The United States and Ukraine are trying to hammer out a natural resources agreement that would give Washington access to Kyiv\u2019s untapped mineral riches in exchange for investments and what Ukraine hopes would be concrete security guarantees. <\/p>\n
Speaking to reporters on Wednesday, Ukraine\u2019s President Volodymyr Zelensky said the deal could be a \u201cbig success\u201d but that it would depend on talks with US President Donald Trump. <\/p>\n
He said the deal was just a \u201cframework\u201d and insisted that some key questions remained unanswered. <\/p>\n
Here is what we know \u2013 and don\u2019t know \u2013 about the agreement. <\/p>\n
The draft agreement seeks the establishment of a \u201creconstruction investment fund\u201d that would be jointly managed by the American and Ukrainian governments. <\/p>\n
Ukraine\u2019s Prime Minister Denys Shmyhal said Wednesday that Kyiv would be funneling half of the revenues from future natural resources projects into the fund, with money being reinvested in more developments. <\/p>\n
Shmyhal stressed the deal would exclude existing \u201cdeposits, facilities, licenses and royalties\u201d tied to Ukraine\u2019s natural resources. <\/p>\n
\u201cWe are only talking about future licenses, developments and infrastructure,\u201d he said. <\/p>\n
Trump said at the weekend that he\u2019s \u201ctrying to get the money back,\u201d referring to the aid provided to Ukraine under the previous administration. <\/p>\n
The US initially demanded a $500 billion share of Ukraine\u2019s rare earths and other minerals in exchange for the aid it has already provided to Kyiv. But Zelensky rejected that idea, saying that agreeing to it would amount to \u201cselling\u201d his country. Trump subsequently called Zelensky \u201ca dictator.\u201d <\/p>\n
Asked on Tuesday what Ukraine would receive in the mineral deal, Trump said: \u201c$350 billion and lots of equipment, military equipment, and the right to fight on,\u201d repeating a false claim he has made in the past. According to the Kiel Institute for the World Economy, a German think tank that closely tracks wartime aid to Ukraine, Washington had committed a total of about $124 billion in aid to Ukraine. <\/p>\n
Trump indicated security guarantees were not part of the deal, saying: \u201cWe\u2019ve pretty much negotiated our deal on rare earth and various other things,\u201d adding that \u201cwe\u2019ll be looking to\u201d future security for Ukraine \u201clater on.\u201d <\/p>\n
However, Zelensky said his country will not be repaying money given to it by Washington in the past as part of the deal. \u201cI will not accept (even) 10 cents of debt repayment in this deal. Otherwise, it will be a precedent,\u201d Zelensky said Wednesday at a news conference in Kyiv. <\/p>\n
Trump on Wednesday projected confidence that the natural resources deal would come to fruition, saying, \u201cWe\u2019re doing very well with Russia-Ukraine. President Zelensky is going to be coming on Friday. It\u2019s now confirmed, and we\u2019re going to be signing an agreement.\u201d <\/p>\n
Ukraine\u2019s mineral riches have long been eyed by its allies \u2013 and Kyiv has made them part of its appeal for support. Zelensky has made it clear he wants security guarantees to be part of the deal. <\/p>\n
Some deposits are already in areas that are under Russian occupation and Zelensky has argued that one reason why the West should support Ukraine in its fight against Moscow is to prevent more of these strategically important resources from falling into the Kremlin\u2019s hands. <\/p>\n
\u201cThe deposits of critical resources in Ukraine, along with Ukraine\u2019s globally important energy and food production potential, are among the key predatory objectives of the Russian Federation in this war. And this is our opportunity for growth,\u201d Zelensky said in October when presenting his \u201cVictory plan.\u201d <\/p>\n
Nataliya Katser-Buchkovska, the co-founder of the Ukrainian Sustainable Investment Fund, said that a deal cannot work without security guarantees. <\/p>\n
\u201c(For) the US to get access to these deposits, Ukraine must regain control over those territories, demine and rebuild the infrastructure,\u201d she said. <\/p>\n
Materials such as graphite, lithium, uranium and the 17 chemical elements known as rare earths are critical for economic growth and national security. <\/p>\n
They are essential to the production of electronics, clean energy technology, including wind turbines, energy networks and electric vehicles, as well as some weapons systems. <\/p>\n
The US largely depends on imports for the minerals it needs, many of which come from China, which has long dominated the market. <\/p>\n
China is responsible for nearly 90% of global processing of rare earth minerals, according to the Center for Strategic and International Studies (CSIS). On top of that, China is also the world\u2019s largest producer of graphite and titanium, and a major processor of lithium. <\/p>\n
Experts have long warned that relying on China for strategic materials is risky, but the latest trade tensions between Washington and Beijing make it even more important for the US to look for alternative suppliers. <\/p>\n
The US isn\u2019t the only one eyeing Ukraine\u2019s resources. The European Union signed a memorandum of understanding with Ukraine in 2021 outlining future investment opportunities in mineral mining. <\/p>\n
A similar document was prepared under the Biden administration last year. It said the US would promote investment opportunities in Ukraine\u2019s mining projects to American companies in exchange for Kyiv creating economic incentives and implementing good business and environmental practices. <\/p>\n
Trump has repeatedly referred to the deal as one on \u201crare earths\u201d but it\u2019s likely he was speaking more widely about critical minerals. <\/p>\n
Ukraine doesn\u2019t have globally significant reserves of rare earth minerals, but it does have some of the world\u2019s largest deposits of graphite, lithium, titanium, beryllium and uranium, all of which are classed by the US as critical minerals. <\/p>\n
But while Ukraine does have large reserves of these minerals, little has been done to develop the sector. Given the huge strain Russia\u2019s unprovoked aggression has put on the Ukrainian economy, it is unlikely that Kyiv would be able to extract these resources without foreign investment. <\/p>\n
\u201c\u2060Most projects remain in the exploration phase, with no large-scale processing facilities in place,\u201d said Katser-Buchkovska, who served as a member of the Ukrainian Parliament from 2014 to 2019 and was the head of a parliamentary committee on energy security and transition. <\/p>\n
\u201cExtracting rare minerals will be extremely expensive and will require years (and) billions of upfront investments, infrastructure development, and workforce training before production can even begin,\u201d she said, adding that Ukraine\u2019s resource extraction sector remains underdeveloped because of outdated infrastructure, war-related damage and lack of investment. <\/p>\n
Trump\u2019s return to the White House has resulted in a major shift in policy towards Russia. <\/p>\n
US and Russian officials meet in Saudi Arabia earlier this month to discuss the end of the war in Ukraine \u2013 without inviting Kyiv or any of its European allies to take part. <\/p>\n
Trump said on Monday that he was in \u201cserious discussions\u201d with Russia about ending the war and was \u201ctrying to do some economic development deals\u201d with Moscow, noting its \u201cmassive rare earth\u201d deposits. <\/p>\n
Russian President Vladimir Putin said Monday that Moscow was ready to work with American companies to mine rare earth mineral deposits in both Russia, and parts of Russian-occupied Ukraine. <\/p>\n
\u201cRussia is one of the leading countries when it comes to rare metal reserves. By the way, as for new territories, we are also ready to attract foreign partners \u2013 there are certain reserves there too,\u201d Putin said in an interview with Russian state media, referring to Russian-occupied areas of Ukraine. <\/p>\n<\/p>\n
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