Ukraine-U.S. Mineral Deal May Take a Decade to Deliver Economic Returns
A landmark agreement between Ukraine and the United States on mineral resource development has been hailed as a political win but industry experts caution that any significant economic returns could be more than a decade away.
The Gaze reports on this with reference to Reuters.
Despite the enthusiasm surrounding the deal signed in Washington and covering 55 key minerals alongside oil and gas, analysts say the path to commercial production is littered with challenges. The biggest hurdles include a lack of confirmed geological data, inadequate infrastructure, and the continuing instability caused by Russia’s ongoing invasion of Ukraine.
“Developing mines that produce strategically important minerals in countries with established mining sectors such as Canada and Australia can take 10 to 20 years,” said Adam Webb, head of minerals at Benchmark Minerals Intelligence. “Ukraine presents a tougher case.”
Much of Ukraine’s mineral wealth remains underexplored and several promising deposits are located in Russian-occupied territory, making future development uncertain. Among the 24 potential projects identified by Benchmark, seven – including major lithium and rare earth sites – are in areas currently controlled by Russia.
The deal itself outlines a framework for cooperation between the U.S. International Development Finance Corporation and Ukraine’s State Organization for Public-Private Partnerships. It envisions revenues for Ukraine’s reconstruction fund coming from royalties, licensing, and production-sharing agreements. However, the specific financial terms are still being negotiated, and revenues will only stem from new post-deal projects.
Political analysts see the agreement as a strategic move by both nations. For Ukraine, the partnership may help sustain American support, which has wavered amid political shifts in Washington. For the U.S., the deal represents a bid to secure access to critical minerals such as lithium, nickel, and rare earth elements that are essential for technologies ranging from smartphones to electric vehicles.
The U.S. has been aggressively seeking alternatives to Chinese rare earths amid escalating trade tensions, and Ukrainian resources could eventually play a key role. Yet the prospect of investing in a conflict zone is giving many companies pause.
“The dream that critical minerals will soon be flowing out of Ukraine is far from reality,” Webb noted. “Investors will be reluctant unless there are clearer security guarantees and infrastructure improvements.”
Despite these challenges, some see the deal as a step toward deeper U.S. involvement in Ukraine’s future. “The deal ties the U.S. more closely into Ukraine in that now they've got a bit more of a vested interest in this war coming to an end so that they can develop those assets,” stated Webb.
As The Gaze reported earlier, US President Donald Trump has said that as a result of signing a subsoil deal with Ukraine, the United States could get more than the $350 billion it has spent on Ukraine.