The economic impact of the new agreement between Ukraine and the United States on the supply of strategically important minerals is not expected to manifest itself until a decade from now, and possibly even later. This is because investors face numerous obstacles to launching mining projects in the war-torn country.
About it writes Reuters.
According to mining industry experts, even in countries with established infrastructure, such as Canada and Australia, the process of creating mines takes 10 to 20 years. In Ukraine, the majority of deposits are poorly researched, which makes it difficult to assess their economic feasibility. Further complicating matters are the destroyed infrastructure - energy, transportation and other systems - as a result of Russia's ongoing invasion, as well as the lack of security guarantees.
"If anyone thinks that all these minerals will suddenly start flowing out of Ukraine, they are wrong. The reality is that it will be hard for people to justify putting money there when there is an opportunity to invest in critical minerals in countries that are not at war," said Adam Webb, head of minerals at Benchmark Minerals Intelligence.
Despite the uncertain economic outlook, Ukrainian authorities reportedly see the agreement as an important political move to bolster U.S. support, especially amid volatile U.S. foreign policy under Donald Trump. Ukraine badly needs Washington's assistance - both in arms and finance - to counter Russian aggression.
The U.S., for its part, is actively promoting the deal, emphasizing its strategic interest in Ukraine's deposits of rare earth elements, materials that are widely used in the production of electronics and automobiles. Amid a trade conflict with China, the largest supplier of these resources, Washington is seeking to reduce its dependence on external sources.
According to the text of the agreement published in Washington, revenues for Ukraine's recovery fund will come from royalties, licenses and production sharing agreements. The financial parameters of the deal are not disclosed, but it is mentioned that in the future it is planned to create a limited liability partnership between US International Development Finance Corp and the Ukrainian "Agency for Support of Public-Private Partnership".
At the same time, Ukraine possesses deposits of 22 out of 34 critical minerals defined by the European Union, including lithium, nickel and rare earth elements.
According to the Ministry of Finance of Ukraine, in 2024 the country received about 1 billion dollars of income from royalties and other payments related to the extraction of natural resources. However, the money flowing into the fund under the agreement will be formed only from new projects concluded after the agreement enters into force.
It is also noted that Ukraine was in no hurry to issue new licenses before the full-scale war began in 2022. According to the country's geological service, only about 20 licenses for oil and gas were issued between 2012 and 2020, and only a few for other resources: one for graphite, one for gold, two for manganese and one for copper. In total, there are 3,482 licenses in the country.
According to analysts, the form of partnership spelled out in the agreement may indicate the intention of both parties to invest directly in the creation of a mining company. Chile, which has the state-owned Codelco Corporation, the world's largest copper producer, is seen as an option to follow.
However, some deposits with high potential are located in Russian-controlled territories, and the text of the agreement does not contain clear security guarantees. U.S. officials have expressed the view that their presence could in itself deter hostile action.
Benchmark reports that 7 out of 24 promising projects, including lithium, graphite, rare earth metals, nickel and manganese mining, are located in the occupied territories.
As a representative of a Ukrainian company that holds a license for one of Europe's largest lithium deposits - Polokhovskoye - noted to the publication, the project is extremely difficult to implement without security guarantees from the West.
"This deal ties the U.S. even more closely to Ukraine because they now have a greater personal stake in ending this war so they can develop these assets," Webb emphasized.