund that Ukraine and the US would have joint ownership of.
Ukraine will contribute 50% of proceeds from the “future monetisation” of state-owned mineral resources, including minerals, oil, gas and associated logistics, into the fund, which will invest in projects in Ukraine. The terms of the fund have yet to be agreed upon.
Essentially, Ukraine alone will fund this joint account with money earned from mineral extraction, but the US will have joint ownership of it.
The Trump administration’s initial demand called for a reconstruction investment fund in which the US “maintains 100% financial interest”.
It called for Ukraine to contribute 50% of the fund’s revenue from mineral resources extraction – up to a maximum of $500 billion. Ukraine rejected the proposal and it does not form part of the new deal.
However, firm security guarantees are also not part of the deal – something Ukraine was anxious to secure from the US. One official said that this would be something the two presidents would discuss when they meet.
Trump told the Conservative Political Action Conference (CPAC) last week that the US wanted to “get their money back” from Ukraine, referencing aid that was given under the Biden administration.
“We’re asking for rare earth and oil – anything we can get,” he said.
Minerals can be described as critical or strategic by countries for their economy or energy production. The US designates about 50 and the European Union more than 30.
The European Commission has said Ukraine is “a significant global supplier of titanium and is a potential source of over 20 critical raw materials.”
Geologists, including at France’s Bureau of Geological and Mining Research (BRGM), found more than 100 resources, including iron, manganese and uranium, in a study of Ukraine published in 2023.
According to UN data, Ukraine’s soils hold some 5% of the world’s “critical raw minerals”. The 2024 editing of World Mining Data ranks Ukraine 40th among mineral-producing countries.
The country was the world’s tenth largest producer of iron in 2022. It is the world’s eighth largest producer of manganese, the tenth largest producer of iron, and the 11th largest producer of titanium.
It ranks 14th worldwide in its production of graphite, which is essential for electric batteries, making up “20% of the world’s estimated resource,” BRGM noted.
It’s also “one of Europe’s leading countries in terms of potential” for lithium – essential for batteries. In 2023, Forbes Ukraine wrote that the country has 33 million tonnes of lithium ore, worth $38 billion.
Ukraine has also said it “possesses one of the largest lithium deposits in Europe”. However, the government added that the soft metal it is not yet extracted.
Rare earth elements (REE) are a very specific classification of 17 metals within the much wider category of critical minerals. Ukraine is not known for its reserves of rare earths, which are essential for screens, drones, wind turbines, and electric motors.
“Ukraine has several deposits containing rare earth elements” but none of these deposits have been mined, said Elena Safirova, a Ukraine specialist at the US Geological Survey.
BRGM confirmed Ukraine had significant rare earth resources, adding it was not aware of any plans for commercial production.
The Ukrainian government said that “rare earth metals are known to exist in six deposits”. It said investment of $300 million would be needed to develop the Novopoltavske deposit, “which is one of the largest in the world”.
At least one site for rare earths identified by the government falls within a region occupied by Russia.
Technically, some of the elements cited by the Ukrainian government (tantalum, niobium, beryllium, strontium, magnetite) are not on the list of 17 rare earths.
In addition, rating agency S&P has said that some of the Ukrainian government projections are based on “a Soviet-era assessment of difficult-to-access rare earths deposits”.
As country’s rare earths may be too low in concentration or too difficult to access, “Ukraine’s deposits of rare earth elements might not be profitable to extract”, S&P said.
As you can imagine, the minerals are worth a lot of money. Last year, Forbes Ukraine estimated that the country’s mineral resources amounted to 111 billion tonnes, worth $14.8 trillion – mostly coal and iron ore.
But more than 70% of these resources were in Donetsk and Luhansk – regions partly controlled by Russia – and Dnipropetrovsk, where Moscow’s forces are approaching.
In 2022, the Washington Post estimated the value of Ukraine’s mineral reserves as much higher at $26 trillion – nearly half of that in areas under Russian control.
Trump has particularly declared that he wants rare earths minerals and demanded an accord on getting minerals in return for US aid for Ukraine to fight its war with Russia.
The US depends on imports for some critical minerals, and China is by far the world’s largest producer of these – it controls 70% of the world’s rare earth minerals.
In December, amid trade tensions as Trump prepared to take office, China banned exports of some critical minerals that are crucial for military technology to the US.
A minerals deal with Ukraine is an opportunity for Trump to be less dependent on a country that he has vowed to crack down on.
This week, the Russian president said he was open to offering the US access to its earth minerals, as well as access to those in Russian-occupied Ukraine.
In an interview with state-owned broadcaster Rossiya 1, Vladimir Putin said Ukraine’s potential deal with the US “does not concern us”, but said that Russia was willing to offer some of its minerals to the US.
“We would be ready to offer cooperation to our American partners… if they showed interest in working together,” Putin said.
He said that Russia had “an order of magnitude more resources of this kind than Ukraine”, adding that any offer to the US would include Russia’s “so-called new historical territories” – those it has seized and occupied in Ukraine since the February 2022 invasion.
Putin also said that Russia could sell about 2 million tons of its aluminium on the American market and “could think about working together with American companies in this area”.
“If American companies work here, then this is also a benefit, and a considerable one, because the companies will earn decently, and the corresponding volumes of aluminum will enter the domestic market at absolutely acceptable market prices,” he said.
With reporting from © AFP 2025
To embed this post, copy the code below on your site
have your say