Kiev made the US an offer that he considered attractive, but it ended up returning against Kiev, reports Politico, in an analysis on the potential of the agreement and how it turned into a political disaster for Kiev.
Much of Ukraine's mineral resources are in the busy photo shutterstock
Kiev officials presented Ukraine as among the most important places in the world for the extraction of rare essential lands and other minerals needed for a modern economy, but also to make wealth.
The exploitation of massive mineral reserves was the offer of Kiev to convince US President Donald Trump to continue his country's support for Ukraine. Kiev bet on the attractive character of a transaction and did not make mistakes.
Trump was interested in Ukraine, but rather in order to squeeze him from money, than to help him ensure a stable post-war peace.
“The offer on critical minerals was a moment of security for Ukraine. Ukraine has extremely important resources such as titanium, uranium and others. And if Russia puts hands on these resources, it will be a disaster for Kiev allies.” He appreciated a high official to be aware of the negotiations, speaking subject to anonymity.
In the meantime, however, Kiev's bet on his ore has turned into a political disaster, and Ukraine may not even have the vast resources he promised. In addition, their extraction would cost billions and take decades – not by far the calendar that Trump would probably dream of.
Initially, the ores were included in the project of a peace agreement presented last year by Ukrainian President Volodimir Zelenski, along with requesting an invitation to join NATO and the commitment from the West to continue to arm Ukraine.
Currently, the project has been reduced only to these resources, and the agreement turns into an existential problem for Ukraine.
Kiev was taken by surprise when the American Treasury Secretary, Scott Besent, arrived in Ukraine in February with a project on teaching half of the country's rare earth elements to American companies. Zelenski was angry.
After Ukraine refused, the two parties negotiated a more fair agreement that Zelenski had to sign at the White House on February 28. But the visit ended disastrous, Trump and his vice-president JD Vance attacking the Ukrainian president, who was expelled from the Oval Office. No agreement was signed.
The United States then returned with another proposal that resumed most of the toxic elements of the first project.
This does not provide security guarantees and no additional help or investments, instead it offers Washington preferential access to all Ukraine's natural resources – as well as financial control over the State Fund for Reconstruction and all its projects – until Kiev reimburses US billions of military aid – originally paid in the form of subsidies.
“The current project significantly undermines the strategic balance, limiting Ukraine's regulatory and fiscal autonomy”, explained Volodimir Landa, main analyst at the Center for Economic Strategy in Kyiv.
At the same time, the agreement endangers Ukraine's chances of joining the European Union, as it violates the EU legislation on competition and the environment, the expert said
On the other hand, such an amount due to the US is likely to scare investors who, otherwise, may be interested in helping Ukraine.
“Other partners will probably not accept that their help be taken out of Ukraine in favor of a third party.” A declared Landa.
On the other hand, the Ukrainian government does not want to attract Trump's anger again, so officials refrain from criticizing the new variant, preferring to gently adjust the terms.
“Last time, the Ukrainians were forced to explain that some aspects that the US want from Ukraine will not materialize, as they are contrary to our laws and Constitution. So let's change the agreement so that we must work. This discussion ”said the high official.
What mineral resources are in Ukraine
The question that plans about the discussions is how rich in ore is actually Ukraine.
It owns about 5% of the world reserves of rare lands, according to UN data. These include lithium, beryllium, niobiu, tantal, titan, nickel, cobalt, graphite and phosphate, essential metals for energy, technological and defense sectors, explained Alla Vasilenko, a principal researcher at the Institute of Geological Studies of the National Academy of Sciences in Ukraine.
“Most of them were discovered in the years 1960-1980. Then, the researchers did not pay attention to the aspects that are currently important: the destination of the land and the form of property, the environmental, sanitary and other restrictions for operation, as well as public opinion.”said Vasylenko.
“However, the reserves have been approved in accordance with the Soviet system, which foreign investors do not understand. So, theoretically, we can say that Ukraine has the largest lithium reserves in Europe, but in order to find out their economic potential we must first carry out additional studies of our deposits.”
In addition, the operation will not be simple at all.
The war must end before Ukraine can extract Profi from its mining of critical minerals that is underdeveloped. Ukraine should and repair its damaged energy network.
“Ukraine needs investments, not only in mining, but also in the processing industry. Investments should be primarily American – billions and maystressed Andrii Brodskii, CEO of Velta Group, the largest private producer of titanium ores in Ukraine.
Seven years lasted to set up his titanium oxide mine.
Lithium mining needs between 10 and 15 years to be exploited, said Denis Alioșin, strategy director of UKRLITHIUMINING (ULM).
Ulm bought in 2017 a 20 -year -old license to extract Lithium from the Polohivske deposit in the Kirovohrad region in exchange for $ 5 million. Polokhivske looks like an empty field, with just a few detectors, sensors and exploration drill.
“In order for our lithium mine and the enrichment plant to start working, we would need investments of $ 350 million. Our strategy is to find global strategic players to finance our deposit, while we maintain a local partner,” added Alioșin.
The initial objective of the Ukrainian government was for the United States to be this partner – providing security to allow the country to recover after the war and discourage a new Russian attack.
