Ukraine Minerals Deal Won't Fix America's Mineral Problem
“We’ve basically made an agreement with very little data,” warned one expert.
On Wednesday, the United States and Ukraine reached a minerals-for-aid agreement that will give the U.S. access to a share of Ukraine's natural resources and reserves of lithium, graphite, titanium, zirconium, antimony, gallium, and germanium. Under the deal, Ukraine will receive "$350 billion and lots of equipment, military equipment, and the right to fight on," President Donald Trump said on Tuesday. The agreement also establishes a jointly managed fund to finance reconstruction efforts in Ukraine. The fund will derive half of its money from the revenue from future natural resources projects.
Notably, the agreement does not include explicit security guarantees for Ukraine, which Ukrainian President Volodymyr Zelenskyy previously said would be needed to reach a deal. However, the deal states that the U.S. "supports Ukraine's efforts to obtain security guarantees needed to establish lasting peace," according to The Wall Street Journal.
The deal comes as the United States looks to shore up its supply chain of critical minerals, which are essential to powering many sectors of the U.S. economy. Despite their importance, the U.S. is heavily reliant on foreign nations to supply many of these materials; imports account for more than half of the U.S. demand for 39 of the 50 minerals deemed critical by the United States Geological Survey (USGS). While some of these materials come from friendly countries like Canada and Argentina, many of the imports are supplied by China, which controls 60 percent of global mineral production.
Germanium and gallium from Ukraine could be especially valuable. These two metals are becoming increasingly important to the production of high-performance chips "due to their properties that boost device performance, speed, and energy efficiency," according to the Center for Strategic and International Studies (CSIS). The U.S. has no reserves of gallium—the last domestic recovery of the metal was in 1987—and a limited supply of germanium. From 2020 to 2023, the U.S. imported 51 percent and 19 percent of its germanium and gallium from China, respectively. In 2024, China banned the export of these metals to the U.S. in response to American trade and investment restrictions on Chinese companies. The USGS estimates that this ban could decrease U.S. gross domestic product by $3.4 billion.
Despite having 19 million tons in reserves, more than 50 percent of America's lithium needs are met by imports (primarily from Chile and Argentina). In October 2024, the Department of Energy awarded a $2.26 billion loan to build manufacturing facilities at Thacker Pass, a lithium mine in Nevada that contains an estimated 14.3 million tons of the metal, the largest confirmed source in North America.
While some projects are underway to develop a domestic supply of graphite, which, like lithium, is used to power batteries and green technologies, the mineral is exclusively sourced from other countries. China provides 43 percent of these imports and produces an estimated 78 percent of the world's graphite.
Still, there are several reasons to be cautious about the deal, warned Gracelin Baskaran, director of the critical minerals program at CSIS, on CBS News. "We're relying on data that's 30 to 60 years old and that was generated by the Soviet Union. At that time, technology was much older. Some of the minerals that we talk about for advanced semiconductors were not things that we were thinking about as being particularly important."
"We've basically made an agreement with very little data," she added.
The agreement's lack of security guarantees could also give the private sector pause before investing in projects in the country. As Baskaran points out, it takes an average of 18 years to develop a mine, which can then operate for 30 to 80 more years. "So we're talking about a period that is much longer than a security guarantee of one United States president. And that's where an explicit written guarantee is more valuable than the implicit guarantee."
