The EU is seizing the opportunity to revive an existing agreement with Ukraine on natural resources, after US President Donald Trump’s ugly spat with Ukrainian President Volodymyr Zelenskyy in Washington on Friday.
Trump had been angling hard for his own deal with Ukraine on minerals, but after his televised meeting with Zelenskyy went south, he booted the Ukrainian leader from the White House with their draft agreement still unsigned.
EU countries now have a chance to breathe new life into their 2021 deal to help Ukraine exploit its mineral riches. The EU has been seeking to revive the partnership and speed up progress.
When the EU and Ukraine first inked their partnership on critical raw materials (CRMs), the deal was seen as a bid to secure supplies of resources crucial for the green energy transition while reducing heavy dependence on China for materials such as lithium, cobalt, natural graphite and rare earths.
Guaranteeing supplies of rare minerals may be crucial to the EU’s future security, especially now that European countries are urgently seeking to ramp up defence.
Russia’s all-out invasion of Ukraine has stalled some efforts, but a European Commission spokesperson told Euractiv that “the EU has been working closely with the Ukrainian authorities to implement the partnership”, and that both parties are making progress on implementation.
Andrian Prokip from the Kennan Institute, a Washington DC-based think tank focused on Russia and the former Soviet Union, believes Ukraine’s public stand-off with the US could play out in the EU’s favour.
“Kyiv now is interested in promoting collaboration on this with the EU and having the EU demonstrate its interest in Ukraine’s minerals,” he said, and would also signal to Washington that there was more than one potential partner and buyer.
Rare earths: Crucial for defence
Although the EU is trying to increase domestic production of CRMs, limited deposits of the rare elements and the reality of the geology in much of the EU means the bloc will never be self-sufficient in supplying CRM. EU countries are particularly dependent on China, which now provides 100% of EU imports of heavy rare earths.
The EU’s newly announced commitments to further boost defence investment – and alarm over whether the Trump administration might yank back on the US defence commitment to Europe – exacerbates the problem of securing supplies of CRMs.
Rare earths are essential for a range of defence applications, and are needed to produce everything from cutting-edge laser weapons to engine control components and laser rangefinders in aircraft and military vehicles, as well as satellite communications gear, according to a report by European lobby group Photonics21.
From allies to competitors?
Volodymyr Landa, an economist at the Kyiv-based Centre for Economic Strategy think tank, noted that Ukraine is not among the top 10 countries in the world with the largest deposits of rare earths. But for the EU, any diversification in supply away from its current total dependence on China could be significant.
Could this mean the EU’s interests in securing crucial raw materials for producing weaponry, batteries, and other technology might at some point put the EU in conflict with a Trump-led US that seems determined to maximise US profits and – as Trump is fond of saying – put “America First”?
At least from a legal point of view, Ukrainian analyst Olena Pavlenko from the DiXi Group think tank in Kyiv said the possibility of a EU-US rivalry over Ukraine’s mineral wealth is a low risk.
“As of now, we do not see any risks that could hinder Ukraine-EU partnership or the entry of European companies into the Ukrainian market,” she said.
Even the since-discarded draft deal with the US explicitly stated that the agreement should not hinder Ukraine’s European integration, Pavlenko noted, “and implementing the EU’s Critical Raw Materials Act is part of the European integration process”.
But she nonetheless conceded that multiple investors competing to lay hands on sought-after resources do still run the risk of bumping into each other.
Playing the long game
The EU’s slow-moving, bureaucratic and detail-oriented negotiation style might actually be an advantage over the Trump administration’s frenetic pace and rapidly shifting priorities.
“This is not the type of agreement that can be done in one day or one year,” said Landa. “Companies that started earlier will have a head start.”
In this sense, the EU is already three years ahead of the US.
Even once deals are signed, foreign companies interested in investing in Ukraine would still have to undergo the usual registration process before starting construction work. That means major greenfield projects without any pre-existing infrastructure – like, for example, a rare earth mine – could take years to get built and become operational.
“I don’t think Trump is very long-term oriented in this regard,” Pavlenko, the Kyiv-based analyst, told Euractiv.
Despite the public feud with Zelenskyy, Trump hinted that he might still expect to close a raw minerals deal with Ukraine in a post on his Truth Social platform. At the same time, US Treasury Secretary Scott Bessent confirmed the deal was off the table for now in a TV interview.
The Commission, however, does not appear to be concerned about potentially stepping on Trump’s toes.
When asked whether the EU would seek an additional minerals agreement with Ukraine to counter a possible deal with the US, a Commission spokesperson contended that the EU’s push “is about cooperation with Ukraine, not competition with the US.”
“The EU stands with Ukraine and will continue to do so, as Ukraine is fighting for the security of our entire continent,” the spokesperson added.
EU steadily plugging away at ‘win-win’ cooperation
The current EU-Ukraine deal is aimed at not only providing the European industry with a share of critical materials and rare earths, but also for the EU to help Ukraine develop its extractive industry and other key pieces of the supply chain.
Two EU-backed projects under the deal launched in 2024, one concerning titanium mining and a second one on improving the efficiency of extraction and processing techniques, an EU official told Euractiv. There was also progress on digitising geological reports and other efforts to locate potential deposits.
The same official added that the European Bank for Reconstruction and Development has issued a €6 million grant for development of a low-carbon strategy for Ukraine’s extractive sector and identifying further CRM projects.
“We do already have a number of projects which could be termed European,” some of which could be “up and running as of March”, Stéphane Séjourné, the European Commission’s vice president for prosperity and industrial strategy, said at a press conference on Wednesday, shortly after returning from meeting Ukrainian officials in Kyiv but before Zelenskyy’s ill-fated trip to Washington.
During his visit to Kyiv, Séjourné sought to reaffirm the EU’s commitment and accelerate work with a deal he called “a win-win for the Ukrainians”.
In Ukraine, local experts also highlighted the potential benefits of the EU minerals deal for the embattled country.
“Ukraine is interested in all countries that are interested in Ukraine winning”, said Landa, the Ukrainian economist.
Greater Western investment in Ukraine could also have possible strategic benefits. Landa argued that Russia would “probably reconsider” its ongoing aggression if European industrial plants were built across Ukrainian territory.
Darius Kölsch contributed to this report.
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