Publication date:
March 3, 2025
US-Ukraine Mineral Deal Still Possible Despite Diplomatic Tensions
Ukrainian President Zelenskyy expresses readiness to sign a mineral deal with the US, despite recent diplomatic challenges.
Geopolitics
The potential mineral deal between the United States and Ukraine remains on the table, according to Ukrainian President Volodymyr Zelenskyy, despite recent diplomatic tensions. This development comes in the wake of a heated exchange between Zelenskyy and US President Donald Trump during a meeting at the Oval Office.
The proposed agreement aims to establish a jointly-owned reconstruction investment fund, with Ukraine contributing 50% of revenues from new ventures into state-owned natural resource assets. These assets include critical minerals such as lithium and cobalt, as well as oil and natural gas reserves. The materials in question are vital for both military production and the manufacturing of electric vehicle batteries, highlighting the strategic importance of the deal.
Zelenskyy, in an interview with the BBC, stated, "If we agreed to sign the minerals deal, we're ready to sign it." However, the path forward may not be straightforward. US Treasury Secretary Scott Bessent expressed skepticism, suggesting that an economic deal would be impossible without a peace agreement in place first.
The mineral deal has undergone significant changes since its initial proposal. Earlier versions included provisions for the US to recoup up to $500 billion in military aid through profit-sharing, while Ukraine sought robust security guarantees. The final draft, however, has softened these terms considerably.
The diplomatic fallout has prompted European leaders to convene an emergency summit in London, resulting in the formation of a "coalition of the willing" to support Ukrainian security. This coalition, led by the UK and France, aims to bolster European support for Ukraine, with UK Prime Minister Keir Starmer emphasizing that while US support remains crucial, "Europe must do the heavy lifting."
This situation underscores the complex interplay between geopolitical tensions, economic interests, and energy security in the ongoing war in Ukraine. The potential mineral deal, if realized, could have significant implications for global energy markets, particularly in the realm of critical minerals essential for the transition to cleaner energy technologies.
The proposed agreement aims to establish a jointly-owned reconstruction investment fund, with Ukraine contributing 50% of revenues from new ventures into state-owned natural resource assets. These assets include critical minerals such as lithium and cobalt, as well as oil and natural gas reserves. The materials in question are vital for both military production and the manufacturing of electric vehicle batteries, highlighting the strategic importance of the deal.
Zelenskyy, in an interview with the BBC, stated, "If we agreed to sign the minerals deal, we're ready to sign it." However, the path forward may not be straightforward. US Treasury Secretary Scott Bessent expressed skepticism, suggesting that an economic deal would be impossible without a peace agreement in place first.
The mineral deal has undergone significant changes since its initial proposal. Earlier versions included provisions for the US to recoup up to $500 billion in military aid through profit-sharing, while Ukraine sought robust security guarantees. The final draft, however, has softened these terms considerably.
The diplomatic fallout has prompted European leaders to convene an emergency summit in London, resulting in the formation of a "coalition of the willing" to support Ukrainian security. This coalition, led by the UK and France, aims to bolster European support for Ukraine, with UK Prime Minister Keir Starmer emphasizing that while US support remains crucial, "Europe must do the heavy lifting."
This situation underscores the complex interplay between geopolitical tensions, economic interests, and energy security in the ongoing war in Ukraine. The potential mineral deal, if realized, could have significant implications for global energy markets, particularly in the realm of critical minerals essential for the transition to cleaner energy technologies.
