The US and Ukraine are closing in on a mineral deal. What changed, and what comes next?

[February 25, 2025]  By SAMYA KULLAB

KYIV, Ukraine (AP) — Negotiations between U.S. and Ukrainian officials over continued American military aid in exchange for access to Ukraine’s valuable mineral resources are gaining traction after a rocky start, something Kyiv hopes will help secure long-term support for its defense against Russia.

Ukraine has offered to strike a deal with President Donald Trump which would supply the U.S. with rare earth elements — critical for various technologies. Trump said that he wanted such a deal earlier this month, and it was initially proposed last fall by Ukrainian President Volodymyr Zelenskyy as part of his plan to strengthen Kyiv’s hand in future negotiations with Moscow.

But Kyiv balked at initial U.S. offers, arguing they didn't contain adequate security assurances for Ukraine and that the proposed price tag of $500 billion would saddle generations of Ukrainians with debt.

But signs from both sides suggest the gap may be closing, and a deal could be on the horizon.

Here is a look at Ukraine’s rare earth industry and how a deal might come together:

What are rare earth elements?
Rare earth elements are a set of 17 elements that are essential to many kinds of consumer technology, including cellphones, hard drives and electric and hybrid vehicles.

It's unclear if Trump is seeking specific elements in Ukraine, which also has other minerals to offer.

“It can be lithium. It can be titanium, uranium, many others,” Yermak said. “It’s a lot.”

China, Trump’s chief geopolitical adversary, is the world’s largest producer of rare earth elements. Both the U.S and Europe have sought to reduce their dependence on Beijing.

For Ukraine, such a deal would ensure that its biggest and most consequential ally doesn't freeze military support. That would be devastating for the country, which has been at war for nearly three years after Russia's full-scale invasion on Feb. 24, 2022.

The idea also comes at a time when reliable and uninterrupted access to critical minerals is increasingly hard to come by globally.

What is the state of the Ukrainian minerals industry?
Ukraine’s rare earth elements are largely untapped because of the war and because of state policies regulating the mineral industry. The country also lacks good information to guide the development of rare earth mining.

Geological data is thin because mineral reserves are scattered across Ukraine, and existing studies are considered largely inadequate. The industry's true potential is clouded by insufficient research, according to businessmen and analysts.

In general, the outlook for Ukrainian natural resources is promising. The country's reserves of titanium, a key component for the aerospace, medical and automotive industries, are believed to be among Europe’s largest. Ukraine also holds some of Europe’s largest known reserves of lithium, which is required to produce batteries, ceramics and glass.

In 2021, the Ukrainian mineral industry accounted for 6.1% of the country’s gross domestic product and 30% of exports.

An estimated 40% of Ukraine's metallic mineral resources are inaccessible because of Russian occupation, according to data from We Build Ukraine, a Kyiv-based think tank. Ukraine has argued that it's in Trump’s interest to develop the remainder before Russian advances capture more.

The European Commission, the executive branch of the European Union, identified Ukraine as a potential supplier for more than 20 critical raw materials and concluded that if the country joins the 27-nation EU, it could strengthen the European economy.

What happens next?
Negotiations over a mineral deal between U.S. and Ukrainian officials have deepened in recent days as Kyiv has resisted initial proposals over their lack of specific assurances for Ukraine's security.

Trump administration officials have pressured Zelenskyy to accept a deal where Ukraine would divert $500 billion in profits from exploited minerals to Washington as compensation for its wartime support.

But Zelenskyy has rejected the offer, saying that while Kyiv welcomes partnering with the U.S. on minerals, he would not sign off on an agreement "that will be paid off by ten generations of Ukrainians.”

In a sign that negotiations on a deal were moving forward, Zelenskyy on Sunday told a forum in Kyiv marking the three-year anniversary of Russia's invasion that the U.S.' request for $500 billion had been taken “off the table.”

Trump’s special envoy to the Middle East, Steve Witkoff, said on CNN’s “State of the Union” the same day that he expects a deal allowing the U.S. to play a greater role in exploiting Ukraine’s mineral resources to be reached this week.

While U.S. companies have expressed interest in partnering with Ukraine on minerals, striking a formal deal will likely require new legislation, geological surveys and deeper negotiations on specific terms.

It's unclear what kind of security guarantees companies would require to risk working in Ukraine, even in the event of a ceasefire. And no one knows for sure what kind of financing agreements would underpin contracts between Ukraine and U.S companies.

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Susie Blann and Associated Press writers Michelle L. Price in Washington and Justin Spike in Kyiv contributed to this report.

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