What's behind the US-Ukraine deal on rare earth minerals?

US interest in Ukraine's rare earth resources grows amid rising geopolitical tensions over access.

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Ukrainian President Volodymyr Zelenskyy is set to sign a deal with US President Donald Trump on Friday that will grant the United States access to Ukraine's vast reserves of rare earth and critical minerals.

The agreement, which has already seen preliminary terms approved, will focus on utilizing Ukraine’s mineral resources to support reconstruction efforts and economic recovery following the ongoing war with Russia.

According to Zelenskyy, the deal aims to help US taxpayers recoup some of the financial aid sent to Ukraine during the conflict, which began in February 2022 when Russia launched a full-scale invasion.

Both parties will begin negotiations on a Reconstruction Investment Fund (RIF) after the agreement is signed, a fund that will be used to manage the revenues generated from Ukraine's natural resources. These funds will support Ukraine's rebuilding process, development projects, infrastructure, and state-owned enterprises.

Under the terms of the deal, Ukraine will contribute 50 percent of the revenues from state-owned resources, which includes rare earth minerals, oil, and gas, to the joint fund.

While the details of the remaining 50 percent remain unclear, the agreement outlines that the US will commit to supporting Ukraine’s long-term economic stability but will not offer direct security guarantees.

This deal is set against the backdrop of US aid to Ukraine, which has been substantial. According to the Kiel Institute for the World Economy, the US has sent €114 billion ($118bn) in military, financial, and humanitarian aid. The US Department of Defense's figure, which includes the cost of replenishing Ukraine's defence stocks, is even higher, reaching nearly $183bn.

Ukraine’s vast mineral reserves

Ukraine’s mineral wealth is crucial to the deal. The country holds deposits of 22 out of the 34 minerals classified as 'critical' by the European Union.

These minerals include rare earth elements (REEs), such as lanthanum, cerium, and neodymium, which are essential for high-tech applications in industries like electronics, defence, aerospace, and renewable energy.

Ukraine also holds substantial reserves of precious and non-ferrous metals, including titanium, zirconium, graphite, and lithium, the latter of which is largely untapped but considered one of Europe’s largest reserves, estimated at 500,000 tonnes.

According to the United Nations' Russian-language news service, Ukraine’s critical mineral reserves accounted for approximately 5 percent of the global supply in 2022. Notably, Ukraine produces 7 percent of the world's titanium.

However, the majority of these critical mineral deposits are located in areas controlled by Russia, including parts of the Donetsk and Luhansk regions, which are currently under Russian occupation.

Where are these minerals located?

Before Russia’s invasion, Ukraine had registered 20,000 mineral deposits, with 8,700 proven, spanning a range of 117 out of the 120 most globally used metals and minerals. The most significant deposits of minerals such as coal, gas, iron, manganese, nickel, ore, titanium, and uranium are located in the eastern part of Ukraine, which is now under Russian control.

Estimates by Ukrainian think tanks, including We Build Ukraine and the National Institute of Strategic Studies, suggest that Russia controls approximately 40 percent of Ukraine’s metal resources, including key mineral reserves in the Donetsk and Luhansk regions.

One of the most significant rare earth deposits in Ukraine is the Shevchenko Field of Lithium Ores, located in Donetsk. This deposit, among others, holds immense value in the context of global demand for rare earth elements, crucial for advanced technologies.

Photo: AFP, Reuters

Ukraine’s natural resource wealth

Despite the ongoing war, Ukraine's mineral wealth remains one of the country's most valuable assets. According to Ukraine Invest, the government’s investment promotion office, the country’s natural resources are worth trillions of dollars. The areas with the richest natural wealth are concentrated in the east, which is currently under Russian control. The loss of access to these resources has severely impacted Ukraine's economy and disrupted global supply chains, particularly in high-tech and defence sectors.

Nevertheless, Ukraine's mining sector continues to be a vital part of its economy. Despite the challenges of the war, international interest in securing long-term investment opportunities in Ukraine’s natural resources remains strong.

Global competition for rare earth minerals

The deal also places Ukraine's critical mineral reserves into the broader context of global competition for rare earth elements.

According to the US Geological Survey’s Mineral Commodity Summaries 2025, China holds the largest reserves of rare earth minerals, followed by Brazil, India, Australia, and Russia. These minerals are essential for various high-tech applications, and their global demand has led countries to secure access to reserves in politically unstable regions, such as Ukraine.

The US’s interest in Ukraine’s rare earth resources comes at a time when geopolitical tensions over access to these minerals are intensifying, with countries seeking to reduce dependency on China, which controls much of the global supply chain for processing rare earth elements.

This partnership between Ukraine and the US is expected to bolster both nations' economic interests, while also addressing long-term reconstruction needs for Ukraine, which will continue to face significant challenges as the war progresses.