WHAT’S IN THE U.S.-UKRAINE MINERAL DEAL?
On April 30th, 2025, after months of negotiations, the U.S. and Ukraine signed a mineral deal. While it’s too early to say what exactly this means for the future of U.S.-Ukrainian relations and what, if any, strategic advantage this might provide to Ukraine, it’s useful for us to understand the basics of what’s in the deal and what resources Ukraine has to offer.
The agreement establishes the groundwork for a fund to be operated by the U.S. International Development Finance Corporation on the American side and the Agency for Supporting Public-Private Partnership on the Ukrainian side. This fund, which will be supported by 50% of the revenue from new licenses related to the production of critical materials (such as rare earth minerals), oil, and gas, will contribute to the reconstruction of Ukraine. All income, contributions, and payments related to the fund will be tax-exempt by both countries, and the U.S. has agreed not to impose restrictive tariffs on minerals produced by the fund.
Ukraine controls an estimated 5% of the world’s supply of “critical raw materials,” representing an important pipeline of essential resources as the U.S. continues its trade war with China, which currently produces over 60% of the world’s rare earth minerals. The materials under Ukraine’s possession are vital for the success of renewable energy, military, and industrial infrastructure throughout the world.
As you can see in the chart below, a large portion (approximately 40%) of the resources relevant to the agreement are in the eastern parts of Ukraine currently under russian occupation. One estimate puts the dollar amount of Ukrainian minerals under russian occupation at $350 billion.
Ukraine’s critical raw materials include:
19 million tonnes, or 20% of the world’s supply of graphite, used to make batteries for electric vehicles
7% of Europe’s supply of titanium, used to make everything from airplanes to power stations to smartphones
500,000 metric tons, or ~33% of Europe’s lithium deposits, used to make batteries
Beryllium and uranium, used for nuclear applications
Large deposits of copper, lead, zinc, silver, nickel, cobalt, and manganese
Large deposits of “rare earth minerals,” a group of 17 specified elements used to make wind turbines, weapons, electronics, and other modern advanced products
Large deposits of gas, coal, and oil
As Ukraine continues to fight for its sovereignty, it’s important to remember that the modern world is heavily interconnected. The outcome of this conflict will shape not only Ukraine’s future but also the global balance of resources, technology, and power.
Sources:
KyivIndependent.com, May 1, 2025
Reuters.com, May 1, 2025
BBC.com, May 1, 2025
Center for Strategic and International Studies, January 8, 2024
