Trump and the big business with Ukraine and its minerals

Trump and the big business with Ukraine and its minerals

The United States and the Ukraine work on a Agreement Washington should enable access to Kiev unused mineral wealth. In return, Ukraine hopes for investments and concrete security guarantees.

Details of the agreement

In a press conference on Wednesday, the Ukrainian President Wolodymyr Selenskyj said that the contract could be a "great success", but depends heavily on the negotiations with US President Donald trump. A draft of the agreement that is available contains only a few details. While Trump said on Tuesday that the two sides have essentially negotiated "our agreement on rare earths and other topics", Selenskyj was more careful. He described the deal as just "framework" and emphasized that some central questions were still open.

The content of the deal

The design provides for the establishment of a “reconstruction investment fund”, which is to be managed together by the governments of the USA and Ukraine. The Ukrainian Prime Minister Denys Schmyhal announced that Kiev would pump half of the future natural resource projects in the funds, whereby the money is to be reinvested for further developments. Schmyhal emphasized that the deal will exclude existing “occurrence, facilities, licenses and license fees” in connection with the Ukrainian natural resources. "It's all about future licenses, developments and infrastructures," he said.

What does Trump want from the agreement?

Trump said that he “tried to get the money back”, and thus meant the support for Ukraine, which was achieved under the previous government. The United States initially called for a 500 billion US dollar in the rare earths and other minerals in Ukraine, in return for Kiev's support that has already been achieved. However, Selenskyj rejected this because he feared that this could harm his nation. Trump then called Selenskyj a "dictator".

When asked what Ukraine would receive as part of the mineral agreement, Trump said: "$ 350 billion and a lot of equipment, military equipment, and the right to continue fighting." According to the Kiel Institute for the global economy, Washington had promised a total of around $ 124 billion in support for Ukraine. Trump indicated that security guarantees were not part of the agreement and added: "We have largely negotiated our agreement on rare earths and various other things." A current draft of the agreement contains no concrete numbers or details on the share of the USA in the fund.

Selenskyj emphasized that his country would not accept a repayment of previously received money from Washington as part of the deal. "I will not even accept 10 cents of debt repayment in this deal. Otherwise it would be a precedent," he said during a press conference in Kiev.

What does Ukraine want from the deal?

The mineral wealth of Ukraine have long been observed by the allies, and Kiev has incorporated them into his requests for support. Selenskyj has made it clear that he wants security guarantees as part of the deal. Some deposits are already in areas that are occupied by Russia, and Selenskyj argued that one of the main goals of the West should be to support Ukraine in its fight against Moscow in order to prevent further strategically important resources to fall into the hands of the Kremlin

“The occurrence of critical resources in Ukraine, together with the globally important energy sector and the potential of food production, are among the main goals of the Russian federation in war. And that is our chance of growth," said Selenskyj in October when he was presented by his "Siegplan". Nataliya Katser-Buchkovska, co-founder of the Ukrainian Sustainable Investment Fund, said that a deal could not work without security guarantees. "In order for the United States access to these occurrences, Ukraine has to regain control of these areas, dismantle the area and rebuild the infrastructure," she emphasized.

Why is Trump interested in a mineral agreement with Ukraine?

Materials such as graphite, lithium, uranium and the 17 chemical elements that are known as rare earths are crucial for economic growth and national security. They are necessary for the production of electronics, technologies for clean energies, including wind turbines, energy networks and electric vehicles as well as for some weapon systems. The United States is heavily dependent on imports to maintain the minerals required, many of them come from China, which has dominated the market for a long time.

china is responsible for almost 90 % of global processing of rare earths. In addition, China is the largest producer of graphite and titanium as well as an important lithium processor. Experts have long been warning that the dependence on China is risky for strategic materials. In view of the current trade conflicts between Washington and Beijing, it is becoming increasingly important for the United States to find alternative suppliers. In 2021, the EU signed a memorandum with Ukraine that fixes future investment opportunities in mining. A similar document was prepared under the bid administration last year.

How big are the resources of Ukraine?

Trump has repeatedly spoken of the deal in relation to "rare earths", but it is likely that he generally spoke of critical minerals. Ukraine does not have globally significant reserves, but has some of the largest occurrence of graphite, lithium, titanium, beryllium and uranium, which are classified by the USA as critical minerals. Although Ukraine has large reserves of these minerals, little was done to develop the sector. Due to the enormous burden of the Ukrainian economy due to the unprovocative aggression of Russia, it is unlikely that Kiev can open up these resources without foreign investments.

“Most projects are still in the exploration phase, and there are no large -scale processing systems," said Katser -Buchkovska, who was a member of the Ukrainian parliament from 2014 to 2019 and headed the parliamentary committee for energy security and transformation. "Extracting less often will be extremely expensive and requires years (and) billions of preliminary investments, infrastructure developments and training of workers before production can even begin," she added, emphasizing that the sector of raw material extraction in Ukraine was underdeveloped due to outdated infrastructure, war -related damage and missing investments.

What does Russia say on this topic?

Trump's return to the White House led to a political change of course towards Russia. American and Russian officials met in Saudi Arabia at the beginning of the month to discuss the end of the war in Ukraine without inviting Kiev or one of his European allies. On Monday, Trump said that he was involved in "serious conversations" with Russia about the end of the war and attempts to conclude "economic development agreements" with Moscow and to take into account his "massive resources less frequently". The Russian President Wladimir Putin said on Monday that Moskau said be to work with American companies in order to reduce the occurrence of rare earths in both Russia and parts of Ukraine occupied by Russia.

"Russia is one of the leading countries in relation to the occurrence of rare metals. Incidentally, we are also ready to win foreign partners for new territories - there are also certain reserves there," said Putin in an interview with the state media.