Highlights
- Ukraine and the United States signed a Memorandum of Intent on April 17, 2025.
- The purpose is to develop Ukraine’s mineral resources and establish an Investment Fund.
- The agreement aims to strengthen economic ties.
- The focus is on addressing challenges in critical minerals extraction, processing, and supply chain independence.
- The memorandum’s success depends on:
- Balancing economic interests
- Considering geopolitical realities
- Ensuring long-term regional stability
On April 17, 2025, Ukraine and the United States signed a Memorandum of Intent, marking a preliminary step toward a comprehensive agreement on the development of Ukraine’s mineral resources. This memorandum aims to pave the way for an Economic Partnership Agreement and the establishment of an Investment Fund dedicated to Ukraine’s reconstruction efforts.
Covered in Reuters (opens in a new tab) and others, the agreement follows a series of complex negotiations and diplomatic challenges, including a previously delayed signing due to tensions between President Donald Trump and Ukrainian President Volodymyr Zelenskyy. The memorandum is seen as a strategic move to strengthen economic ties between the two nations, particularly in the critical minerals sector, which is vital for various industries, including defense and technology.
While the memorandum signifies progress, it also highlights underlying challenges. Ukraine has expressed concerns over the lack of explicit security guarantees in the agreement, especially given the ongoing conflict with Russia and the occupation of territories rich in mineral resources. Additionally, the deal’s focus on upstream resource extraction raises questions about the development of midstream and downstream capabilities, such as processing and manufacturing, which are essential for maximizing economic benefits and reducing dependency on external entities. Remember, true rare earth resilience means an integrated system.
Another challenge will be the cost, the economics of pulling whatever is in Ukraine out of the ground.
The memorandum’s success will depend on addressing these concerns and ensuring that the partnership leads to equitable and sustainable development for Ukraine. As negotiations continue, both nations must work collaboratively to finalize an agreement that balances economic interests with geopolitical realities and the long-term stability of the region.
Ukraine Economic Minister
According to Ukraine Economic Minister Yulia Svyrydenko via Facebook (opens in a new tab):
Today, we made a step towards a joint Economic Partnership Agreement with the United States. Ukraine and the United States of America signed a Memorandum, which attests to the constructive collaboration of our teams and the intention to finalize and conclude an agreement that will benefit both our peoples.
Preparing the creation of the Investment Fund for the reconstruction of Ukraine. The relevant agreement will open opportunities for significant investments, infrastructure modernization, and a mutually beneficial partnership between Ukraine and the United States – that is why the teams are working on the document.
It is important that we reaffirm by our agreements the desire of the American people to invest together with the Ukrainian people in a free, sovereign, and secure Ukraine.
Ahead is the finalization of the text of the Agreement and its signing. And next – ratification by parliaments.”
Gaps in Data, Infrastructure, and Security Raise Red Flags
The new U.S.-Ukraine minerals deal, lauded by the Trump administration as a foreign policy breakthrough, establishes a reconstruction investment fund jointly owned by both countries, funded through monetization of Ukraine’s untapped natural resource assets—excluding existing revenue sources like Naftogaz reports (opens in a new tab) Grace Baskaran and Meredith Schwartz reporting for Center for Strategic & International Studies (CSIS).
Ms. Baskaran, a known expert in this field, wrote for CSIS that this agreement reflects Trump’s transactional diplomacy, prioritizing access to critical minerals over security guarantees.
The CSIS analysis thoroughly dissects the strategic and geopolitical implications of the U.S.-Ukraine minerals agreement, but it notably omits a critical element: the lack of midstream and downstream capacity. While the authors acknowledge long-term challenges—such as poor geological mapping, decimated infrastructure, and security instability—they do not directly address the fact that Ukraine lacks any commercial-scale processing, refining, or manufacturing capabilities for critical minerals. Is this a significant oversight, given that raw mineral extraction alone cannot fulfill U.S. supply chain needs without onshore or allied processing capacity?
Without addressing how or where Ukraine’s mined materials would be refined—let alone turned into functional inputs like magnets or battery components—the deal risks replicating the current dependency on China’s downstream dominance. In short, the report assumes that upstream access equates to supply chain security, when in fact, the bottleneck is downstream. This blind spot underscores the need for the U.S. strategy to shift from raw access deals to vertically integrated partnerships.
Without a strategy to close that loop, raw ore exports alone won’t reduce dependence on Chinese supply chains.
Meanwhile, looming political tension between Trump and Zelensky, and Trump’s warming ties with Putin, add another layer of uncertainty. For all its strategic ambition, the deal currently lacks the on-the-ground capabilities and market stability to become a pillar of Western minerals independence.
Much of this deal’s potential likely hinges on what President decides to do in the U.S. when it comes to an integrated rare earth and critical mineral integrated supply chain policy, backed by substantial investment and federal support.
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