Released May 02, 2025 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--After months of sometimes rancorous wrangling the U.S. and Ukraine on April 30 signed a revised version of a minerals-for-military aid agreement, according to sources on both sides. The deal was signed by U.S. Treasury Secretary Scott Bessent and Ukrainian First Deputy Prime Minister Yulia Svyrydenko.
Senior Trump administration officials said there are three actual agreements. They include a framework and two technical forms. Ukraine's parliament must agree to them, which is expected within a week, although some lawmakers think it could take longer. Its purpose is to provide the U.S. priority in accessing and developing Ukraine's deposits of critical minerals in return for supplying military aid for Ukraine in its resistance against the Russia invasion, which began in February of 2022. Meanwhile, peace negotiations remain stymied, but Bessent believes this agreement will give the U.S. an important negotiating boost. "I think this is a strong signal to the Russian leadership, and it gives President Trump the ability to now negotiate with Russia on even a stronger basis."
Unlike previous versions of the agreement that were less palatable to Kyiv, this one allows Ukraine to maintain "full control over subsoil, infrastructure, and natural resources," Prime Minister Denys Shmyhal said just before the signing. He also said, "The agreement does not provide for any debt obligations," referring to an elimination of U.S. President Donald Trump's previous demands that Ukraine pay back $350 billion he said the U.S. had invested in the nation's defense so far.
The agreement's purpose is twofold: One, to help recoup some costs for U.S. military assistance for Ukraine, and two, to help reduce the U.S.'s dependence on China for critical minerals.
But specifics are slim. With no specifics, the deal only declares a "long term strategic alliance" and offers "support for Ukraine's security, prosperity, reconstruction, and integration into global economic frameworks."
What minerals would be available for development? Ukraine's Institute of Geology lists lanthanum, cerium, neodymium, erbium and yttrium. It may have scandium, according to some EU-funded research, and in a July 2024 report, the World Economic Forum listed possibilities for lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.
The version signed on April 30 also includes oil and gas, a new concession from Kyiv, which had excluded them from previous proposals. The International Energy Agency (IEA) assesses Ukraine's natural gas reserves at about 5.4 trillion cubic meters (TCM), with proven reserves of 1.1 TCM, along with 850 million tonnes of oil reserves. When Russia took over Crimea, Ukraine lost its significant amounts off offshore natural gas, and the IEA has not yet revised the estimates downward to reflect that loss. When would the U.S. start getting payback from the minerals? It could be as long as 20 years, and even that would suppose that miners would feel safe investing in the enterprise, according to the Center for Strategic and International Studies (CSIS). Unlike command economies like China and Russia, the U.S. cannot force miners to invest time and money into any project, although this agreement can help remove some barriers.
Plus, the invasion has crippled the nation's power infrastructure. CSIS points out that in the first two years of the war, the Russian army either occupied, destroyed, or damaged about half of Ukraine's power generation capacity, and damaged a similar amount of its network substations. "As a result, Ukraine has been left with only about one-third of its prewar power capacity," it said.
A permanent end to hostilities would have to happen before restoration could begin. Infrastructure is critical because mining requires large doses of power, accounting for 15% of total global electricity use. No serious mining could begin without a strong and secure power grid.
Along with questions about safety in a war zone, investors would be seeking more research in the minerals themselves before making large and long-term economic commitments.
"Ukraine still needs to undertake a comprehensive geological mapping," said CSIS. "From the time reserves have been identified, globally, it takes an average of 18 years to develop a mine and costs $500 million and $1 billion to build a mine and separation plant.
And there is the rub. Whether Ukraine actually has economically feasible mineral amounts is not a given, according to a March 2025 report by the IEEE (Institute of Electrical and Electronics Engineers). It contends that the country's east, containing the four areas with significant minerals (Yastrubetske, Novopoltavske, Azovske, and Mazurivske), is mostly in or near zones currently controlled by Russian forces.
Regarding the security issue, in a LinkedIn post Dr. Gabriel Collins, the Baker Botts Fellow in Energy and Environmental Regulatory Affairs at Rice University's Baker Institute, said, "It's pretty wild to see the US government as a direct party to an LP Agreement. Given that the Russian Army will be within artillery range of some of the assets this Agreement might touch upon and that Russian drones and missiles can range basically all of Ukraine, the U.S. International Development Finance Corporation is likely going to have to sell a lot of political risk #insurance to get investors on board."
The story quotes Erik Jonsson, senior geologist with the Geological Survey of Sweden, as saying there are reports of minerals in those areas, but, "We have no real, detailed outline of how those numbers were arrived at." The current claims may have originated with Soviet-era surveys from the 1960s.
With this agreement being part of U.S. President Donald Trump's stated goal of reducing dependence on China for critical minerals, its long list of uncertainties, and at best decades of required development, would seem to indicate that other measures will be necessary to move the import needle away from China.
On the other hand, officials from both nations are hopeful that this new sign of cooperation between the two will push Russia toward a peace treaty.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
Senior Trump administration officials said there are three actual agreements. They include a framework and two technical forms. Ukraine's parliament must agree to them, which is expected within a week, although some lawmakers think it could take longer. Its purpose is to provide the U.S. priority in accessing and developing Ukraine's deposits of critical minerals in return for supplying military aid for Ukraine in its resistance against the Russia invasion, which began in February of 2022. Meanwhile, peace negotiations remain stymied, but Bessent believes this agreement will give the U.S. an important negotiating boost. "I think this is a strong signal to the Russian leadership, and it gives President Trump the ability to now negotiate with Russia on even a stronger basis."
Unlike previous versions of the agreement that were less palatable to Kyiv, this one allows Ukraine to maintain "full control over subsoil, infrastructure, and natural resources," Prime Minister Denys Shmyhal said just before the signing. He also said, "The agreement does not provide for any debt obligations," referring to an elimination of U.S. President Donald Trump's previous demands that Ukraine pay back $350 billion he said the U.S. had invested in the nation's defense so far.
The agreement's purpose is twofold: One, to help recoup some costs for U.S. military assistance for Ukraine, and two, to help reduce the U.S.'s dependence on China for critical minerals.
But specifics are slim. With no specifics, the deal only declares a "long term strategic alliance" and offers "support for Ukraine's security, prosperity, reconstruction, and integration into global economic frameworks."
What minerals would be available for development? Ukraine's Institute of Geology lists lanthanum, cerium, neodymium, erbium and yttrium. It may have scandium, according to some EU-funded research, and in a July 2024 report, the World Economic Forum listed possibilities for lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.
The version signed on April 30 also includes oil and gas, a new concession from Kyiv, which had excluded them from previous proposals. The International Energy Agency (IEA) assesses Ukraine's natural gas reserves at about 5.4 trillion cubic meters (TCM), with proven reserves of 1.1 TCM, along with 850 million tonnes of oil reserves. When Russia took over Crimea, Ukraine lost its significant amounts off offshore natural gas, and the IEA has not yet revised the estimates downward to reflect that loss. When would the U.S. start getting payback from the minerals? It could be as long as 20 years, and even that would suppose that miners would feel safe investing in the enterprise, according to the Center for Strategic and International Studies (CSIS). Unlike command economies like China and Russia, the U.S. cannot force miners to invest time and money into any project, although this agreement can help remove some barriers.
Plus, the invasion has crippled the nation's power infrastructure. CSIS points out that in the first two years of the war, the Russian army either occupied, destroyed, or damaged about half of Ukraine's power generation capacity, and damaged a similar amount of its network substations. "As a result, Ukraine has been left with only about one-third of its prewar power capacity," it said.
A permanent end to hostilities would have to happen before restoration could begin. Infrastructure is critical because mining requires large doses of power, accounting for 15% of total global electricity use. No serious mining could begin without a strong and secure power grid.
Along with questions about safety in a war zone, investors would be seeking more research in the minerals themselves before making large and long-term economic commitments.
"Ukraine still needs to undertake a comprehensive geological mapping," said CSIS. "From the time reserves have been identified, globally, it takes an average of 18 years to develop a mine and costs $500 million and $1 billion to build a mine and separation plant.
And there is the rub. Whether Ukraine actually has economically feasible mineral amounts is not a given, according to a March 2025 report by the IEEE (Institute of Electrical and Electronics Engineers). It contends that the country's east, containing the four areas with significant minerals (Yastrubetske, Novopoltavske, Azovske, and Mazurivske), is mostly in or near zones currently controlled by Russian forces.
Regarding the security issue, in a LinkedIn post Dr. Gabriel Collins, the Baker Botts Fellow in Energy and Environmental Regulatory Affairs at Rice University's Baker Institute, said, "It's pretty wild to see the US government as a direct party to an LP Agreement. Given that the Russian Army will be within artillery range of some of the assets this Agreement might touch upon and that Russian drones and missiles can range basically all of Ukraine, the U.S. International Development Finance Corporation is likely going to have to sell a lot of political risk #insurance to get investors on board."
The story quotes Erik Jonsson, senior geologist with the Geological Survey of Sweden, as saying there are reports of minerals in those areas, but, "We have no real, detailed outline of how those numbers were arrived at." The current claims may have originated with Soviet-era surveys from the 1960s.
With this agreement being part of U.S. President Donald Trump's stated goal of reducing dependence on China for critical minerals, its long list of uncertainties, and at best decades of required development, would seem to indicate that other measures will be necessary to move the import needle away from China.
On the other hand, officials from both nations are hopeful that this new sign of cooperation between the two will push Russia toward a peace treaty.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
