Ukraine's Rare Minerals Worth Over $15 Trillion: What Are They Used For, What Does the US Want?
The US had been demanding that Ukraine receive half of its revenues from critical minerals , oil, gas and key infrastructure such as ports through a joint investment fund .
Although negotiations have not yet been concluded, a preliminary agreement has it that Ukraine will transfer 50 percent of the revenues from the "future commercialization" of state-owned mineral resources to the fund. The funds, which will be generated from resources such as oil and gas, will be used to invest in projects in Ukraine.
'PART OF A BIGGER PLAN'
Under the deal, the US pledged to support Ukraine’s economic development. The mining deal was just one part of a larger plan, Ukrainian Deputy Prime Minister Olha Stefanishyna told the Financial Times.
The US has reportedly dropped Donald Trump’s demand for $500 billion in potential revenue from Ukraine’s resources, a requirement that Ukrainian President Volodymyr Zelenskyy had categorically rejected.
'10 GENERATIONS OF UKRAINIANS PAY'
On Sunday, Zelenskyy opposed the Trump administration’s demand for billions of dollars in Ukraine’s natural resources as part of the mining deal, saying, “I will not sign something that ten generations of Ukrainians will have to pay for.” Despite that, negotiations have gained momentum in recent days. The speaker of the Ukrainian parliament, Ruslan Stefanchuk, said Kiev aims to complete the deal by Feb. 24, which also coincides with the third anniversary of the war. Trump said on Monday that the deal was nearly complete. “We are telling Ukraine that they have very valuable rare earth minerals,” the president had said earlier.
WHAT ARE THE RARE EARTH ELEMENTS OF UKRAINE?
Ukraine has some of the largest reserves of critical minerals in Europe, much of which remains untapped. According to the Ukrainian Geological Institute, the country has rare earth elements such as lanthanum and cerium, used in televisions and lighting, neodymium, used in wind turbines and electric vehicle batteries, and erbium and yttrium, used in nuclear energy and laser technology.
EU-funded research suggests Ukraine also has scandium reserves, but the data is kept secret, the Independent reported.
Zelenskiy has been pushing for years to develop these resources. The Independent based its report on Forbes Ukraine, which puts the total value of Ukraine’s mineral resources at more than £ 12 trillion ($15 trillion).
In 2021, Zelenskiy offered tax breaks and investment rights to foreign investors to extract those minerals, but those efforts were put on hold when the war began in 2022.
53 PERCENT ARE IN THE REGION ANNEXED BY RUSSIA
Ukraine’s mineral resources, worth about $7.5 trillion or 53 percent of the country’s total reserves, are located in four regions annexed by Russia (Luhansk, Donetsk, Zaporizhia and Kherson). However, Kherson does not have much mineral value.
The Crimean Peninsula, occupied in 2014, has minerals worth 165 billion pounds (about $209 billion).
WHAT WILL HAPPEN NEXT?
Zelenskiy is expected to travel to Washington on Friday, February 28 (tomorrow) to meet with US President Donald Trump and sign the agreement. Ukrainian officials have expressed interest in US companies investing in these resources. However, for a formal agreement to come into force, legislative changes, geological research and negotiations on special conditions are required.
It remains unclear what kind of security guarantees U.S. companies will seek to start working in Ukraine and how financing agreements between Ukrainian and U.S. firms will take shape.
US President Donald Trump confirmed at a Cabinet meeting at the White House that Ukrainian President Volodymyr Zelenskyy will come to Washington on Friday to sign an agreement on rare earth minerals and other issues.
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