KYIV, Ukraine — Ukraine has proposed to U.S. President Donald Trump a potential agreement to secure ongoing military assistance in exchange for developing the nation’s mineral sector, which could serve as a significant source of rare earth elements critical for various technological applications.
Trump expressed interest in such a deal recently, a notion that Ukrainian President Volodymyr Zelenskyy initially introduced last fall as part of a strategy to bolster Ukraine’s position in negotiations with Russia.
In an interview, Andrii Yermak, the Chief of Staff to President Zelenskyy, emphasized the significant mineral potential in Ukrainian territory. “We genuinely possess considerable potential in the territory we control. Our goal is to partner and develop these resources, primarily with the United States,” Yermak stated.
What exactly are rare earth elements?
Rare earth elements consist of 17 elements essential for various consumer technologies, such as smartphones, hard drives, and electric and hybrid vehicles. It remains uncertain whether Trump is specifically targeting certain elements for extraction in Ukraine, as the nation is also rich in other types of minerals.
Yermak mentioned, “It could be lithium, titanium, uranium, among many others. There’s a lot available.” China, the primary geopolitical rival of the U.S., currently leads the world in the production of rare earth elements, prompting both the U.S. and Europe to seek alternatives to reduce reliance on Chinese sources.
For Ukraine, securing a deal would guarantee that its most significant ally continues military support, an essential lifeline amidst the ongoing conflict that has persisted since Russia’s full-scale invasion on February 24, 2022. The proposal coincides with a global trend of increasing difficulty in securing reliable access to critical minerals.
The condition of the Ukrainian minerals industry
Ukraine’s rare earth resources remain largely untapped due to the ongoing conflict and existing state policies governing the mineral sector. The absence of substantial geological survey data leads to a lack of clarity surrounding the development of rare earth mining within the country.
The distribution of mineral reserves across Ukraine presents challenges, compounded by inadequate existing studies deemed insufficient by industry experts. Despite this, there is optimism regarding Ukraine’s natural resource potential; the nation is believed to possess some of Europe’s largest titanium reserves, key for the aerospace, medical, and automotive industries. Additionally, significant lithium reserves, vital for the production of batteries and ceramics, are also found in Ukraine.
In 2021, the mineral industry represented 6.1% of Ukraine’s gross domestic product and accounted for 30% of its total exports. However, about 40% of Ukraine’s metallic mineral resources are currently inaccessible due to Russian occupation, as noted by We Build Ukraine, a think tank based in Kyiv. Ukrainian officials argue that developing remaining resources is favorable for Trump before further Russian advances could hamper access.
The European Commission has recognized Ukraine as a potential supplier for over 20 critical raw materials. It has concluded that joining the European Union could bolster the economy within the 27-member bloc.
What are the anticipated developments?
The specifics of any proposed deal are expected to arise from ongoing discussions between U.S. and Ukrainian leadership. Trump disclosed plans on Tuesday to dispatch Treasury Secretary Scott Bessent to Ukraine for discussions with Zelenskyy.
In a post on his social media platform, Trump asserted, “This War MUST and WILL END SOON — Too much Death and Destruction. The U.S. has spent BILLIONS of Dollars Globally, with little to show.”
Interest has been expressed by American companies, according to reports from Ukrainian business representatives. However, formalizing an agreement would likely entail legislative support, extensive geological surveys, and the negotiation of precise terms.
Questions remain regarding the type of security arrangements that businesses would require to operate in Ukraine, even with a ceasefire in place. Additionally, the fundamental financing structures underlying contracts between Ukraine and U.S. firms remain unclear.
