Ukraine is preparing to finalize a deal with the United States that will allow the U.S. access to its mineral resources in exchange for ongoing military support. This agreement comes as Ukraine seeks to bolster its defense against Russia amid ongoing tensions and conflict.
A source from the Ukrainian government confirmed that the terms have been agreed upon with Washington. Former President Donald Trump commented on the deal, suggesting that it would ensure U.S. taxpayers would see a return on their investment from three years of military aid to Ukraine.
The idea of this mineral deal first surfaced in September during a meeting between Ukrainian President Volodymyr Zelenskyy and Trump at Trump Tower. Concerns about potential shifts in U.S. support under a future Trump administration prompted discussions about securing access to Ukraine’s mineral wealth.
As the deal approaches, U.S.-Ukrainian relations have faced challenges, particularly after Trump referred to Zelenskyy as a "dictator" and excluded Ukraine from negotiations with Russia.
Ukraine is rich in various critical minerals essential for technology, defense, and renewable energy. Before the Russian invasion in February 2022, minerals accounted for 6.1% of Ukraine’s GDP and 30% of its exports. The country is known for its significant deposits of copper, nickel, lithium, and titanium. For instance, Ukraine supplied 7% of the world’s titanium in 2019, a key material in aerospace and nuclear industries. Additionally, it is believed to have the largest lithium reserves in Europe, estimated at around 500,000 tonnes.
However, the war has complicated the situation. About 40% of Ukraine’s metallic mineral resources are now in regions occupied by Russia, including key lithium deposits in Zaporizhzhia and Donetsk.
The deal’s significance extends beyond Ukraine. Trump has emphasized the importance of securing these minerals, particularly rare earth elements (REEs), which are vital for manufacturing everything from smartphones to electric vehicles. China currently dominates the REE market, processing a large majority of these minerals globally. As a result, both the U.S. and Europe are keen to reduce their reliance on Chinese supplies.
In December, as Trump prepared for a potential return to office, China imposed a ban on exporting certain REEs to the U.S., which has heightened the urgency for the U.S. to secure alternative sources. The Biden administration had already faced restrictions on mineral exports from China, leading to increased tariffs on Chinese goods.
The ongoing global push for green energy also highlights the need for these minerals. Experts estimate that to meet net-zero targets by 2030, the world will require significantly more copper, lithium, nickel, and cobalt, prompting a surge in demand for mining and mineral resources.
As Ukraine and the U.S. move forward with this deal, the implications for both nations and the global mineral market could be profound.