The United States and Ukraine are trying to hammer out a natural resources agreement that would give Washington access to Kyiv’s untapped mineral riches in exchange for investments and what Ukraine hopes would be concrete security guarantees.
Speaking to reporters on Wednesday, Ukraine’s President Volodymyr Zelensky said the deal could be a “big success” but that it would depend on talks with US President Donald Trump.
He said the deal was just a “framework” and insisted that some key questions remained unanswered.
Here is what we know – and don’t know – about the agreement.
What’s in the deal?
The draft agreement seeks the establishment of a “reconstruction investment fund” that would be jointly managed by the American and Ukrainian governments.
Ukraine’s Prime Minister Denys Shmyhal said Wednesday that Kyiv would be funneling half of the revenues from future natural resources projects into the fund, with money being reinvested in more developments.
Shmyhal stressed the deal would exclude existing “deposits, facilities, licenses and royalties” tied to Ukraine’s natural resources.
“We are only talking about future licenses, developments and infrastructure,” he said.
What does Trump want from the deal?
Trump said at the weekend that he’s “trying to get the money back,” referring to the aid provided to Ukraine under the previous administration.
The US initially demanded a $500 billion share of Ukraine’s rare earths and other minerals in exchange for the aid it has already provided to Kyiv. But Zelensky rejected that idea, saying that agreeing to it would amount to “selling” his country. Trump subsequently called Zelensky “a dictator.”
Asked on Tuesday what Ukraine would receive in the mineral deal, Trump said: “$350 billion and lots of equipment, military equipment, and the right to fight on,” repeating a false claim he has made in the past. According to the Kiel Institute for the World Economy, a German think tank that closely tracks wartime aid to Ukraine, Washington had committed a total of about $124 billion in aid to Ukraine.
Trump indicated security guarantees were not part of the deal, saying: “We’ve pretty much negotiated our deal on rare earth and various other things,” adding that “we’ll be looking to” future security for Ukraine “later on.”
However, Zelensky said his country will not be repaying money given to it by Washington in the past as part of the deal. “I will not accept (even) 10 cents of debt repayment in this deal. Otherwise, it will be a precedent,” Zelensky said Wednesday at a news conference in Kyiv.
Trump on Wednesday projected confidence that the natural resources deal would come to fruition, saying, “We’re doing very well with Russia-Ukraine. President Zelensky is going to be coming on Friday. It’s now confirmed, and we’re going to be signing an agreement.”
What does Ukraine want from the deal?
Ukraine’s mineral riches have long been eyed by its allies – and Kyiv has made them part of its appeal for support. Zelensky has made it clear he wants security guarantees to be part of the deal.
Some deposits are already in areas that are under Russian occupation and Zelensky has argued that one reason why the West should support Ukraine in its fight against Moscow is to prevent more of these strategically important resources from falling into the Kremlin’s hands.
“The deposits of critical resources in Ukraine, along with Ukraine’s globally important energy and food production potential, are among the key predatory objectives of the Russian Federation in this war. And this is our opportunity for growth,” Zelensky said in October when presenting his “Victory plan.”
Nataliya Katser-Buchkovska, the co-founder of the Ukrainian Sustainable Investment Fund, said that a deal cannot work without security guarantees.
“(For) the US to get access to these deposits, Ukraine must regain control over those territories, demine and rebuild the infrastructure,” she said.
Why is Trump so keen on a minerals deal with Ukraine?
Materials such as graphite, lithium, uranium and the 17 chemical elements known as rare earths are critical for economic growth and national security.
They are essential to the production of electronics, clean energy technology, including wind turbines, energy networks and electric vehicles, as well as some weapons systems.
The US largely depends on imports for the minerals it needs, many of which come from China, which has long dominated the market.
China is responsible for nearly 90% of global processing of rare earth minerals, according to the Center for Strategic and International Studies (CSIS). On top of that, China is also the world’s largest producer of graphite and titanium, and a major processor of lithium.
Experts have long warned that relying on China for strategic materials is risky, but the latest trade tensions between Washington and Beijing make it even more important for the US to look for alternative suppliers.
The US isn’t the only one eyeing Ukraine’s resources. The European Union signed a memorandum of understanding with Ukraine in 2021 outlining future investment opportunities in mineral mining.
A similar document was prepared under the Biden administration last year. It said the US would promote investment opportunities in Ukraine’s mining projects to American companies in exchange for Kyiv creating economic incentives and implementing good business and environmental practices.
How large are Ukraine’s resources?
Trump has repeatedly referred to the deal as one on “rare earths” but it’s likely he was speaking more widely about critical minerals.
Ukraine doesn’t have globally significant reserves of rare earth minerals, but it does have some of the world’s largest deposits of graphite, lithium, titanium, beryllium and uranium, all of which are classed by the US as critical minerals.
But while Ukraine does have large reserves of these minerals, little has been done to develop the sector. Given the huge strain Russia’s unprovoked aggression has put on the Ukrainian economy, it is unlikely that Kyiv would be able to extract these resources without foreign investment.
“Most projects remain in the exploration phase, with no large-scale processing facilities in place,” said Katser-Buchkovska, who served as a member of the Ukrainian Parliament from 2014 to 2019 and was the head of a parliamentary committee on energy security and transition.
“Extracting rare minerals will be extremely expensive and will require years (and) billions of upfront investments, infrastructure development, and workforce training before production can even begin,” she said, adding that Ukraine’s resource extraction sector remains underdeveloped because of outdated infrastructure, war-related damage and lack of investment.
What is Russia saying about this?
Trump’s return to the White House has resulted in a major shift in policy towards Russia.
US and Russian officials meet in Saudi Arabia earlier this month to discuss the end of the war in Ukraine – without inviting Kyiv or any of its European allies to take part.
Trump said on Monday that he was in “serious discussions” with Russia about ending the war and was “trying to do some economic development deals” with Moscow, noting its “massive rare earth” deposits.
Russian President Vladimir Putin said Monday that Moscow was ready to work with American companies to mine rare earth mineral deposits in both Russia, and parts of Russian-occupied Ukraine.
“Russia is one of the leading countries when it comes to rare metal reserves. By the way, as for new territories, we are also ready to attract foreign partners – there are certain reserves there too,” Putin said in an interview with Russian state media, referring to Russian-occupied areas of Ukraine.
