An agreement with a strategic relevance

A look at the UK-Ukraine minerals deal and its possible implications.

Corina Cristea, 04.07.2025, 14:00

Over the past 11 years, more precisely after Russia’s annexation of Crimea, the Americans have provided substantial military security aid to Ukraine, but  all this time no US president has demanded compensation for this aid. Until that is, Donald Trump. In exchange he wants Ukraine’s rare earths. Intensely promoted by the White House leader, the agreement that gives the United States preferential access to new transactions with Ukrainian minerals and will finance investments in the reconstruction of Ukraine was finally signed at the end of April, after months of difficult negotiations and uncertainties that persisted until the last moment. A central element of the agreement is the creation of a joint US-Ukraine fund into which 50% of the profits and royalties due to the Ukrainian state from the new premises for the exploitation of natural resources in Ukraine will be channelled.

These funds will be reinvested in new development projects. At the same time, any future military assistance provided by the US to Ukraine will be taken into account towards Washington’s contribution to the joint fund. What does the implementation of this economic partnership entail? Professor Ştefan Popescu, a doctor in the history of contemporary international relations from Sorbonne, explains:

“It entails, first of all, peace. This is the essential condition for the implementation of this truly important agreement. Its mere conclusion is a success, especially after all the difficulties that have stood in its path, both on the American and the Ukrainian side, and not to forget that Europe also wanted the lion’s share of Ukraine’s critical minerals. Its being signed alone boosts the morale of the Ukrainian establishment in Kyiv and of the Ukrainian military on the front, who are defending their country. They are basically presented with a prospect, the fact that the United States of America still has an interest in Ukraine.”

The interest of the US in Ukraine is indeed great. Essential for industries such as defence, high-tech, aerospace and green energy, critical minerals include, among others, nickel and lithium, but also rare earths, a group of 17 metals essential for many high-tech electronic products, such as mobile phones, plasma TVs, computers, electrical car batteries, renewable energy systems and even military equipment. These are metals for which there are no viable substitutes. Total reserves of such minerals worldwide are estimated at around 99 million tonnes, of which around 36 million tonnes can be found in China, 19 million tonnes in Russia and the neighbouring countries and 13 million tonnes in the US. Without currently having any commercially operational rare earth mines, Ukraine appears to have 22 of the 34 minerals identified by the European Union as essential.  

According to Ukraine’s Geological Institute, the country is also home to lanthanum and cerium, used for televisions and lighting, neodymium, used in wind turbines and electric batteries, but also erbium and yttrium, whose applications range from nuclear energy to lasers. Ukraine is also a potential key supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel, according to the World Economic Forum. Vital for batteries, ceramics and glass, lithium is found in very large quantities in Ukraine – about 500 thousand tonnes, located in the centre, east and southeast of the country – one of the largest confirmed reserves in Europe, according to the Geological Institute in Ukraine. The country also has reserves of titanium, but also graphite, namely 20% of global resources, an essential component of batteries for electric vehicles and nuclear reactors, as well as significant reserves of coal.

However, a large part of Ukraine’s metal resources are now under Russian occupation, according to estimates by Ukrainian think tanks. How is this agreement viewed and why is it so important? In the Western world, the document signed by Washington and Kyiv is considered historic, while in Moscow it is ridiculed, with the Russians claiming that it transforms Ukraine into an American mining colony. Analysts, however, said it might realign the US and Ukraine, narrowing the possibility of a future peace agreement that may benefit Moscow. Moreover, in an interview for CBS television, the Ukrainian ambassador to the United States, Oksana Markarova, said the agreement is an important part of future security guarantees. A very important aspect because an American economic presence is always accompanied by a military presence, and this situation can also have benefits for Romania, says Romanian military analyst Radu Tudor:

“If the gas, for example, that Ukraine has at its disposal could be in storage and exploitation in the Black Sea, then an American presence in the gas exploitation in the Black Sea or on the territory of Ukraine, near the border with Romania, could be exceptional news. Why? Because an American economic presence is always accompanied by a military presence. They will protect their exploitations, they will protect their people who work in that area, they will protect their billion-dollar businesses and they can only do this by deploying troops. The only country on NATO’s eastern flank that can ensure a consistent American military presence to protect interests in Ukraine is Romania. We have a huge security interest in American troops not leaving Romania, in their numbers not being reduced, and what’s more, the Ukrainians are helping us through an expanded economic agreement with energy resources, so that the Americans have troops available nearby to protect these billion-dollar businesses.”

Military analyst Radu Tudor adds that, “Russia will remain a threat, it will not give up its aggressive policy, but the Americans know from history and it’s what they have done after World War II and where there is big business, there is also security and military protection.”