Mineral revenues, a decade later - US and Ukraine may wait over 10 years to benefit from the agreement
The financial payoff from a new minerals deal between Ukraine and the U.S. could take a decade or more, as investors face many hurdles to bring new mines into production in the war-torn country.
The development of mines producing strategically important minerals in countries with advanced sectors, such as Canada and Australia, could take 10 to 20 years, according to analysts.
But most mineral deposits in Ukraine have little data to confirm they are economically viable. Investors may also be hesitant to funnel money into a country where infrastructure has been destroyed by Russia's three-year occupation and future security is not guaranteed.
"If anyone thinks that suddenly all these minerals will fly out of Ukraine, they are dreaming. The reality is that it will be difficult for people to justify investing money there when there are opportunities to invest in critical minerals in countries that are not at war," sector experts emphasize.
While the financial benefits of the deal are uncertain, officials in Ukraine hailed it as a political breakthrough: They believe it will help bolster American support for Kiev, which has declined significantly under President Donald Trump.
Ukraine needs US support, especially weapons and money, to withstand Russia's military invasion.
On the other hand, Trump has promoted the deal, especially the access it provides to Ukraine's deposits of rare earth elements, which are used in everything from cell phones to cars. So the government policy could accelerate investment.
The United States does not produce significant quantities of rare earth elements and has fueled a trade war with China, the world's leading supplier.
The text of the agreement lists 55 minerals plus oil, natural gas and other hydrocarbons. According to Ukrainian data, the country has deposits of 22 of the 34 minerals identified by the European Union as critical, including rare earth elements, lithium and nickel.
"Going from a discovered resource to an economically viable reserve requires time and significant investment, both of which have been limited, not only since the beginning of the war, but even before it," analysts point out.
Data from the Ukrainian Finance Ministry showed that in 2024, the Ukrainian state earned about $1 billion in payments related to the exploitation of natural resources. But the joint fund created under the agreement will receive income only from licenses, permits and new production-sharing agreements.
Ukraine has been slow to issue new natural resource licenses ahead of Russia's full takeover in 2022. From 2012 to 2020, about 20 were issued for oil and gas, one for graphite, one for gold, two for manganese and one for copper, according to the Ukrainian geological survey. In total, there are 3,482 existing licenses.
Since the agreement creates a limited partnership, both countries could be seeking direct government investment in a mining company, analysts said.
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