What are Ukraine’s rare earth minerals, where are they and what does this deal with Trump involve?

Ukraine signed a mineral and profit-sharing deal with the United States on Wednesday evening in Washington DC following two months of testy negotiations.

The agreement will give the US preferential access to new Ukrainian minerals deals and fund investment in Ukraine’s reconstruction.

Previous versions of the deal presented by Donald Trump’s negotiators insisted that Ukraine pay back the aid the US had given it over the last three years of war. The latest version, according to Ukraine’s prime minister Denys Shmyhal, no longer makes that demand.

Earlier, US president Donald Trump had claimed a rare earth minerals deal with Ukraine – a crucial first step to achieving peace in the region – was back on after Volodymyr Zelensky sent him a letter signalling his willingness to sign.

After a series of spats between Mr Trump and Mr Zelensky culminated in the deal being temporarily canned earlier and the Ukrainian leader being kicked out of the White House, the US president said in a speech to Congress that he had “received an important letter” seeking to end the disagreements.

Quoting from the letter, he said Mr Zelensky told him that “Ukraine is ready to come to the negotiating table as soon as possible to bring lasting peace closer. Nobody wants peace more than the Ukrainians”.

“My team and I stand ready to work under President Trump's strong leadership to get a peace that lasts,” Mr Trump quoted Mr Zelensky as writing. “We do really value how much America has done to help Ukraine maintain its sovereignty and independence.”

Mr Trump added that Mr Zelensky said he was ready to sign the minerals deal “at any. time that is convenient for you”.

On Wednesday, the US Treasury Department said: “In recognition of the significant financial and material support that the people of the United States have provided to the defense of Ukraine since

Earlier, Ukraine had agreed to a revised deal with the US to secure support to end the war after the Trump administration dropped some of its toughest demands.

But a tense exchange between the two countries’ leaders earlier brought the negotiations crashing down again, with the Ukrainian president berated in front of cameras by Mr Trump and his second-in-command, JD Vance.

The deal, which was touted as a central point of peace negotiations, was left unsigned and what can be salvaged from it remains uncertain.

The US had been pushing for a deal that would grant it half of Ukraine’s revenues from critical minerals, oil, gas, and stakes in key infrastructure, such as ports, through a joint investment fund.

A White House official said earlier that the minerals deal was a “first step to lasting peace” but Zelensky had “overplayed his cards”.

Below, The Independent looks at what could be included in the deal now that it has been struck.

What do we know about the deal so far?

While negotiations were up in the air, it had been reported the preliminary agreement established a fund in which Ukraine would contribute 50 per cent of proceeds from the “future monetisation” of state-owned mineral resources such as oil and gas, which would be invested in Ukrainian projects.

Treasury secretary Scott Bessent announced the news of the deal in a press release later on Wednesday, which described the agreement as a recognition of the “significant financial and material support that the people of the United States have provided to the defence of Ukraine”.

“As the president has said, the United States is committed to helping facilitate the end of this cruel and senseless war,” said Mr Bessent. “This agreement signals clearly to Russia that the Trump administration is committed to a peace process centred on a free, sovereign, and prosperous Ukraine over the long term.”

The deal does not mention Ukrainian liability for past aid spent, which Mr Morezkho said on Wednesday was a “victory”. President Trump had previously demanded $300bn in back payments on the US contribution to the defence of Ukraine, which has in fact been about $130bn since 2022.

“Both countries will be equal parties in the sharing of investment and an equal share in the resources of Ukraine. The profits, for the first 10 years, for both countries, will be spent on rebuilding Ukraine infrastructure and local investment,” Mr Morezkho told The Independent.

Earlier, the US reportedly dropped Mr Trump’s initial demand for $500bn in potential revenue from Ukrainian resources, a condition which was rejected out of hand by Ukrainian president Volodymyr Zelensky.

“I am not signing something that 10 generations of Ukrainians will have to repay,” Mr Zelensky had said.

Despite this, negotiations intensified in the days that followed, and it was soon announced that a preliminary agreement had been reached and that Mr Zelensky would travel to Washington to sign the deal.

Mr Trump had suggested earlier that the deal was close to completion, hinting at Mr Zelensky’s upcoming visit.

The US president announced earlier that the war-torn country was on board with his plan. “We're telling Ukraine they have very valuable rare earths,” Mr Trump said.

What are Ukraine’s rare earths?

Ukraine is sitting on one of Europe’s largest deposits of critical minerals, including lithium and titanium, much of which is untapped. According to the Institute of Geology, Ukraine possesses rare earth elements such as lanthanum and cerium, used in TVs and lighting; neodymium, used in wind turbines and EV batteries; and erbium and yttrium, whose applications range from nuclear power to lasers. The EU-funded research also indicates that Ukraine has scandium reserves but detailed data is classified.

Mr Zelensky has been trying to develop these resources, estimated to be worth more than £12 trillion, based on figures provided by Forbes Ukraine, for years.

In 2021, he offered outside investors tax breaks and investment rights to help mine these minerals. These efforts were suspended when the full-scale invasion started a year later.

Anticipating the notoriously transactional Mr Trump might take an interest in this, Mr Zelensky then placed the mining of these minerals into his victory plan, which was drawn up last year.

The minerals are vital for electric vehicles and other clean energy efforts, as well as defence production.

Estimates based on government documents suggest that Ukraine’s resources are also highly varied. Foreign Policy found that Ukraine held “commercially relevant deposits of 117 of the 120 most-used industrial minerals across more than 8,700 surveyed deposits”.

Included in that is half a million tonnes of lithium, none of which has been tapped. This makes Ukraine the largest lithium resource in Europe.

Ukraine's reserves of graphite, a key component in electric vehicle batteries and nuclear reactors, represent 20 per cent of global resources. The deposits are in the centre and west.

It is not surprising that Mr Trump appears keen on benefiting from this, especially as China remains a key player in the mining of minerals such as titanium.

But Vladimir Putin’s invasion has not only delayed Ukraine’s plans to mine these minerals, it has also led to much of these resource-rich areas being destroyed and then occupied.

A little over £6 trillion of Ukraine’s mineral resources, which is around 53 per cent of the country’s total, are contained in the four regions Mr Putin illegally annexed in September 2022, and of which his army occupies a considerable swathe.

That includes Luhansk, Donetsk, Zaporizhzhia and Kherson, though Kherson holds little value in terms of minerals.

The Crimean peninsula, illegally annexed and occupied by Mr Putin’s forces in 2014, also holds roughly £165bn worth of minerals.

The region of Dnipropetrovsk, which borders the largely occupied regions of Donetsk and Zaporizhzhia, and sits in the face of an advancing Russian army, contains an additional £2.8 trillion in mineral resources.

Russian difficulties with major military operations seem likely to preclude a serious attempt to take the region but mining operations in the area would be perilous with Moscow’s soldiers so close.

Other ores are well within the sites of Russia’s forces. One lithium ore on the outskirts of a settlement called Shevchenko in Donetsk is less than 10 miles from the town of Velyka Novosilka, recently captured by Mr Putin’s troops.

However, while Ukraine has a highly qualified and relatively inexpensive labour force and developed infrastructure, investors highlight a number of barriers to investment. These include inefficient and complex regulatory processes as well as difficulty accessing geological data and obtaining land plots. Such projects would take years to develop and require considerable up-front investment, they said.

What happens next?

After signing the deal, Mr Bessent said in a statement: “To be clear, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.”

The New York Times reported that the final US-Ukraine minerals deal does not include any guarantees of future US security assistance, which the US rejected early in talks. Despite the celebratory tone, the agreement, the outlet reported, may prove largely symbolic if the war with Russia continues.

The Treasury Department said that the US International Development Finance Corporation will collaborate with Ukraine to finalise the agreement’s details.

Ukraine’s prime minister said in a post on Telegram that both countries will have equal voting rights in the fund, Ukraine will keep full control over its resources and infrastructure, and all profits will be reinvested in Ukraine.

“Thanks to this agreement, we will be able to attract significant resources for reconstruction, start economic growth, and receive the latest technologies from partners and a strategic investor in the United States,” Mr Shmyhal said in the post.