Ukraine and the United States have agreed on the terms of a critical minerals deal, which could be signed by President Volodymyr Zelenskyy during a visit to the US, according to a senior Ukrainian official.
US President Donald Trump has insisted Ukraine provide access to its rare Earth minerals as compensation for the billions of dollars worth of wartime aid it received under former president Joe Biden.
The US Department of Defense estimates the country has spent around US$180 billion ($283 billion) on military aid to Ukraine.
The agreement would allow the US to jointly develop Ukraine’s mineral resources, with revenues directed to a newly established fund that would be “joint for Ukraine and America”, according to a senior Ukrainian source who spoke to AFP.
The US interest in Ukrainian minerals has been a central component in ongoing peace talks that seek to end the war in Ukraine.
Ukraine has also asked for security guarantees from the US as part of any peace agreement.
Which critical minerals does Ukraine have?
The US has proposed securing half of Ukraine’s critical minerals, including graphite, uranium, titanium and lithium, which is essential for electric car batteries.
Ukraine has deposits of 22 of the 34 minerals identified as critical, as reported by Reuters. The country is estimated to hold around 5 per cent of the world’s mineral resources.
Ukraine also claims to have 500,000 tons of lithium reserves and one-fifth of the world’s graphite, a crucial part of nuclear power stations, according to European Commission research.
Once extracted, critical minerals must be processed in factories, a sector largely controlled by China.
The country refines about 35 per cent of the world’s nickel and 50-70 per cent of global lithium and cobalt, according to the International Energy Agency.
China also handles nearly 90 per cent of rare earth mineral processing, according to the Center for Strategic and International Studies.
Currently, the US relies on China for these minerals, but the deal with Ukraine could help reduce this dependency.
Why does the US want them?
China has long dominated the global production of strategically important materials like rare earth minerals and is also a key exporter.
Meanwhile, the US depends entirely on imports for 12 key minerals and imports an additional 50 per cent of several other rare elements.
China’s dominance over vital minerals is especially significant as it faces .
If tariffs escalate between the two nations, US access to China’s processed minerals could be under threat.
Will the US offer security to Ukraine in return for minerals?
According to a Ukrainian official, the draft agreement includes a reference to “security”, though it did not explicitly outline any potential US commitments, one of Ukraine’s previous demands for a deal.
“There is a general clause that says America will invest in a stable and prosperous sovereign Ukraine, that it works for a lasting peace, and that America supports efforts to guarantee security,” the source told AFP.
The source said the US had cut clauses that would have been unfavourable to Ukraine, including that it provide “$500 billion” ($788.5 billion) worth of resources.
The minerals deal is also key to Ukraine’s efforts to gain support from the US as .
Trump told reporters he is expecting his Ukrainian counterpart in Washington to sign the deal later this week.
