Unlocking Ukraine’s Mineral Wealth Requires More Than a Trump Deal

The US appears to have secured a stake in future revenues from Ukraine’s mineral resources, with an agreement between the two countries expected to be signed imminently.

After details have been finalised, Ukraine could provide 50% of future revenues from its natural resources into a jointly managed US–Ukraine fund, according to the agreement published this week.

Both parties will see strategic benefits from the arrangement. Ukraine may see a hastened development of its minerals industry, while the US will ensure that China does not become a mineral beneficiary of any Russo-Ukrainian peace deal. A future Ukraine that is integrated into Western rather than Chinese supply chains has a high strategic value to Western thinkers.

Indeed, one Republican insider from Trump’s first term argues that securing resources simply to prevent China gaining control of them, regardless of whether the resource is ultimately developed, may be part of the US administration’s strategy. Negotiation of the agreement has been fraught, with reports of aggressive tactics from multiple teams with unclear mandates pushing sometimes outrageous demands.

Bucking China's Market Dominance

To be successful for Ukraine, attracting private sector capital into the country will be key. This will require a guarantee of Ukraine’s security and other forms of financial support. Any critical mineral projects will have to compete in markets dominated by China, where prices are currently low. Revenues are also unlikely to reach the billions that Trump has mentioned.

Ukraine has competitive positions in titanium, graphite, lithium and some rare earth elements, as well as potentially germanium, according to Roman Opimakh, former head of the Ukrainian Geological Survey in discussion with this author.

But these assets will require investment amid a challenging market.

Take lithium, which is used in electric car batteries. Ukraine has three potential hard rock deposits of lithium, two of them far from the front line: the Dobra and Polokhivske deposits.

Polokhivske is located in the central part of Ukraine, 200 miles to the southeast of Kiev. The company that owns the license, ULM, plans to produce lithium concentrate in 2028 from petalite ore. Yet this will still need to be converted into lithium carbonate, and then battery-grade material, for use in batteries.

Ukraine also has deposits of graphite, another mineral used in lithium-ion batteries. Australia's Volt Resources already produces material in the country from the Zavalievsky mine, which it says has been producing since 1934. But this material has to be further processed before it can be used in batteries. The company says it is looking at building a plant to do this in the US, but this will require further capital.

Just to develop the lithium and graphite deposits already discovered would require almost $1 billion, according to Opimakh’s estimates.

Yet lithium prices have fallen by 80% since 2022, and investors currently struggle to be convinced of the need for more lithium supply in jurisdictions as safe as Australia. What incentives will there be to invest in Ukraine?

Trump's Short Fuse on Electric Vehicles

Policymakers will have work to do before enacting their designs. The US and Europe still need to build the industries that will buy the critical minerals before they can be of any geopolitical benefit, or risk these minerals heading to China.

This is somewhat undermined by the US’s current direction on renewable energy. Trump has vowed to gut both Biden’s electric vehicle and clean energy subsidies, which provided the demand support needed to build battery factories and clean energy supply chains in the West. 

As a result, China still effectively controls prices for many of these minerals via its dominance of supply and demand. As the biggest consumer of minerals, its domestic policies can impact prices. And as a large supplier of processed minerals, it can also swamp markets with supply.

Beijing is unlikely to sit back and let the Western world reduce its dominance, which is key to its strategy to lead the world in manufacturing hi-tech products.

Trump’s approach to minerals echoes how China has long thought of the world: Beijing pioneered the use of resources-for-loans deals in the early to mid-2000s, seeking to build up resilient supply chains.

But the biggest question is how the US can involve its private sector in meeting its geopolitical goals. It will need to further support private companies to invest in Ukraine.

The current wording in the agreement, whereby the US maintains ‘a long-term financial commitment to the development of a stable and economically prosperous Ukraine’, is unlikely to cut it.

There will need to be investment support for projects from the US International Development Finance Corporation, for example.

Europe should also be involved in helping to finance mining projects. In July 2021, Ukraine and the EU signed a Memorandum on Strategic Partnership in Raw Materials, yet Europe was left out of the US agreement struck this week.

Signing a deal to secure a stake in Ukraine’s future mineral revenues does not protect the US or its companies from the vagaries of the global markets for these minerals, however, or ensure that it will prevail in the broader challenge of competing with China.

In this new era that Trump has ushered in, the US will need to have the staying power to follow through on its strategy once the ink is dry on the agreement this week.

© Henry Sanderson, 2025, published by RUSI with permission of the author

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