U.S.-Ukraine Mineral Deal Aims to Secure Critical Resources Amid War

President Donald Trump has announced that Ukrainian President Volodymyr Zelenskyy is prepared to sign an agreement with the United States that would provide valuable minerals in exchange for potential additional military aid. The deal comes as Ukraine enters the fourth year of its conflict with Russia and seeks to maintain U.S. support as a key security guarantor.

A draft agreement outlines that Ukraine will allocate half of its revenues from minerals, hydrocarbons, oil, natural gas, and other extractable materials into a Reconstruction Investment Fund, jointly managed by the U.S. and Ukraine. These funds would be reinvested annually to bolster Ukraine’s safety, security, and economic recovery. While the agreement mentions U.S. support for Ukraine’s security guarantees, it does not specify their nature or providers.

Ukraine holds around 5% of the world’s rare-earth metal reserves, making it a significant player in global mineral supply chains. However, analysts like Robert Muggah from SecDev caution that the scale of extractable critical minerals in Ukraine may be overstated. A report from the Center for International Relations and Sustainable Development (CIRSD) found that much of Ukraine’s mineral wealth is located in conflict-affected areas such as Luhansk, Donetsk, Zaporizhzhya, and Dnipropetrovsk.

Mining operations in Ukraine face challenges due to infrastructure damage from the war, with the Center for Strategic and International Studies (CSIS) reporting that nearly half of Ukraine’s power-generation capacity has been destroyed. This poses significant risks for investments in mining, which is highly energy-intensive.

Ukraine’s key minerals include:

• Titanium: Ukraine ranks among the top ten countries in titanium reserves and contributes 7% of global production. The metal is essential in aerospace and military applications, with past U.S. military projects relying on Ukrainian titanium.
• Lithium: Despite holding one of Europe’s largest lithium reserves, Ukraine has yet to commence mining operations due to high investment costs and security risks.
• Graphite: While China dominates global graphite production, Ukraine possesses significant deposits, though its current output remains low.
• Nickel and Cobalt: Both metals are critical for battery production and aerospace applications. Ukraine’s cobalt production remains minimal, but its reserves could become strategically important.

With ongoing conflict and infrastructure constraints, Ukraine’s ability to develop its mineral sector remains uncertain. However, its resources may play a key role in securing U.S. and European supply chains for critical materials in the future.