What Led to the Halt in US-Ukraine Mineral Agreement

Ukraine and US Unable to Conclude Deal on Rare Earth Minerals

This past Friday, Ukrainian President Volodymyr Zelensky and US President Donald Trump convened in Washington with the intention of signing a deal that would allow the US to tap into Ukraine’s rare earth mineral resources. Nevertheless, the session deviated from its intended purpose and concluded with a tense discussion involving Zelensky, Trump, and Vice President JD Vance. After Zelensky’s premature exit, the White House issued a statement confirming that the agreement remained unsigned.

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, Ukrainian Prime Minister Denys Shmyhal announced that Kyiv and Washington had finalized a draft of the agreement, which was released on Friday morning. The deal outlined the creation of an “investment fund” to support Ukraine’s reconstruction efforts.

Shmyhal stated that both nations would manage the fund on “equal terms.” Under the agreement, Ukraine would allocate 50% of its future revenue from state-owned mineral resources, oil, and gas to the fund. The proceeds would then be invested in initiatives aimed at enhancing Ukraine’s security, stability, and economic growth.

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

The specific terms of the minerals agreement seem to have intensified the friction between Trump and Zelensky. Initially, the US demanded a $500 billion stake in Ukraine’s mineral resources, which Zelensky turned down. It has been reported that this demand was subsequently rescinded.

According to Tymofiy Mylovanov, a former Ukrainian minister and head of the Kyiv School of Economics, Washington initially proposed an arrangement that undermined Ukraine’s sovereignty and would have led to economic collapse. However, he noted that the US has since revised its approach, now offering a more balanced deal based on co-ownership, without direct claims on past aid. This, he argued, could ultimately benefit Ukraine.

Trump has highlighted the financial perspective, claiming on Tuesday that the US has given Ukraine roughly $300 billion to $350 billion in aid and that a minerals agreement could help recoup this expenditure. Conversely, the Kiel Institute, a German research organization, estimates that the real US support totals $119 billion.

Are Security Assurances Part of the Agreement?

A central sticking point for Zelensky has been the inclusion of explicit security guarantees from the US. On Wednesday, he confirmed that no such guarantees had been secured.

“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.”

Although there are no explicit security commitments, the agreement contains language expressing US support for Ukraine’s efforts to obtain security guarantees to secure enduring peace.

Zelensky maintained that Ukraine would not finalize the agreement until he and Trump reached an understanding on security assurances and determined how to integrate them into the preliminary deal. Trump, however, downplayed the idea of direct US security guarantees, stating that such responsibilities should now be shouldered by Europe. He added that the presence of American workers in Ukraine would offer “automatic security.”

The concept of a minerals agreement was originally introduced by Zelensky as a means to provide the US with a tangible incentive to continue supporting Ukraine. Trump has suggested that, in exchange for mineral access, Ukraine would secure the “right to continue fighting” and that the US would keep supplying military equipment and ammunition “until a deal with Russia is reached.”

The US president has also claimed that Russia is open to allowing European peacekeepers in Ukraine. However, Russian Foreign Minister Sergei Lavrov has dismissed this possibility.

When Is the Agreement Expected to Be Signed?

Trump initially stated that the deal would be signed at Friday’s White House meeting. While Ukrainian Prime Minister Shmyhal confirmed that a final version of the agreement had been prepared, Zelensky’s adviser, Mykhaylo Podolyak, clarified that only a framework agreement was set to be signed.

However, no agreement was signed. Instead, the meeting escalated into a confrontation between Trump and Zelensky in the Oval Office. At one point, an angry Trump accused Zelensky of being insufficiently grateful for US assistance and warned that he was “gambling with World War Three.”

“You have to finalize a deal, or we’re withdrawing,” Trump allegedly warned Zelensky. “You lack the leverage.”

In reply, Zelensky emphasized that “no compromises” could be made 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 Mineral Wealth

Kyiv estimates that Ukraine’s reserves account for about 5% of the world’s “critical raw materials.” This comprises around 19 million metric tons of verified graphite reserves, positioning Ukraine as one of the top five global providers of this essential mineral for electric vehicle battery manufacturing.

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.

Further complicating the situation, some of the mineral-abundant regions in Ukraine are currently under Russian control. Economy Minister Yulia Svyrydenko states that mineral deposits valued at approximately $350 billion are situated in areas occupied by Russia.

An additional challenge to extracting minerals is the extensive presence of unexploded landmines. Experts estimate that about 25% of Ukraine’s territory is affected, especially in the war-ravaged eastern areas.

Time poses another issue. Even if the agreement reaches completion, it may take years before the mining and export of these resources deliver concrete economic advantages.

“These resources aren’t stored in a warehouse ready for delivery—they require development,” Mylovanov commented. “US investment could eventually be advantageous for all involved.”

How Has Russia Reacted?

Russian President Vladimir Putin has not yet made any remarks regarding the reported specifics of the US-Ukraine agreement. However, on Monday, he informed Russian state television that Moscow is ready to “offer” mineral resources to American firms for joint ventures, which includes mining in Russia’s “new territories”—referring to the occupied regions of eastern Ukraine.

Putin downplayed the potential US-Ukraine agreement, asserting that Russia “indisputably possesses, I want to stress, far more of these resources than Ukraine.”

“Regarding the new territories, we are open to involving foreign partners in developing these areas, which have rejoined the Russian Federation,” he stated.

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.”