The much-publicized US-Ukraine mineral extraction agreement, once hailed as a breakthrough in strategic partnership, is now facing significant hurdles due to outdated geological data, geopolitical risks from the ongoing war, and weaker-than-expected rare earth reserves, according to industry experts cited by the Washington Post on May 3.
US President Donald Trump has been urging Ukraine to initiate negotiations with Russia amid the ongoing conflict. He also advocated for an initial version of the mineral deal that would have granted the US exclusive control over profits, imposed a 4% interest rate, and retroactively converted past US aid into debt. While Ukraine signed what is reportedly a more balanced version, the final documents remain unpublished and still require parliamentary approval.
The agreement includes US rights to extract Ukraine’s mineral, oil, and gas resources as part of a broader strategy to repay future US military aid to Kyiv and support the country’s reconstruction. However, analysts suggest that shipments of crucial materials such as titanium, lithium, and graphite are unlikely to begin for at least another decade.
“This absolutely is not a solution to these immediate problems,” stated Reed Blakemore of the Atlantic Council Global Energy Center, highlighting the US’s continued dependence on China for metals crucial to weapons, electronics, and battery production.
Ukraine’s mining sector has seen minimal investment over the past few decades, with most geological data still based on Soviet-era surveys. CDM Engineering Ukraine teams have only recently begun conducting groundwater testing at sites like the Polokhivske lithium deposit in Kirovohrad Oblast.
Despite Trump-era claims estimating Ukraine’s rare earth value at $500 billion, experts have called these figures largely unfounded. Moreover, the country lacks confirmed reserves of the 17 rare earth metals vital to defense and electronics. Key oil and gas fields remain in conflict zones, while significant infrastructure damage continues to pose logistical challenges and deter investors.
Former Biden administration official Zumwalt-Forbes and SAFE minerals expert Abigail Hunter both emphasized that even Ukraine’s confirmed lithium reserves are modest and predominantly located in Russian-occupied territories. Hunter added that infrastructure damage further undermines potential investor returns.
Despite these substantial setbacks, some analysts maintain that the deal holds political value. “It signals that the US is engaged in Ukraine’s economy as a strategic partner,” said Jay Truesdale of TD International, acknowledging the possibility of long-term investment benefits.
