President Donald Trump is set to meet Ukrainian counterpart Volodymyr Zelensky in Washington, D.C., on Friday to sign a new deal on critical minerals, an effort to reduce U.S. reliance on China for key resources.
The agreement will see Ukraine and the U.S. jointly develop Ukraine’s vast reserves of strategic materials, with 50 percent of the revenue from critical minerals, oil, natural gas, and other resources flowing into a U.S. fund.
While Trump has framed the deal as repayment for the military and humanitarian aid provided to Ukraine since 2022, Zelensky has pushed back on that idea, saying that Kyiv will not accept even “10 cents of debt repayment.”
The U.S. Eyes Ukraine’s Resource Wealth
The U.S. heavily depends on imports for materials essential to defense, energy, and high-tech industries, making a steady supply from a friendly partner such as Ukraine an attractive alternative to China. Washington has long viewed China’s dominance in global minerals markets as a national security threat and has in recent years worked toward diversifying its supply chains.
China accounts for over 60 percent of global rare earth mining and nearly 90 percent of rare earth processing, giving it a chokehold on supply chains. The U.S. is particularly interested in securing alternative supplies of lithium, graphite, and uranium, materials critical for EV batteries, military defense platforms, and nuclear energy.
Between 2017 and 2020, the U.S. sourced a third of its graphite from China.
Ukraine is believed to hold an estimated 45,600 tons of uranium reserves and about 1 billion tons of graphite, representing 20 percent of the world’s known graphite reserves. But industry experts warn that tapping into these resources won’t be easy—and, in some cases, it may not be viable at all.
Experts Warn of Major Obstacles
Despite Ukraine’s untapped resource potential, mining experts and policymakers have raised doubts about whether the Ukrainians can actually deliver on U.S. expectations.
For one, reliable geological data is lacking. The most-recent comprehensive assessments of Ukraine’s rare earth elements were conducted decades ago by the Soviet Union, using outdated survey methods. This poses a serious risk for investors, as deposits may not be as commercially viable as hoped.
“This poses a risk for mining companies that may end up disappointed after investing millions of dollars in less-than-inspiring deposits,” the Center for Strategic and International Studies (CSIS) noted in an article Thursday.
Then there is the issue of infrastructure. The three-year war has devastated Ukraine’s power grid, leaving only a third of its prewar energy production capacity intact. Mining and refining minerals is highly energy-intensive, meaning that any expansion of production will require massive investments in rebuilding power infrastructure.
Security is another major concern. Much of Ukraine’s resource-rich regions are either under Russian occupation or within range of Russian missile attacks, making it difficult to attract private investment needed to develop these industries.
CSIS summed up these concerns bluntly: “Even in the long-term, the success of the bilateral agreement ultimately hinges on the ability of Ukraine to attract private investment in its mineral resources. The U.S. government cannot command private companies to mine in Ukraine as China and Russia can with their state-owned enterprises.”
China’s Hold on the Market and U.S. Efforts to Break Free
The U.S. has spent years working to secure critical mineral partnerships with allies to reduce China’s dominance over global supply chains. Australia, Canada, and several African nations have been key players in this strategy.
China isn’t standing idly by. Chinese firms have aggressively expanded their presence in Africa, investing heavily in mineral production across the continent. Beijing now controls an estimated 80 percent of critical mineral production in the Democratic Republic of the Congo (DRC), according to the U.S. International Development Finance Corporation.
China has also cornered the graphite market, producing over 70 percent of the world’s supply—a material crucial for batteries in helicopters, missiles, and other defense platforms.
While Ukraine’s mineral wealth looks promising on paper, experts warn that it is unlikely to shift global supply chains anytime soon.
What Happens Next?
The Trump administration’s deal with Kyiv is expected to move forward, but questions remain over how soon Ukraine can scale up production—if at all.
CSIS said: “While government-to-government agreements can be a helpful market signal to the private sector and spur investments that may otherwise not occur, challenges with the lack of reliable reserve data to confirm economic viability, the loss of key infrastructure [during the war], and the ongoing security risks in the region jeopardize the viability of long-term minerals investments.”
Despite Trump’s push for Ukraine to help repay U.S. aid through critical minerals, the reality is that, even under ideal conditions, it could take years—if not decades—for Ukraine to challenge China’s dominance in the market.
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