Before the turbocharged conversation between US President Donald Trump, US Vice-President JD Vance and Ukrainian President Volodymyr Zelensky in the Oval Office on Friday 26 February 2025, a deal to allocate Ukrainian critical mineral mining rights seemed close to fruition. Ukrainian officials had reportedly agreed to the terms before Zelensky’s eventful visit to Washington.
Throughout the conflict, Trump has been vigorously advocating for a ceasefire in the conflict or for Ukraine to grant the US partial rights to the country’s natural resources. Zelensky is game for Trump’s international demonstration of his art of the deal, given that Ukraine receives either NATO membership or US security guarantees, with Trump keen on neither. Then, on 4 March, the US president announced that he would be suspending all further US military aid to Ukraine, as Ukraine, in his eyes, “isn’t committed to peace”.
Trump has said, however, that a critical minerals deal is not necessarily off the table – most likely because it is key to US strategic interests. He has consistently displayed impulsiveness on the international stage, and – supposedly known for his mirroring of the viewpoints of the person he last spoke to – his rhetoric has veered from strong assertions on how sovereign nations should govern themselves and threats of annexation, to amicable interactions with the leaders of those same nations shortly thereafter. It would be surprising if some form of agreement is not reached between the two nations, despite the shouting match between Trump, Zelensky and Vance.
While Ukraine does possess a significant amount of critical minerals, estimated at 5% of the world’s total, discussions surrounding a potential deal are complicated by geographical, security, developmental and feasibility considerations. What might a US-Ukraine critical mineral agreement entail?
What are critical minerals and why are they necessary?
GlobalData classifies lithium, copper, nickel, cobalt and rare earth elements (REEs) as the most critical minerals globally, with 50 others critical to national security according to the US Geological Survey. These minerals are essential to technologies necessary for the energy transition, such as solar panels and batteries.
The purported agreement between the US and Ukraine centers on REEs, described by Trump as “raw” earth elements. REEs, a group of 17 chemically similar elements abundant (despite their namesake) worldwide, play a vital role in diverse energy transition technologies and military applications such as lasers, missiles, tanks, computers and televisions.
Trump’s interest in Ukrainian minerals stems from China’s dominance in the critical mineral supply chain. In 2010, China produced 97% of all REEs, a figure that has since decreased to 70% due to China’s protectionist policies. China also holds significant market shares in cobalt and lithium production. Following the Politburo’s ban on the export of germanium, gallium and antimony in November 2024, the US is ever more searching for alternative sources.
What minerals are in Ukraine-controlled territory?
Ukraine has large quantities of graphite, lithium, uranium and other critical minerals, and is also one of the world’s top producers of titanium sponge. It has Europe’s largest lithium reserves and 20% of the world’s graphite. Of the REEs, Ukraine has a lot of scandium, according to experts. The details of these deposits, however, are classified, making it hard to appraise the approximate value of the country’s scandium deposits. Dr Robert Muggah, principal of SecDev [a US security and development thinktank] has stated that Ukraine has unknown quantities of cerium, dysprosium, gadolinium, lutetium, neodymium and several other REEs. The issue, however, is development costs.
Currently, there are no active REE projects in Ukraine, and establishing mines typically requires more than a decade and hundreds of millions of dollars. Given Ukraine’s war-torn infrastructure and power grid, the US faces a formidable task in developing these resources, which may take decades to fully materialise.
What minerals are in Ukraine but not in controlled territory?
Many of Ukraine’s mineral resources are situated in Russian-controlled territory. Estimates suggest that around 20% of Ukraine’s territory is occupied, containing 40% of the nation’s mineral wealth. The Donetsk and Luhansk Oblasts alone hold almost $6 trillion worth of vital minerals.
A substantial amount of Ukraine’s hydrocarbon resources, including more than half of its coal reserves and 20% of its natural gas fields, are also situated in the occupied territories. NBC News has reported that Russia, during negotiations, had “raised the possibility” of providing access to the US to critical minerals in Russian-occupied territories, but it is hard to discern what Putin will actually do in regards to surrendering its minerals.
Feasibility, both from mining and human perspectives
Industry experts are skeptical of the quantity of Ukrainian mineral reserves. Outdated Soviet geological surveys and inaccurate reporting bring Zelensky’s mineral map into question. A deal would likely then depend on updated geological surveys to be agreed by Ukrainian and US lawmakers. The country also has a vast amount of oil and liquefied natural gas (LNG) reserves. Hydrocarbons would be another area of interest for US leaders, given their tariffs on Canada (a large LNG source for the US). Estimates of Ukraine’s hydrocarbon resources hover around $360 billion.
The global value of the REE market on which Trump desperately wants to get his hands is around $12 billion, so his dream of $500 billion in REEs is not likely to come to fruition any time soon. However, the prospect of joint US-Ukraine development of critical minerals is quite clearly on the cards. The deal would have the US and Ukraine with joint ownership of the revenue fund, with Ukraine having to contribute 50% of proceeds from state-owned resources. The deal, however, does not include security guarantees.
Ukraine has had a pretty awful recent history. Between the Holodomor [famine] in the 1930s, Nazi occupation in the 1940s and USSR dominance until the 1990s, it has struggled to retain sovereignty. With the US not honouring the 1994 Budapest agreement, whereby the US and UK would guarantee Ukraine’s security if it gave up its nuclear weapons, it now sees two foreign powers making its territorial decisions without a seat at the table.
The only hope for Ukraine seems to be this deal, yet it remains unclear how Trump expects to suck billions out of Ukraine’s critical minerals industry without offering security guarantees. Mines such as the Polokhivske lithium deposit are only 240km northwest of the frontline, and with discovery taking a minimum of four years, mine development will be difficult if Ukraine is still at war. Even with the large amount of uncertainty around how the deal will be signed, the specifics of the deal are hazy, classified and out of date.
