EXPLAINER: What is the minerals deal signed by Ukraine and the U.S.?

Ukraine and the United States on Wednesday signed a deal heavily promoted by U.S. President Donald Trump that will give the United States preferential access to new Ukrainian minerals deals and fund investment in Ukraine's reconstruction.

The deal comes after weeks of delays following a public spat between Trump and Ukrainian leader Volodymyr Zelenskyy in the White House

What do we know about the deal? 

What are rare earths and what are they used for?

Rare earths are a group of 17 metals used to make magnets that turn power into motion for electric vehicles, cell phones, missile systems, and other electronics. There are no viable substitutes.

The U.S. Geological Survey considers 50 minerals to be critical, including rare earths, nickel and lithium.

Critical minerals are essential for industries such as defense, high-tech appliances, aerospace and green energy.

What mineral resources does Ukraine have?

Ukraine has deposits of 22 of the 34 minerals identified by the European Union as critical, according to Ukrainian data. They include industrial and construction materials, ferro alloy, precious and non-ferrous metals, and some rare earth elements.

According to Ukraine's Institute of Geology, the country possesses rare earths such as lanthanum and cerium, used in TVs and lighting; neodymium, used in wind turbines and EV batteries; and erbium and yttrium, whose applications range from nuclear power to lasers. EU-funded research also indicates that Ukraine has scandium reserves. Detailed data is classified.

The World Economic Forum has said Ukraine is also a key potential supplier of lithium, beryllium, manganese, gallium, zirconium, graphite, apatite, fluorite and nickel.

The State Geological Service said Ukraine has one of Europe's largest confirmed reserves, estimated at 500,000 metric tons, of lithium - vital for batteries, ceramics, and glass.

The country has titanium reserves, mostly located in its northwestern and central regions, while lithium is found in the centre, east and southeast.

Ukraine's reserves of graphite, a key component in electric vehicle batteries and nuclear reactors, represent 20 percent of global resources. The deposits are in the center and west.

Ukraine also has significant coal reserves, though most are now under the control of Russia in occupied territory.

Why the deal?

Trump had demanded compensation for U.S. aid given to Ukraine under his predecessor Joe Biden's administration since February 2022.

The U.S. leader had sought $500 billion in compensation - around four times the amount that the United States has paid out to Ukraine, which currently stands at $120 billion, according to the Kiel Institute, a German economic research body.

Zelenskyy rejected that version of the deal, saying he would not sign an accord that "ten generations" of Ukrainians would have to pay off.

What do we know about the deal?

The two countries signed the accord in Washington after months of sometimes fraught negotiations, with uncertainty persisting until the last moment with word of an eleventh-hour snag.

The accord establishes a joint Reconstruction Investment Fund, with each side having equal voting rights. The fund's profits will be invested exclusively in Ukraine.

U.S. Treasury Secretary Scott Bessent and Ukrainian First Deputy Prime Minister Yulia Svyrydenko were shown signing the agreement in a photo posted on X by the Treasury, which said the deal "clearly signals the Trump Administration's commitment to a free, sovereign, prosperous Ukraine."

Svyrydenko wrote on X that the accord provides for Washington to contribute to the fund. She also said the accord provides for new assistance, for example air defense systems for Ukraine. The U.S. did not directly address that suggestion.

Svyrydenko said the accord allowed Ukraine to "determine what and where to extract" and that its subsoil remains owned by Ukraine.

Svyrydenko said Ukraine has no debt obligations to the United States under the agreement, a key point in the lengthy negotiations between the two countries. It also complied with Ukraine's constitution and Ukraine's campaign to join the European Union, she said.