Officials from the US-Ukraine Reconstruction Investment Fund this week visited the Kirovohrad region in south-central Ukraine. This was the first prospecting trip to result from the minerals agreement signed by the two countries last spring.
During his first term as president, Donald Trump established the US International Development Finance Corporation (DFC) with the goal of securing rare earth elements and critical minerals for the US. China is streaking ahead in the race for these materials, which are essential for digital technology and the transition to green energy.
Ukraine is known to hold vast deposits of rare earths and critical minerals. This is believed to have been a motivation for Russia’s full-scale invasion. Ukrainians hope these resources may now persuade Trump to support their country in its defensive war against Russia, despite Trump’s self-professed admiration for Vladimir Putin. In defending the deal, Ukrainians point out that it gives them access to US investment and technology, and helps Trump justify aid to Ukraine with his isolationist Maga base.
The US-Ukrainian mission visited a mine and a processing plant for titanium, which is used in defence, aerospace and high-tech industries. Zirconium and hafnium, a rare earth metal used in nuclear energy, may be extracted from the same area in the future.
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The turbulent history of the US-Ukraine minerals deal, and its rapid implementation at a time of escalating Russian attacks, are both indicative of the value placed on these much-coveted resources. Geological surveys date from Soviet times and are unreliable, but Ukraine is said to possess trillions of dollars’ worth of such wealth. Much of it is believed to be concentrated in the Russian-occupied east of the country.
Volodymyr Zelenskiy visited then-candidate Trump in Manhattan in September 2024 to propose a trade-off between Ukraine’s minerals and US security assistance, according to the New York Times. “In fact, president Zelenskiy mentioned it publicly in the Ukrainian parliament long before the US election,” Oleksandr Vasiuk, who heads the Ukraine-US Strategic Partnership committee in the Verkhovna Rada, said in an interview. “The idea has been in the air for a while.”
Trump predicted the agreement at the beginning of February when he said: “We’re looking to do a deal with Ukraine, where they’re going to secure what we’re giving them with their rare earths and other things. We want a guarantee.”
On February 24th, the third anniversary of the full-scale Russian invasion, Putin told Russian state television that Russia has “an order of magnitude” more rare earth metals than Ukraine, and that he was ready to develop those deposits with the US. That included Russian-occupied areas of Ukraine, Putin said.
“I don’t believe the US would co-operate with Russia on excavating or developing these mineral resources,” Vasiuk says. “That is a nonsense, because no matter what Russia says, the occupation of these territories is illegal.”
On the day of Putin’s offer to the US, the Trump administration voted twice with Russia – and against Ukraine – in the UN Security Council. Four days later, Trump and vice-president JD Vance belittled Zelenskiy and threw him out of the Oval Office before he could sign the initial version of the minerals deal. That text would have reserved $500 billion’ (€423 billion) worth of Ukrainian minerals for Washington, a sum that vastly inflated the amount of US aid to Ukraine.
The Ukrainian government sought advice from international legal experts. Over two months, Vasiuk says, “Ukraine pushed back and protected its interests”. The agreement that was finally signed by US treasury secretary Scott Bessent and then Ukrainian economy minister Yulia Svyrydenko is more favourable – or at least less detrimental – to Ukraine. Nearly three-quarters of deputies in the Verkhovna Rada, Ukraine’s parliament, voted to ratify it.
The new agreement encompasses hydrocarbons and infrastructure, as well as rare earths and critical minerals. The US and Ukraine deny it barters natural resources for protection, but the text counts US assistance from the date of signing as capital investment in the fund. Contrary to the first draft, it does not demand that Ukraine pay back past US assistance. Where Ukrainian law and the minerals deal conflict, the agreement takes precedence. The US cannot be taxed on its share, which must be awarded in dollars. Details of who gets what is deferred to a later agreement.
Zelenskiy did not achieve his core objective of a watertight US promise to protect Ukraine from future Russian aggression in the event of a peace accord. Ukrainians are somewhat reassured by the agreement’s claim to be “an expression of a broader, long-term strategic alignment between their peoples and governments, and a tangible demonstration of US support for Ukraine’s security, prosperity, reconstruction and integration into global economic frameworks”.
The statement issued by the White House was more direct, saying, “This partnership sends a strong message to Russia – the US has skin in the game.”
Critics in the West described the agreement as exploitative, extortionate and neocolonial, allegations that are strongly rejected by Ukrainian officials including Vasiuk.
“The new deal is not just money,” Vasiuk says. “It is access to technology and modern techniques of excavation. And it will contribute to the transparency of Ukrainian business. I believe there will be very little room for corruption.” Other Ukrainians told me they preferred that the US rather than Russia or Ukrainian oligarchs profit would from their country’s mineral wealth.
A 2021 memorandum of understanding between the European Union and Ukraine on a strategic partnership on raw materials provided for “close collaboration in geological and mining exploration, deposit identification and assessment, extraction, refining/processing, transport and monitoring”.
The US-Ukraine agreement alludes three times to Ukraine’s obligations to the EU but gives the US first option on investments and purchases. Brussels cannot be happy.
