Ukrainian and US negotiators are seeking to move past the breakdown in transatlantic relations this week to finalize a deal on critical minerals, a person with knowledge of the talks said.
Two days after President Donald Trump hectored President Volodymyr Zelenskiy as a “dictator” who needed to move quickly on a peace deal, Ukrainian officials are discussing the minerals issue with US special envoy Keith Kellogg during a visit to Kyiv, the person said on condition of anonymity as talks take place behind closed doors.
Zelenskiy, who rejected an initial US offer that involved securing half the income from Ukraine’s minerals, said that his meeting with Kellogg on Thursday had “restored hope.”
The US proposal involved securing 50% of license sales and other proceeds from the minerals, which would violate Ukrainian laws, a person familiar with the discussions said. Kyiv put forward changes to the offer that would benefit both sides, as critics of the draft deal denounced it as reminiscent of colonialism of centuries past.
Trump has said he wanted the equivalent of $500 billion worth of rare earths, which are mainly used in high-strength magnets. But despite reports of $10 trillion worth of mineral deposits, Ukraine has no major rare-earth reserves that are internationally recognized as economically viable. Most deposits are likely by-products of producing materials like phosphates. Some are in areas of Russian control.
A completed deal on US access to Ukrainian minerals in exchange for security guarantees would be a key element of the Trump administration’s effort to end the three-year war. Trump has said he may meet with Russian President Vladimir Putin soon.
“We need strong agreements with the United States – agreements that will truly work,” Zelenskiy said in his daily address to the nation late Thursday. “The economy and security must always go hand in hand.”
A minerals deal would ideally be signed in the presence of the US and Ukrainian presidents, according to the person. Zelenskiy, who met with Kellogg on Thursday, has pushed for a meeting with Trump before the US leader meets Putin.
‘Get Them Onside’
Zelenskiy’s team spurned an initial US draft agreement presented last week by Trump’s treasury secretary, Scott Bessent, in Kyiv that would give the US access to the war-battered nation’s critical minerals.
Zelenskiy rebuffed the offer, saying at the Munich Security Conference — where Trump administration officials, including Vice President JD Vance, had expected him to sign — that it failed to protect Ukraine’s interests.
Bessent said Zelenskiy had assured him ahead of the Munich conference that Ukraine would sign the $500 billion deal, but then demurred.
“The sequencing of what was going to happen was: bring the Ukrainians closer to the US through economic ties, convince the American people, the American public, get them onside,” Bessent told Bloomberg Television on Thursday. “And then tell the Russians, go to the negotiating table with a very fulsome message that if we need to, we will take sanctions up.”
The breakdown coincided with a tit-for-tat between Zelenskiy and Trump that brought the US administration’s sharp turn away from Ukraine in stark relief. Reacting to Trump’s complaint over the failure to sign the accord, in which he criticized Zelenskiy’s failure to hold an election, the Ukrainian leader fired back, saying the US president had fallen for Russian “disinformation.”
Trump followed with a social media post denouncing Zelenskiy as a “dictator,” apparently unraveling the US’s position on Ukraine since the start of the war — and prompting outrage from NATO allies.
Still, the US continues to pursue the mineral deal. An agreement would lay the groundwork for Trump’s pledge to end the conflict and compensate for billions of dollars in support for Kyiv has already provided.
The US administration sees the minerals deal as a way to bind America and Ukraine, according to another person familiar with the matter. Still, much of Ukraine’s future security guarantees will be on Europe, the person said.
(Bloomberg, February 21, 2025)
