Ukrainian President Volodymyr Zelensky has rejected a U.S. proposal that would have granted the United States access to its rare earth minerals, citing the deal’s failure to provide security guarantees.
Why It Matters
The agreement, presented by U.S. Treasury Secretary Scott Bessent during a visit to Kyiv, sought to give American companies 50 percent ownership of Ukraine’s rare earth mineral deposits. The U.S. framed the deal as a way for Ukraine to “compensate” for past and future military aid.
What To Know
Zelensky declined to sign the proposal, arguing that it was too focused on U.S. interests and lacked provisions that would help deter future Russian aggression, The Associated Press reported.
“I didn’t let the ministers sign a relevant agreement because in my view it is not ready to protect us, our interest,” Zelensky said on Saturday at the Munich Security Conference.
The rejection has led to tensions between Kyiv and Washington, with White House officials describing Zelensky’s stance as “shortsighted.” President Donald Trump‘s administration, meanwhile, continues to push for access to Ukraine’s mineral resources, arguing that securing these materials would strengthen U.S. economic and national security interests while reducing dependence on China.
Alex Babenko/AP Photo
What Are Rare Earth Minerals?
The minerals are a group of 17 metallic elements essential to modern technology, including electric vehicles, military equipment, and renewable energy solutions. These elements—such as neodymium, europium, and yttrium—are used in everything from smartphones to guided missile systems.
Despite their name, rare earth minerals are not scarce, but are difficult to extract in economically viable concentrations. Most of the world’s processing capacity for these materials is located in China, which dominates refining with nearly 90 percent of global capacity.
According to the U.S. Geological Survey, China also accounts for almost half the world’s known rare earth reserves, giving it significant control over the supply chain.
Ukraine is believed to hold substantial reserves of these critical minerals, including lithium, titanium, graphite, and uranium. According to Ukraine’s Ministry of Environmental Protection and Natural Resources, the country has deposits of 22 of the 34 materials the European Union has identified as critical for national security. It makes Kyiv a potentially important player in global supply chains, particularly as Western nations seek alternatives to Chinese dominance in the sector.
Why Does Trump Want These minerals?
Trump has publicly stated that securing these resources is crucial for U.S. national security and reducing reliance on China.
“I want to have the security of rare earth. We’re putting in hundreds of billions of dollars. They have great rare earth, and I want security of the rare earth, and they’re willing to do it,” Trump told Fox News.
Markus Schreiber/AP Photo
Rather than offering direct payment, Washington framed the deal as a way for Kyiv to transfer ownership of its rare earth resources in exchange for continued military support. However, the proposal did not include explicit security guarantees that would commit the U.S. to defending Ukraine in the event of further Russian aggression.
White House National Security Council spokesman Brian Hughes defended the proposal, arguing that “binding economic ties with the United States will be the best guarantee against future aggression and an integral part of lasting peace.”.
Why Did Zelensky Reject the Deal?
Zelensky and his administration rejected the proposal primarily due to the lack of cast-iron security guarantees, which Ukrainian officials viewed as essential given the ongoing war with Russia.
“For me is very important the connection between some kind of security guarantees and some kind of investment,” Zelensky told The Associated Press.
A senior Ukrainian official, speaking on condition of anonymity, described the deal as “colonial” and said it failed to address broader strategic interests.
Former Ukrainian Foreign Minister Dmytro Kuleba also criticized the offer, pointing out that Kyiv had already signed a strategic partnership with the European Union regarding its critical resources.
“Today, Trump claims Ukraine’s raw materials as a way to fuel America’s economy. But these raw materials are not only Ukrainian, they’re also European,” Kuleba told Politico. “Why should Europe give away the resources that should fuel its own economy to America?”
Which Countries Control Rare Earth Minerals?
China dominates rare earth production, controlling nearly 90 percent of global refining capacity and also accounts for about half of the world’s known reserves, making it the leading supplier in the market.
Australia has emerged as a growing producer, with significant reserves and increasing efforts to scale up production. The United States holds some deposits, but remains heavily reliant on imports, particularly for processing.
Russia also possesses large rare earth reserves. Its invasion of Ukraine has raised concerns about potential disruptions to the supply chain in the U.S. and Europe.
Meanwhile, signs indicate that Ukraine’s plans to develop its domestic rare earth sector have stalled due to the ongoing war.
Canada is positioning itself as a potential alternative supplier as Western nations look to diversify sources and reduce dependence on China.
What Happens Next?
The Trump administration and Ukrainian officials are expected to continue negotiations on a revised agreement. Zelensky has instructed his team to draft a counterproposal that includes explicit security guarantees, while still allowing the U.S. access to its mineral deposits.
Ukraine is also preparing to push back against the U.S. effort to dominate its mineral sector. “We have to talk about it as investments; and it needs to be formulated correctly,” Zelensky said. “And we can think about how to divide profits. But all of this would be tied to security guarantees.”
For now, Ukraine’s rare earth minerals remain both a strategic asset and a geopolitical bargaining chip as the country seeks to balance its need for economic investment with long-term security concerns.
