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Heidi Crebo-Rediker is a senior fellow in the Center for Geoeconomic Studies at the Council on Foreign Relations.
The United States signed an energy and critical minerals agreement with Ukraine on Wednesday. It establishes a joint investment fund between the two countries that both said will be used to aid Ukraine’s economic recovery after Russia’s invasion.
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In the deal’s announcement, U.S. Treasury Secretary Scott Bessent said it showed Russia that President Donald Trump and his administration is “committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term.” The president pursued “this partnership between the American people and the Ukrainian people to show both sides’ commitment to lasting peace and prosperity in Ukraine,” the secretary added.
The arrangement does not include any explicit U.S. security guarantees for Ukraine, despite Kyiv making this a priority during negotiations. It also does not commit the United States to providing further military aid. Before the signing on Wednesday, however, Trump claimed at a cabinet meeting that the United States would be able to recoup the money it spends on Ukraine’s defense via this new agreement.
“I didn’t want to make a complicated deal,” Trump said. “Rare earth is called rare for a reason—and they have a lot—and we made a deal where our money is secure, where we can start digging and doing what we have to do.”
The Ukrainian Geological Survey reports the country has vast untapped critical mineral deposits. This includes titanium, lithium, graphite, nickel, and cobalt, which are seen as essential for emerging technologies.
CFR turned to Senior Fellow Heidi Crebo-Rediker to explain the deal and the economic, diplomatic and political dynamics tied to it.
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Break down this deal for us and help us understand its scope.
The agreement essentially establishes a jointly run U.S.-Ukrainian fund—the United States-Ukraine Reconstruction Investment Fund—to invest in and benefit from Ukraine’s future economic recovery. The United States will contribute both financial and new military support and facilitate public and private investment in Ukraine’s mineral resources, including critical minerals, rare earths, and oil and gas, as well as related infrastructure. In return, Ukraine will contribute 50 percent of future revenues of royalties from newly issued licenses for critical minerals and oil and gas exploration.
Getting this deal signed was highly symbolic—it locks the United States and President Trump personally to the success of Ukraine’s economic future. Although the projects envisioned will likely take years to develop, the deal will unlock opportunities for American investors with U.S. government support once Ukraine’s sovereignty is secure, which depends on Russia ceasing its onslaught on Ukraine’s territory. In the immediate term, it unlocks some vital military support for Ukraine.
What minerals does Ukraine have, and why are they so critical?
The geopolitical rivalry between the United States and China has put critical minerals at the center of the U.S. national security agenda. The United States is dependent on China for many critical minerals and rare earth elements used in modern technologies, including advanced defense systems, aerospace, renewable energy, and manufacturing. Worse, China is weaponizing this dominance in the context of the current trade war and in response to U.S. export controls on technologies such as advanced semiconductors.
Ukraine’s vast reserves of critical minerals and rare earth elements—assuming they are commercially recoverable—can provide a future potential secure supply chain of many materials the United States needs. Ukraine is especially rich in titanium, graphite, and lithium, but many of the rare earth deposits are located in contested land or too close to active war zones to be developed.
Negotiations have gone on for months. Whose idea was this agreement and why did it take so long to settle on the terms?
The original proposal to offer joint development of Ukraine’s critical minerals and rare earth elements came from the Ukrainians, in a good faith effort to align economic and national security interests between the US and Ukraine. When Trump took office in January, he made it clear that he viewed military support and aid as a zero-sum drain on the United States’ resources. Ukraine’s intention was to counter that narrative by putting a deal on the table that compensates U.S. taxpayers for their support—and makes defending Ukraine worth Trump’s while— by providing access to and allowing the development of its resources.
It took a long time to negotiate because the first offer from the United States sought more than Ukraine could deliver. There was a past agreement that took weeks to negotiate, but it was scuttled after President Volodymyr Zelenskyy and Trump’s disastrous meeting in the Oval Office last February. Trump then shut down military assistance and intelligence sharing temporarily—sending a strong signal to Ukraine, and the world, of who held all the cards. Quiet technical negotiations continued back and forth over the weeks that followed to get to what was basically the original agreement.
Why is the Trump administration so adamant about this mineral deal? How does it benefit the United States?
President Trump’s “America First” approach to diplomacy is centered on the United States getting a better deal for the security assistance it provides to allies and partners, including Ukraine. Congress appropriated roughly $183 billion in military aid and budget support since Russia’s brutal second invasion of Ukraine in 2022. Moving forward, the Trump administration wants to get paid back for any future support, even if it takes years.
Ukraine had sought security guarantees during the negotiations. Does this provide any or create a pathway to continued aid?
The agreement does not include any security guarantee, something the Ukrainians very much wanted. It does, however, indicate that shared economic security, in the way Trump envisions it, would secure Ukraine’s sovereignty more than any security guarantee. It is intended to unlock new financial and new military support, which Ukraine desperately needs right now. So yes, it does create a pathway to continued aid.
Did either side make any notable concessions since an initial draft went public in February?
The Ukrainians did not get their security guarantee in the end, which was a big concession. They also did not get a guarantee of future military assistance. They did, however, open up the potential for new military assistance, and reports from the Kyiv Post indicate the Trump administration unlocked $50 million in exports of defense-related products to Ukraine on Wednesday.
Longer term, they sealed a deal that ties Ukraine’s economic fate to Trump—it was clocked as a win and will be part of the president's legacy. Ukraine was also able to ensure that the agreement does not impede or conflict with Ukraine’s European Union accession, does not contradict Ukrainian law or compromise sovereignty, and that the Fund is jointly and equally managed.
How do you anticipate Russia will respond?
This agreement was meant to be a signal to Russia, but I do not expect any immediate change in behavior from them.
How will the agreement move forward? Are there further hurdles, and when and how will the United States see any practical benefits?
There are still quite a few details to be worked out here as it is not entirely clear how the new Fund agreements will work in practice. As the U.S. International Development Finance Corporation will represent the United States as the limited partner, it will obviously take time to finalize the details of the agreement and negotiate U.S. support for investment in Ukraine’s natural mineral resources and infrastructure.
This work represents the views and opinions solely of the author. The Council on Foreign Relations is an independent, nonpartisan membership organization, think tank, and publisher, and takes no institutional positions on matters of policy