The recently announced U.S.-Ukraine minerals agreement, branded by U.S. President Donald Trump as the “Critical Minerals and Rare-Earths Deal,” is centered on establishing a joint investment fund aimed at Ukraine’s reconstruction.
Under the deal, the U.S. will support the development of Ukraine’s untapped energy and mineral resources, with half of the resulting revenues directed to the fund. However, the agreement reportedly excludes existing revenues and does not involve any explicit security guarantees.
Crucially, Trump’s earlier demand for Ukraine to hand over control of its natural resources was dropped. The investment fund will be jointly managed by both governments and will not be used to repay previous military aid.
While the structure provides Washington with preferential access to Ukraine’s minerals, the actual scale and value of these reserves are in question.
“In short, estimates of Ukraine’s mineral wealth seem to be overblown,” Capital Economics said in a report.
Ukraine’s Geological Survey claims the country holds about 5% of global mineral reserves, including critical materials like lithium, titanium, and rare earths. But skepticism remains high over the accuracy of these figures, which are reportedly based on outdated Soviet-era data.
“For what it’s worth, the widely used U.S. Geological Survey and the Energy Institute do not list Ukraine as having notable reserves of rare earths,” Capital Economics notes.
While Ukraine currently produces gallium, graphite, and titanium, annual export revenues from these critical minerals remain under $200 million. The economics of expanding production are challenging.
One example is the Novopoltavske field, where rare earths and phosphates have remained untapped for over five decades due to high extraction costs.
“Greater access to U.S. technology and funding could make it more worthwhile to exploit a handful of deposits. Crucially, though, if the economics of mine development remain unfavourable, most estimated reserves will probably remain in the ground,” the report states.
Complicating matters further, about 40% of Ukraine’s known mineral and metal reserves lie in territories currently under Russian control. These resources are included in the deal, but access depends on broader peace negotiations. President Putin has indicated a willingness to offer access to such deposits, including those in Russia, presumably as part of a separate deal.
Strategically, the agreement strengthens U.S. economic interests in Ukraine at a time when global supply chains are being reshaped by geopolitical competition. The deal is part of Washington’s broader push to reduce reliance on China for critical materials.
According to Capital Economics, “securing access to raw materials will be a key priority for the U.S. and its allies as the global economy continues to fracture.”
While the deal reinforces U.S. engagement in Ukraine, the firm cautions that it does little to shift Russia’s negotiating stance or bring the war closer to a conclusion.