This week, a mineral agreement was established between the United States and Ukraine, which President Donald Trump has described as a “very big deal.” This development is expected to lead to a visit from President Volodymyr Zelensky to the U.S. However, experts consulted by Forbes express skepticism regarding the potential for significant revenue generation in the near term, citing the high costs and lengthy timelines associated with extracting the raw materials that the White House is interested in.
Zelensky confirmed the agreement, which stipulates that 50% of the revenue from Ukraine’s state-owned mineral resources will be allocated to a jointly managed fund.
While the details of the agreement remain somewhat ambiguous, it is understood that it will not involve currently operational mines. The proceeds are intended, in part, to reimburse the U.S. for its financial assistance to Ukraine amid its conflict with Russia, as well as to contribute to the reconstruction of the war-affected nation, according to a draft contract reviewed by various news outlets.
Trump has emphasized Ukraine’s significant reserves of natural resources, including lithium—crucial for batteries, particularly in electric vehicles—graphite, which is used in batteries and aerospace engines, and ilmenite, a source of titanium utilized in aircraft engines and smartphones.
Nevertheless, experts warn that the expenses associated with mining these sought-after minerals could be substantial, requiring years of investment and potentially yielding limited returns.
Trump has also highlighted Ukraine’s “great rare earth” metals, which encompass 17 metallic elements essential for battery production and advanced defense technologies. Ukraine is estimated to hold about 5% of the world’s rare earth minerals.
However, according to S&P Global, Ukraine currently lacks operational rare earth mines. Expanding the development of Ukraine’s untapped resources, including graphite, lithium, and titanium deposits—which were at various stages of development before Russia’s invasion in 2022—will necessitate considerable investment and effort.
It is unlikely that any significant developments will occur in the near future. According to George Ingall, a rare earths pricing analyst at Benchmark Minerals Intelligence, these minerals are not expected to generate profit within the next 10 to 15 years. He emphasized that lithium is likely to be prioritized in development efforts, but analyst David Deckelbaum indicated that a realistic timeline for Ukrainian lithium supply reaching the market is at least three to four years away. Furthermore, Ukraine will retain all revenues from its existing mines, which may hinder U.S. access to several mineral projects currently underway in the country, including a 90-year-old graphite mine and two nascent lithium mines, as noted by Ingall.
Significant Investment Required
The capital required to operationalize a rare earth mineral mine can reach up to $2 billion, as stated by Ingall, who pointed out that miners worldwide are facing challenges in securing investment due to unfavorable market conditions. He explained that possessing rare earth ores is insufficient if mining them is not profitable, as this deters potential investors.
In the near term, Thomas remarked that graphite and rare earths are relatively plentiful globally. However, the majority of their value lies not in the raw deposits but in the refining process, which transforms the metals into the chemical forms necessary for battery production—a process that is predominantly concentrated in China. Currently, China holds 65% to 70% of the lithium refining capacity. Nevertheless, simply acquiring more raw materials does not guarantee a solution outside of China, as there are abundant resources available from Australia to South America. Competing with Chinese operations has proven economically challenging, as China’s extensive supply drives prices down, making it difficult for others to remain viable in the market.
As the second-largest producer of electric vehicles worldwide, it is not unexpected that the company led by Elon Musk is recognized as “one of the largest purchasers of lithium globally.” However, Tesla’s approach to lithium sourcing reflects the wider supply chain dynamics, with the company acquiring the metal from various sources. Prior to Russia’s invasion, Ukrainian officials reached out to Musk regarding potential investments in the development of their nation’s lithium resources, as reported by The New York Times. Despite Musk’s significant influence alongside Trump during his presidency, there has been no connection established between Tesla and the 2025 agreement.