Glembert
KN. U.S. and Ukrainian were signed their bilateral agreement related to Ukraine’s natural resource supplies, particularly Kyiv’s critical minerals reserves. Should the critical minerals deal be signed, as the framework currently stands, it would establish a jointly owned fund in which Ukraine would contribute “half of its revenues from the future monetization of natural resources and associated infrastructure,”. This includes revenues from oil, natural gas, and most notably, mineral deposits. However, this does not include the existing operations contributing to Ukraine’s revenue such as Naftogaz and Ukrnafta, Ukraine’s largest oil and gas producers meaning that the revenue collected under the agreement would have to be made up from entirely new ventures with some of the revenue then being reinvested into Ukraine.
However, the expectation that the minerals deal would help secure ongoing U.S. military aid to Ukraine was upended when the U.S. announced it would temporarily suspend its delivery of military aid to Ukraine pending further review. Without continued U.S. support to Ukraine’s military, it is likely that Moscow would be able to break the current stalemate, allowing Russia to occupy even more territory, killing more Ukrainian civilians in the process.
Trump administration viewed the minerals deal as a mutually beneficial agreement that also served as a de facto security guarantee for Ukraine, President Zelensky had previously insisted that an explicit security assurance from the U.S. was necessary, arguing that economic agreements alone were not enough to ensure the country’s long-term security.
Trump’s fixation with stockpiling critical minerals is not unique to Ukraine. He has expressed his interest in extracting minerals from Greenland, Canada, and even Russia; however, should the deal be signed, Trump is hedging a big bet that the supply of Ukraine’s reserves will yield a strategic return in the short or medium term. Additionally, it is unclear what minerals and how much of them Ukraine even has on its territory. The last geological survey was done 30-60 years ago by the Soviet Union using outdated testing methods. Without this information, it is unlikely to attract the necessary investment. Furthermore, much of Ukraine’s infrastructure has been decimated as a result of the Russian invasion, especially as Moscow has targeted much of Ukraine’s critical infrastructure, slicing Ukraine’s power generation capacity to about a third of its prewar capacity. Without sufficient energy, these projects will be unable to operate.
As critical minerals have played an increasingly important role in U.S. foreign policy, and will be even more important in the future, it is not the mining of the resources that threaten the supply chain, but rather the processing and refining. The Trump administration has emphasized these critical minerals as essential to national security as they are used in a variety of military equipment as well as in commercial items such as cell phones.
However, raw minerals are useless until they have been processed. Therefore, the U.S. could acquire as many of these minerals as it wants, whether from Ukraine, Greenland, or Canada, but the minerals need to be refined, a method currently monopolized by China.
Trump’s fascination with stockpiling critical minerals is not unique to Ukraine; he has expressed his interest in extracting minerals from Greenland, Canada, and even Russia. As critical minerals have played an increasingly important role in U.S. foreign policy, it is not the mining of the resources that threaten the supply chain, but rather the processing and refining.
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