Ukraine and US Unable to Conclude Deal on Rare Earth Minerals
On Friday, Ukrainian President Volodymyr Zelensky met with US President Donald Trump in Washington to sign an agreement granting the US access to Ukraine’s rare earth mineral deposits. However, the meeting took an unexpected turn, ending in a heated exchange between Zelensky, Trump, and Vice President JD Vance. Following Zelensky’s early departure, the White House announced that no agreement had been signed.
Prior to the meeting, Zelensky had shown optimism, suggesting this “initial” agreement might lead to expanded collaboration. However, he acknowledged that Ukraine still needed to obtain security assurances from the US, which was a major point for him. Trump contended that the agreement could enable American taxpayers to “recover their funds” from the assistance given to Ukraine during the conflict, but emphasized that European nations should primarily handle Kyiv’s security needs.
What Conditions Are in the Agreement?
On Wednesday, Prime Minister Denys Shmyhal of Ukraine declared that Kyiv and Washington had completed a draft version of the agreement, which was made public on Friday morning. The arrangement proposed the establishment of an “investment fund” aimed at aiding Ukraine’s rebuilding initiatives.
Shmyhal noted that the fund would be jointly managed by both countries on an “equal footing.” As per the agreement, Ukraine would contribute 50% of its future income from state-controlled mineral resources, oil, and gas to the fund. These funds would then be put toward projects focused on improving Ukraine’s security, stability, and economic development.
The US, in turn, pledged a long-term financial commitment to fostering a stable and prosperous Ukraine, subject to US law. The agreement also stipulated that the US would own the maximum share of the fund permitted under American regulations.
Disagreements Over Mineral Rights and Financial Terms
It seems that the discord between Trump and Zelensky intensified due to particular aspects of the minerals agreement. Initially, the US proposed a $500 billion stake in Ukraine’s mineral assets, which Zelensky declined. Sources suggest that this demand was subsequently revoked.
Tymofiy Mylovanov, who previously served as a Ukrainian minister and now leads the Kyiv School of Economics, stated that Washington’s original proposal threatened Ukraine’s sovereignty and risked economic downfall. However, he observed that the US has adjusted its stance, presenting a fairer agreement centered on joint ownership, without making claims on past assistance. He believes this revised approach could eventually advantage Ukraine.
Trump has emphasized the financial aspect, stating on Tuesday that the US has provided between $300 billion and $350 billion in aid to Ukraine and that a minerals deal could help recover these funds. However, the Kiel Institute, a German think tank, estimates that actual US assistance amounts to $119 billion.
Does the Agreement Include Security Guarantees?
An important issue for Zelensky has been the insertion of clear security assurances from the US. On Wednesday, he confirmed that these guarantees had not been obtained.
“Including a provision on security guarantees for Ukraine was essential,” Zelensky commented.
In response to queries about potentially walking away if security assurances weren’t included, he answered: “I seek a NATO pathway or an equivalent solution. Without security guarantees, a ceasefire won’t be feasible, and nothing will operate effectively.”
Even though there are no direct security commitments, the agreement contains language expressing US support for Ukraine’s pursuit of security assurances to secure enduring peace.
Zelensky insisted that Ukraine would not complete the agreement until he and Trump arrived at a consensus regarding security assurances and figured out how to incorporate them into the initial deal. On the other hand, Trump minimized the notion of direct US security guarantees, asserting that Europe should now assume those duties. He further mentioned that having American workers in Ukraine would provide “automatic security.”
Zelensky initially proposed the idea of a minerals agreement as a way to give the US a concrete reason to keep backing Ukraine. Trump has implied that, in return for access to minerals, Ukraine would obtain the “right to continue fighting,” with the US continuing to provide military gear and ammunition “until an agreement with Russia is achieved.”
The US president has also asserted that Russia is amenable to the presence of European peacekeepers in Ukraine. However, Russian Foreign Minister Sergei Lavrov has rejected this notion.
When Will the Agreement Be Signed?
Trump initially announced that the agreement would be finalized during Friday’s White House meeting. Although Ukrainian Prime Minister Shmyhal verified that the final draft of the agreement was ready, Zelensky’s adviser, Mykhaylo Podolyak, explained that only a framework agreement was meant to be signed.
Ultimately, no agreement was signed. Instead, the gathering turned into a clash between Trump and Zelensky in the Oval Office. During the heated exchange, Trump accused Zelensky of not showing enough gratitude for US support and cautioned him against “risking World War Three.”
“You have to finalize a deal, or we’re withdrawing,” Trump allegedly warned Zelensky. “You lack the leverage.”
Zelensky, in response, insisted that there could be “no compromises” with Russian President Vladimir Putin.
Shortly after and earlier than planned, Zelensky departed from the White House. Subsequently, the White House declared that the agreement was not completed, with Trump personally calling off the signing event.
Trump later posted on Truth Social, accusing Zelensky of having “disrespected the US in its cherished Oval Office” and stating: “He can come back when he is ready for peace.”
Currently, it is uncertain if or when the agreement will be executed.
Ukraine’s Abundance of Minerals
Kyiv estimates that Ukraine holds around 5% of the world’s “critical raw materials.” This includes approximately 19 million metric tons of confirmed graphite reserves, placing Ukraine among the top five global suppliers of this mineral, which is crucial for electric vehicle battery production.
Additionally, Ukraine has significant deposits of titanium and lithium. The country also claims to hold substantial reserves of rare earth elements—17 minerals essential for military technology, wind turbines, and electronic devices—though some experts dispute the exact scale of these reserves.
Adding to the complexity, certain mineral-abundant regions of Ukraine are presently under Russian control. Economy Minister Yulia Svyrydenko has indicated that mineral deposits with an estimated value of $350 billion are situated in areas occupied by Russia.
Another obstacle to mineral extraction is the widespread presence of unexploded landmines. Experts estimate that around 25% of Ukraine’s landmass is contaminated, particularly in the war-torn eastern regions.
There is also the issue of time. Even if the agreement is finalized, it could take years before the extraction and export of these resources yield tangible economic benefits.
“These resources are not stored in a warehouse ready for dispatch—they need to be developed,” explained Mylovanov. “Should the US invest, it could eventually prove advantageous for everyone involved.”
What Has Been Russia’s Response?
Russian President Vladimir Putin has yet to comment on the reported details of the US-Ukraine deal. However, on Monday, he told Russian state television that Moscow is prepared to “offer” mineral resources to American companies for joint ventures, including mining in Russia’s “new territories”—a reference to occupied areas of eastern Ukraine.
Putin downplayed the potential US-Ukraine agreement as inconsequential, asserting that Russia “certainly possesses, I want to stress, far more of these resources than Ukraine.”
“As for the new territories, we are ready to attract foreign partners to develop these regions, which have returned to the Russian Federation,” he added.
In the meantime, Kremlin spokesperson Dmitry Peskov indicated on Tuesday that the circumstances are still evolving: “Whether [Ukraine and the US] will finalize this agreement or something else, remains to be seen. No official announcements have been made on this issue yet.”