U.S. Ukraine mineral deal could reshape global supply chain, but risks loom

Mineral deal with Ukraine offers strategic gain for U.S., but extraction faces war, investment, and infrastructure hurdles.

A chalk quarry near Mount Karachun is seen at sunrise on March 9, 2025, in Sloviansk, Ukraine. Photo by Maks Muravsky/Getty Images

By Anna Fadiah and Hayu Andini

The recently announced U.S. Ukraine mineral deal, which grants the United States shared rights to Ukraine’s vast untapped mineral reserves, is being hailed by Washington as a strategic breakthrough in reducing dependence on China for critical raw materials. However, the path to realizing those resources — from rare earths to oil and gas reserves — is far from straightforward.

President Donald Trump has championed the deal as a future economic windfall, predicting hundreds of billions of dollars in returns. Yet experts caution that without peace, investment, and massive infrastructure rebuilding, the prospects of turning these underground riches into actual revenue remain speculative at best.

War-torn ground beneath trillion-dollar dreams

Ukraine’s natural resource maps show mineral reserves valued in the trillions — lithium, titanium, graphite, uranium, and other strategic elements vital for everything from smartphones to fighter jets. However, many of these maps were compiled decades ago, well before modern surveying standards.

“These figures are based on Soviet-era data,” said Gracelin Baskaran, director of the Critical Minerals Security Program at the Center for Strategic and International Studies. “To determine actual economic viability, new geological surveys will be needed, and that can take years.”

The war with Russia, now in its fourth year, presents a foundational obstacle. Not only are many mineral-rich areas occupied or near front lines, but the continuous bombardment of Ukraine’s power grid makes future mining operations logistically daunting.

Mining operations require enormous and consistent energy supplies. With missiles and drones regularly targeting Ukraine’s already fragile energy infrastructure, scaling up for mineral extraction — especially on a national level — could remain a distant goal.

Peace needed before profits

While the U.S. Ukraine mineral deal has captured attention for its long-term potential, short-term returns appear unlikely. Ukraine’s president, Volodymyr Zelensky, initially floated the idea in 2024 as a geopolitical bargaining chip to solidify Washington’s support in Kyiv’s fight against Moscow. However, the proposal sparked controversy.

Tensions arose when early drafts of the agreement — interpreted by some Ukrainian officials as coercive — coincided with resumed U.S.-Russia direct talks. Critics labeled the original plan as forcing Kyiv to “pay” for past American aid with natural resources while offering no guarantees of future support.

After diplomatic pushback, the agreement was revised, but it remains politically delicate. The balance between strategic partnership and resource exploitation continues to be scrutinized in both Kyiv and Washington.

Targeting China’s mineral dominance

The U.S. Ukraine mineral deal also reflects broader geopolitical motivations. With China currently controlling over 90 percent of global rare earth processing and 60 percent of mining operations, Western countries have scrambled to secure alternative sources.

“One of the things that is attractive about Ukraine is, globally, a lot of the reserves have been hoovered up by the Chinese,” said Baskaran. “Ukraine is full of untapped potential.”

Ukraine estimates it holds about 5 percent of the world’s most critical raw materials. The U.S. Geological Survey confirms that Ukraine possesses at least 20 of the 50 minerals deemed vital to America’s economic and military infrastructure.

But turning this potential into reality is complicated, even with permits in place.

Lithium and the long wait for viability

A test case for the U.S. Ukraine mineral deal lies in Polokhivske, home to a lithium site that, if operational, could supply roughly 2 percent of global lithium demand. Yet this seemingly modest figure is significant in a market as strategic — and volatile — as lithium.

However, Martin Jackson, head of battery raw materials at CRU, notes that global lithium prices are currently too low to justify risky investments.

“Depressed prices are already holding up less risky projects,” Jackson said. “The biggest obstacle here is actually the lithium market, not the permits.”

UkrLithiumMining, the company that owns the Polokhivske site, has held a license since 2017. But after eight years of ownership, the mine has yet to break ground. Denys Aloshyn, the company’s chief strategy officer, said they hope to begin extraction by 2029 — but only if they can raise the $350 million needed for full development.

“We’ve always lacked foreign direct investment,” Aloshyn said. “This deal presents an opportunity, but progress will remain slow as long as the war continues.”

Black Sea energy: immediate promise, complex politics

While minerals may take years to yield returns, some experts see more immediate potential in offshore oil and gas development. According to Nataliia Shapoval, vice president at the Kyiv School of Economics, the Black Sea — and possibly the Sea of Azov — holds lucrative short-term possibilities.

“It sets the stage for recovery, for investment, for development of the Black Sea region,” she said. She pointed to Romania’s growing natural gas operations as an example of regional momentum that Ukraine could mirror — if the war de-escalates.

Still, overlapping maritime claims, security concerns, and environmental issues cloud the feasibility of rapid development in the region.

Strategic risk or long-term reward?

While Trump’s administration touts the U.S. Ukraine mineral deal as a win-win, analysts stress that timelines for profit and impact remain long. As Baskaran emphasized, even under ideal conditions, bringing a viable deposit into production takes 15 to 20 years.

“There could be a lot more economically viable deposits,” she said, “or it could be that they’re just not worth the effort.”

In the meantime, billions in investment, political stability, and significant infrastructure reconstruction will be required. While the deal enhances U.S. influence and offers Ukraine a pathway to rebuilding and recovery, its success will depend on far more than mineral maps and presidential promises.

For now, the deal symbolizes strategic ambition rather than imminent transformation.