A New Page in Ukraine-US Cooperation: Geopolitical and Economic Framework of the Rare Earth Elements Agreement

Rare earth elements (REEs), which have strategic importance in the global energy and technology ecosystem, have become one of the important parameters of international relations in recent years. The rare earth elements agreement, which is being negotiated and planned to be signed between Ukraine and the United States of America, is considered as a development that will bring about various effects not only in bilateral relations but also on a global scale.

Rare earth elements are the general name of 15 elements known as the lanthanum series in the periodic table, and a total of 17 elements consisting of scandium and yttrium. These elements are critical in the production of strategic products such as high-performance magnets, lasers, phosphors, catalytic converters, electronic devices and defence systems, which are indispensable components of modern technology. Their extensive use in applications such as wind turbines and electric vehicle engines in the transition to green technologies in today's world increases the demand for these elements exponentially.

Ukraine has a significant amount of rare earth element potential among the rich mineral reserves inherited from the Soviet Union period. Especially in the deposits located in the eastern and central parts of the country, the presence of technologically critical elements such as neodymium, praseodymium, dysprosium and terbium has been identified. However, the lack of a systematic mining strategy for the optimal utilisation of these resources in the past and the inadequacy of the necessary technological infrastructure have limited the conversion of this potential into economic value.

From the perspective of the United States, the vulnerabilities in the supply chain of rare earth elements and China's dominant position in this field are perceived as risk factors in terms of long-term economic security and technological superiority parameters. The potential of China, which controls approximately 60 per cent of global REE production and 85 per cent of processing capacity, to use this strategic advantage as a geopolitical lever has prompted American policymakers to seek alternative supply channels.

In this context, the Ukraine-US rare earth elements agreement represents a synchronisation of complementary strategic objectives for both countries. For Ukraine, access to US capital and technology in the exploitation and processing of high value-added mineral resources is a critical driver for economic development and industrial modernisation programmes. It is also symbolic in terms of the consolidation of American strategic support in the ongoing conflict with Russia.

From the United States' perspective, the agreement should be read as a concrete manifestation of its diversification strategy in the rare earths supply chain. Making Ukraine's mineral potential accessible to the American technological ecosystem not only increases the security of supply, but also has the potential to restructure the competitive dynamics in the global rare earths market.

When the technical aspects of the agreement are analysed, it is understood that a comprehensive cooperation framework is envisaged in the fields of joint exploration activities, reserve evaluation studies, sustainable mining technologies, enrichment and separation processes and advanced materials production. In particular, minimisation of environmental impacts and integration of circular economy principles stand out as the key components of the sustainability vision of the agreement.

The potential economic impacts of the Ukraine-US rare earths agreement are not limited to direct investment and trade flows. In the long run, indirect development dynamics such as technology transfer, human capital development and transformation of the domestic industrial ecosystem are also considered among the expected gains of the agreement.

From a geopolitical perspective, the agreement can be analysed as a consolidation of the transatlantic alliance system in Eastern Europe and a new dimension of strategic raw material diplomacy. Similar to Russia's use of its control over energy resources as a geopolitical instrument, rare earths have the potential to shape the global balance of power as a strategic leverage mechanism in the future.

However, various challenges and constraints should also be taken into account in the process of implementing the agreement at the operational level. Political instability in Ukraine, the ongoing military conflict, institutional capacity deficiencies and infrastructure inadequacies may pose obstacles to the realisation of the projects within the planned timeframe and within the projected cost parameters.

In conclusion, the planned rare earth elements agreement between Ukraine and the United States should be considered as a strategic move in the transformation process of the global energy and technology ecosystem. The potential benefits and synergy effects of the agreement for both countries should be analysed not only in terms of economic parameters, but also in terms of geopolitical and strategic dimensions. This step in the process of restructuring and diversification of the global rare earth elements supply chain may constitute a critical milestone towards the goals of technological independence and economic security.

Final Status of the Agreement

Although the draft of the planned partnership agreement between Ukraine and the USA on rare earth elements was announced by Ukrainian President Volodymyr Zelensky on 26 February 2025, it was somewhat suspended due to the tension between the parties during the meeting in the Oval Office on 28 February 2005. However, the negotiations between the parties continued, albeit tense, and on 28 March 2025, a new agreement proposal was submitted to Ukraine by the USA.

However, Zelensky stated that the draft agreement was under review and emphasised that Ukraine would only approve the version of the agreement that is convenient for it. ‘If this agreement creates a risky situation for us, I will openly share this with society,’ he said. He also stated that Ukraine will not accept debt and will take a firm stance on this issue.

These statements made by Zelensky were severely criticised by Trump. So much so that Trump said in his statement, ‘I think Ukrainian President Volodymyr Zelensky is trying to withdraw from the minerals agreement with the United States, and if he does, he will have some problems, big, big problems.’ The main factor that caused Trump's serious negative reaction is Ukraine's desire to renegotiate the agreement. Accordingly, the Kiev administration is trying to include the issue of Ukraine's membership in NATO within the terms of the agreement. This is because Ukraine's intention in this direction is not welcomed by Trump.

Unlike Trump, the Ukrainian side associates its desire to renegotiate the agreement with the European Union. In this direction, Volodymyr Zelenskiy recently emphasised that Ukraine would not accept a minerals agreement that would jeopardise its accession to the European Union. In fact, Ukrainian Foreign Minister Andrii Sybiha's statement that the country would never accept anything that would weaken it reinforces Kiev's intentions. Moreover, these comments follow Washington's latest minerals offer to Kiev.

Although the agreement has been presented to the Kiev administration, it is obvious that some discussions will continue. So much so that, according to the Ukrainian media, Zelensky's statement that the final draft of the agreement contains ‘many new provisions that have not been discussed before’ and ‘some aspects that both sides reject’ supports this idea. Accordingly, it is possible to state that the coming days will be eventful.