All About US-Ukraine Talks On Rare Earths Deal: What’s At Stake?
Rare earth minerals, a group of 17 critical elements, have emerged as a massive factor in geopolitics, given their importance in green tech, and because of China’s dominance over their deposits.
When former US diplomat Kurt Volker took the stage at ABP Network’s Ideas Of India 2025 last week, he weighed in on US President Donald Trump’s “transactional” world view vis-a-vis foreign policy, and how his actions are driven by the belief that the country has been treated unfairly on trade and its NATO-related obligations.
It was in this context that he mentioned ongoing US negotiations with Ukraine for a stake in revenues from its wealth of natural resources. The US sees the agreement as payback for the aid it has extended to Ukraine amid its war with Russia, which began three years ago. Ukraine denies it owes the US anything for the aid, but Kyiv sees the agreement as a bargaining chip for future security guarantees.
The negotiations are seen as part of wider discussions underway to end the war, with US and Russian officials holding discussions in Saudi Arabia, and a meeting between US President Donald Trump and Russian President Vladimir Putin said to be on the cards. Discussions are also underway between Russia and the US for “some economic development deals”, including over its rare earth deposits, as reported by CNN.
Rare earth minerals, a group of 17 critical elements, have emerged as a massive factor in geopolitics, given their importance in green technology, including electric vehicles, and military applications, and also because of China’s dominance over their global deposits.
“In December, China imposed a ban on exporting certain rare earth minerals to the US, after already placing restrictions on mineral exports the year before,” the BBC reported in an article about the proposed Ukraine-US deal.
Let’s break down the significance of the US-Ukraine talks:
Ukraine’s Natural Resource Wealth
According to the aforementioned BBC report, Kyiv estimates that “about 5% of the world’s ‘critical raw materials’ are in Ukraine”. “This includes some 19 million tonnes of proven reserves of graphite, which the Ukrainian Geological Survey state agency says makes the nation ‘one of the top five leading countries’ for the supply of the mineral,” the report added.
Graphite is used to make batteries for electric vehicles, as is lithium, of which Ukraine has a third of all European deposits, the report said.
Some of the mineral deposits, however, have been seized by Russia, the BBC report added. Quoting Ukraine’s economy minister Yulia Svyrydenko, the report said resources worth $350bn (approximately Rs 30 trillion) are lying in occupied territories.
The report also quoted a 2022 evaluation by SecDev, a geopolitical risk consultancy based in Canada, which said Russia had taken control of 63% of Ukraine’s coal mines and half of its caesium, tantalum, manganese, and rare earth deposits.
Where US-Ukraine Talks Stand
Ukrainian President Volodymyr Zelenskyy had initially introduced the proposal for a mineral agreement as part of the 'victory plan' he presented to Trump last September, the BBC noted.
“The question of mineral wealth is tied up in conflicts over US military and financial aid to Ukraine, and over how to end the war. Zelenskyy has said Ukraine must have Western arms and backing in any peace deal, to prevent a future Russian assault, while Mr Trump has insisted the war must end quickly, without offering such security guarantees,” a report in The New York Times said.
Various media reports say the understanding in Washington is that the presence of US economic interests in the region will of their own accord serve as a deterrent to any Russian aggression.
The negotiations for the US-Ukraine deal have seen several sticking points, including over the exact share of the US’ stake — Washington’s suggestions of full control as well as a 50:50 split have both been rejected by Ukraine, as reported by the media.
However, on Monday, Ukraine Deputy Prime Minister for European and Euro-Atlantic integration Olga Stefanishyna said on X that “Ukrainian and US teams are in the final stages of negotiations regarding the minerals agreement”. “The negotiations have been very constructive, with nearly all key details finalised. We are committed to completing this swiftly to proceed with its signature. We hope both US and UA leaders might sign and endorse it in Washington the soonest to showcase our commitment for decades to come,” she said. Trump also said on Monday they were close to a deal.
Meanwhile, AFP quoted a top official to report on Monday that the European Union has also “proposed an agreement with Ukraine on ‘critical materials… promising a ‘win-win’ deal”.
The report quoted the European commissioner for industrial strategy, Stephane Sejourne, as saying that “he had suggested a different potential deal to Ukrainian officials during a visit to Kyiv with EU chief Ursula von der Leyen”.
“Twenty-one of the 30 critical materials Europe needs can be provided by Ukraine in a win-win partnership,” Sejourne said after the meeting, according to the report. “The added value Europe offers is that we will never demand a deal that's not mutually beneficial.”
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