USA and Ukraine: Raw materials contract under pressure – Zelensky warns!

USA and Ukraine: Raw materials contract under pressure – Zelensky warns!

Ukrainian President Volodymyr Zelensky has reiterated his concerns about the ever-changing terms of a planned raw materials deal with the United States. In recent statements, Zelensky emphasized that he did not want to give the impression that Ukraine was against the agreement and that he hoped for a quick agreement. Negotiations on the contract have been ongoing for several weeks and concern in particular the exploitation of mineral resources in Ukraine, including rare earths, which are central to various high-tech and military applications. oe24 reports that the Ukrainian president criticized the USA in this context.

The USA and Ukraine have agreed on a raw materials agreement, but the exact details of the agreement remain unclear. Zelensky confirmed that a final version of the agreement is being prepared, which must be ratified by the Ukrainian parliament. The signing could take place as early as Friday in Washington between Zelensky and US President Donald Trump. Zelensky originally rejected a first draft of the agreement because he expressed concerns that Ukraine would have to give up large parts of its valuable raw materials. The original plan called for Ukraine to supply $500 billion worth of raw materials to offset aid for the war. Tagesschau informs that The USA now wants to give in and set up a jointly managed reconstruction fund for Ukraine.

Contents of the agreement

As part of the new agreement, future proceeds from the extraction of raw materials and infrastructure will flow into this fund. Ukraine is asked to contribute 50 percent of the proceeds from these areas. In addition to rare earths, the affected raw materials also include oil and gas, which are to be mined together. Another contentious issue is security guarantees for Ukraine, which are not included in the current draft of the agreement, although Zelensky had expressly requested them.

Trump highlighted the deal's economic benefits and noted that Ukraine has numerous critical raw materials, including lithium and graphite. However, Ukraine is currently unable to operate commercial rare earth mines. It is estimated that around 40 percent of Ukraine's metal resources are already under Russian control. This situation has led to Ukraine being dependent on American arms assistance in the context of the Ukraine War. Deutschlandfunk reports that The planned agreement also includes US access to Ukrainian oil and gas and the income from raw material production is to flow into a bilateral investment fund.

This presents a new challenge for the EU: before the war, it had already concluded a strategic partnership with Ukraine to secure access to rare earths in order to reduce its dependence on China. However, it now finds itself under pressure from the US and is planning a special EU summit to respond to changes in US policy towards Ukraine.