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KYIV — To hear Ukrainian officials tell it, their country is one of the world’s top locations for crucial rare earths and other minerals needed to power a modern economy — and to make a fortune.
It was a pitch used to entice the transactional U.S. President Donald Trump into continuing his country’s support for Kyiv, and it worked. Trump is keen on Ukraine — but only when it comes to squeezing it for money, not for helping it secure a stable post-war peace.
“The critical minerals offer was a clear security moment for Ukraine. It has critically important resources like titanium, uranium and others. And if Russia gets its hands on those resources, it will be a disaster for Kyiv’s allies,” said a top official familiar with negotiations, speaking on condition of anonymity.
But the minerals gambit has since turned into a political disaster, and Ukraine may not even have all of the vast resource wealth it promised. Added to that, getting any minerals out of the ground will cost billions and could take decades — not close to the timeline Trump seemed to envision.
Originally, minerals were part of a peace deal pushed last year by Ukrainian President Volodymyr Zelenskyy. The package also included an invitation to join NATO and a commitment by the West to continue arming Ukraine.
Only the minerals are left from that effort, and they’re turning into an existential problem for Ukraine.
Kyiv was dumbfounded when Treasury Secretary Scott Bessent showed up in Ukraine in February with a draft agreement to hand over half of the country’s rare earth minerals to American companies. Zelenskyy reacted with outrage.
After Ukraine’s pushback, the two sides negotiated a more equitable agreement that Zelenskyy was supposed to sign in the White House Feb. 28. But that meeting turned into a disaster as Trump and Vice President JD Vance attacked the Ukrainian president, who was kicked out of the Oval Office with no deal.
The U.S. then came back with another proposal that returns to most of the most toxic elements of the first draft.
It offers no security guarantees and no further aid or investment, but gives Washington preferential access to all of Ukraine’s natural resources as well as financial control over the state reconstruction fund and all of its projects — until Kyiv repays billions to the U.S. for military aid that was originally disbursed as grants.
“The current draft significantly undermines the strategic balance, limiting Ukraine’s regulatory and tax autonomy,” said Volodymyr Landa, senior analyst with the Kyiv-based Center for Economic Strategy.
The agreement also jeopardizes Ukraine’s chances of joining the European Union because it violates EU competition and environmental legislation, Landa said. Meanwhile, paying billons to the U.S. is likely to spook investors who might otherwise be interested in helping Ukraine rebuild.
“Other partners are not likely to accept that their aid is being pumped out of Ukraine in favor of a third party,” Landa said.
But the Ukrainian government doesn’t want to incite another paroxysm of rage from Trump, so officials are refraining from criticizing the new version. Instead, Kyiv is trying to delicately tweak the proposed deal without setting Trump off.
“Last time, the Ukrainians had to explain that some things the U.S. wants from Ukraine will just not happen, as they are against our law and constitution. So let’s change the deal so it works. Now we have to do this talk once again,” the senior official said.
Hiding underground
The question lurking over the talks is how much mineral wealth Ukraine actually has.
The country has about 5 percent of the world’s reserves of rare earths, according to the U.N. That includes lithium, beryllium, niobium, tantalum, titanium, nickel, cobalt, graphite and phosphate, elements crucial for the energy, tech and defense sectors, said Alla Vasylenko, senior researcher with the Institute of Geology Studies of the National Academy of Science of Ukraine.
“Most of them were discovered in the 1960s-1980s. Back then, researchers were not paying attention to issues that are currently very important: the intended purpose of the lands and the form of ownership, environmental, sanitary and other restrictions for mining, as well as public opinion,” Vasylenko said.
“Yet the reserves were approved according to the Soviet system, which foreign investors do not understand. So, theoretically, we can claim that Ukraine has the biggest lithium reserves in Europe, but to understand their economic potential, we need to conduct additional studies of our deposits first.”
And getting that wealth out of the ground won’t be easy
The war has to end before Ukraine can extract the profits from its underdeveloped critical minerals mining industry. The country would also need to repair its battered energy grid.
“Ukraine needs investments, not only in mining but in the processing industry too. The investments should be primarily American — billions, and maybe tens of billions of dollars of direct investments, loans, equity, debt, various forms,” said Andriy Brodskyi, CEO of Velta Group, Ukraine’s largest private producer of titanium ore.
It took seven years for Velta to establish its titanium oxide mine. Lithium ore mining will take 10 to 15 years, said Denys Alyoshyn, chief strategy officer of UkrLithiumMining (ULM).
ULM bought a 20-year license to extract lithium ore from the Polokhivske deposit in central Ukraine’s Kirovohrad region in 2017 for $5 million. Polokhivske still looks an empty field with a few detectors, sensors and exploratory drills.
“For our lithium mine and enrichment plant to start working, we would need $350 million in investments. Our strategy is to find global strategic players who would finance our deposit, while we stay a reliable local partner,” Alyoshyn added.
The Ukrainian government’s original goal was for the United States to be that partner — while providing security to allow the country to recover from the war and to deter another Russian attack.
It’s not clear that the deal now being negotiated offers that trade-off.
