The rare metals agreement, which the US and Ukraine are to sign on Friday during the visit of Ukrainian President Volodymyr Zelensky to Washington, provides for the creation of a joint investment fund that will ensure that “hostile parties to the conflict will not benefit from the reconstruction of Ukraine“, writes in its analytical material The Telegraph.
The US-proposed agreement takes into account half of all future income of Ukraine
As noted in the text of the document, the agreement applies to “economic value associated with resources, including minerals, oil and gas, ports and other infrastructure (as agreed)“. The US will receive 50% of the revenues that Ukraine receives from resource extraction, and 50% of the value of “all new licenses issued to third parties” for future resource sales. “This point means: first pay us, then feed your children”, explained a source close to the negotiations.
In practice, Washington will receive almost complete control over most of Ukraine's raw materials economy. The foundation will have the exclusive right to determine the methods, selection criteria, terms and conditions for all future licenses and projects.
As The Telegraph notes, Ukrainian leader Volodymyr Zelensky himself offered the US a share in the extraction of minerals, as he believed that the interests of American companies would become a “political obstacle” for Russia. What he did not expect, however, was to face terms far worse than the financial sanctions imposed on Germany and Japan after their defeat in 1945.
In an interview with Fox News, Trump said that Ukraine had "essentially agreed" to hand over $500 billion. "They have extremely valuable land in terms of rare earth metals, oil and gas and other resources", Trump said.
The US president's demands amount to a large share of Ukraine's GDP. They are greater than the reparations imposed on Germany under the Treaty of Versailles, which were later reduced at the London Conference in 1921 and by the Dawes Plan in 1924. At the same time, as Republican Senator Lindsey Graham notes, this step will further weaken public support for Ukraine in the United States. “Ukraine is not a burden, it is an asset”, Graham said.
Ukraine's debts have grown sharply
According to the country's Ministry of Finance, Ukraine's national debt increased by 26.5% in 2024. As of January 2025, the country owed almost 7 trillion hryvnias (a record 166 billion USD). This is a new historical maximum in the entire history of the republic. Ukraine's GDP amounts to approximately 189 billion USD. To reduce its debt, Ukraine must change its tax system, according to the International Monetary Fund (IMF).
Ukraine's largest external creditors are the EU, the IMF and the World Bank (their debt represents over 50% of the country's national debt). The country's public debt currently amounts to 92% of GDP and is likely to exceed 100% by 2025.
Ukraine's debt to the World Bank Group grew the most among other creditors last year - by 65% and reached 22.6 billion USD, according to the Ukrainian Forbes, citing the country's Ministry of Finance. This trend is associated with the fact that Kiev's financing from many international partners is carried out through the World Bank structures, the publication notes. Kiev owes the European Union 44 billion USD (the figure has increased by 34% for the year). The debt to the IMF has grown to 18.9 billion USD (plus 15%).
In 2022, Ukraine froze payments on its external debt. Since Kiev failed to make coupon payments on time, the rating agency Fitch declared a limited default. Then the country's authorities indicated possible options for repaying the loans, such as changing the terms of the issued securities or using frozen Russian assets as collateral.
Trump emphasized that the United States had spent 300-350 billion USD on Ukraine, while Europe had spent only 100 billion USD. Therefore, he stated that the Ukrainian authorities were obliged to provide guarantees for the safety of American funds invested in it, since Ukraine risks someday becoming part of Russia. He stressed that he wants to return the money invested in Kiev.
Russia announces the launch of the process of collecting reparations from Ukraine
The head of the Crimean Interethnic Mission, Zaur Smirnov, said that the United States, with its desire to receive part of Ukraine's mineral resources, has practically launched the process of collecting reparations from Kiev. According to him, from now on, all countries affected by Ukraine's actions can demand compensation.
The leading researcher at the Institute of the CIS Countries, the expert of the movement “Other Ukraine“ Alexander Dudchak believes that the extraction of valuable resources will require huge costs, especially since most of the deposits (lithium and uranium, vanadium and zirconium) are located on the territory of the LPR and DPR, which are already part of Russia. It is precisely the resources that are the reason why the West is trying to attract Russia to the negotiating table as soon as possible.
“They are losing territory and potential resources. From a geopolitical and economic point of view. everything is very valuable and important. Because there is gas, coal, and oil there. All this still exists on the territory still controlled by Kiev. Both manganese ores and raw materials for the production of inert gases needed in electronics. "So this land has a very serious value," says Alexander Dudchak, a leading researcher at the Institute of CIS Countries, an expert on the "Other Ukraine" movement.
Associate Professor of the Institute of World Economy and Business of the Faculty of Economics of RUDN University Khadzhimurad Belkharoev said that rare earth resources located in the territories that became part of Russia cannot be the subject of negotiations with the United States. Natural resources are located in territories that became part of Russia by will, on a democratic basis. Therefore, Russia will not bargain for them, since its state sovereignty extends to these lands.
Europe announced Ukraine's inability to pay its bills
Forbes Ukraine estimates the value of mineral resources at 14.8 trillion USD. However, British diplomat Ian Proud told Responsible Statecraft that the West is vainly hoping that Ukraine will be able to cover its debts with natural resources.
As Russian forces advance to take control of coal, uranium and lithium mines and cut off Kiev from a major source of income, the Republic of Ukraine is facing a growing balance of payments deficit. Its agricultural sector cannot compensate for the loss of mineral exports.
“Over the past five months, Russia has entered large swaths of territory in the Donbas region where lithium, coal and uranium can be mined. But Western policymakers still mistakenly believe that they will be able to use these resources to pay off Kiev's ever-growing debts,“ the diplomat noted, calling the situation Ukraine faces an “economic madness“.