KYIV, Ukraine — Ukraine has proposed a strategic arrangement with U.S. President Donald Trump to ensure ongoing American military assistance in exchange for developing its mineral sector, which is potentially a lucrative source of rare earth elements critical for various technologies.
Trump expressed interest in such a deal earlier this month, following a suggestion from Ukrainian President Volodymyr Zelenskyy last fall, as part of his strategy to bolster Ukraine’s position in negotiations regarding Russia.
“We have significant potential in the territories we control,” stated Andrii Yermak, the chief of staff to the Ukrainian president, in an exclusive interview. “We are eager to collaborate and develop our resources, primarily with partners like the United States.”
The proposal raises questions about Ukraine’s rare earth industry and the potential for establishing a mutually beneficial agreement.
Rare earth elements consist of a group of 17 elements crucial for consumer technology, such as smartphones, hard drives, and both electric and hybrid vehicles. However, it remains uncertain if Trump is targeting specific elements from Ukraine, as the nation also has a rich array of other minerals.
“It could be lithium, titanium, uranium, among many others,” Yermak indicated. “There’s much to explore.”
Notably, China remains the leading global producer of rare earth elements, presenting a challenge in U.S. and European efforts to lessen reliance on Beijing. For Ukraine, securing a deal would be vital for maintaining unwavering military support from its greatest ally, especially crucial as the nation endures ongoing conflict following Russia’s large-scale invasion on February 24, 2022.
This initiative arises amid a tightening global landscape for reliable access to vital minerals.
Presently, Ukraine’s rare earth resources are largely untapped, constrained by the ongoing war and existing state policies that govern the mineral sector. In addition, a lack of comprehensive geological data hampers development in rare earth extraction, with many reserves distributed unevenly across the country. Existing studies are deemed inadequate for gauging the industry’s true potential, as highlighted by business leaders and analysts.
However, the outlook for Ukraine’s natural resources appears encouraging overall. The nation is believed to house some of the most significant titanium reserves in Europe, which are essential for the aerospace, medical, and automotive sectors. Furthermore, Ukraine possesses substantial lithium reserves crucial for the production of batteries, ceramics, and glass.
In 2021, the mineral sector accounted for approximately 6.1% of Ukraine’s gross domestic product, contributing 30% to its exports. Yet, nearly 40% of the country’s metallic mineral resources are currently inaccessible due to Russian occupation, as reported by We Build Ukraine, a think tank based in Kyiv. Ukrainian officials argue that assisting in development prior to further Russian encroachments would align with U.S. interests.
The European Commission acknowledges Ukraine as a potential supplier of over 20 critical raw materials and suggests that its integration into the 27-nation European Union could bolster the European economy.
Moving forward, specifics regarding any agreement will likely emerge from upcoming discussions among U.S. and Ukrainian officials, with Zelenskyy and Trump anticipated to address the matter during future meetings.
Interest from U.S. companies has been noted, as per Ukrainian business representatives. However, finalizing a formal agreement would probably necessitate legislative action, geological assessments, and the negotiation of precise terms.
The extent of security guarantees that companies may seek before undertaking operations in Ukraine, even in the event of a ceasefire, remains uncertain. Additionally, the nature of financing arrangements that would support contracts between Ukraine and American firms remains to be clarified.
