It may not have been the negotiating outcome Donald J. Trump had been banking on.
A key piece of a White House plan to get a ceasefire in the Russia-Ukraine War – a sweetheart deal obliging Kyiv to hand over hundreds of billions of dollars’ worth of mining rights to US big business in exchange for US arms sold at twice their list price – may have hit a snag on Monday when Ukrainian dealmakers found a more generous, Old-World suitor.
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A senior European Union official on Monday allegedly announced the world’s biggest trading bloc had placed a proposal on the table for the EU to help Ukraine develop “critical materials,” and that Brussels’ terms to Kyiv would be a lot better than Trump’s offer.
Stéphane Séjourné, Europe’s Commissioner for Industrial Strategy said, in comments reported by the news agency AFP, that a draft development agreement the EU handed over to Ukrainian officials on Monday would, unlike a US development proposal that has been under discussion for weeks, be fair to Ukraine.
“Twenty-one of the 30 critical materials Europe needs can be provided by Ukraine in a win-win partnership,” Séjourné said. “The added value Europe offers is that we will never demand a deal that’s not mutually beneficial.”
Death of Diplomacy
That said, according to Interfax-Ukraine, EU Commission spokesperson Thomas Regnier, denied that any new offer had been put forward.
“There is no proposal. Since 2021, the EU has partnership on critical raw materials with Ukraine, formalized through our memorandum of understanding. So, this dates back four years ago. As with all the EU critical raw materials partnerships that we have, this corporation is not only about securing supply chains for the EU, but also about fostering local value creation and capacity building in partner countries ensuring mutual benefits. Now, as you see, this is really here about cooperation with Ukraine and not about any sort of competition with the US,” Regnier said.
Ukrainian President Volodymyr Zelensky in comments to Kyiv media on Sunday said that a US-drafted mineral resource development proposal handed over to Kyiv on Feb. 14 was unacceptable because, among other terms, it called for total US corporate control of development and operations, with no revenue to be received by Ukraine until US investors had covered their costs and took a guaranteed profit.
The latest draft of a proposed US minerals’ development deal now under review by Kyiv calls for Ukraine to give up minerals, oil and gas revenues, plus earnings from ports and other infrastructure, the New York Times and other mainstream media reported over the weekend.
According to Ukrainian reports, at least two conditions in the US offer resembled punitive terms likely to be set forth by a victorious state to a defeated enemy: Ukraine would hand over half of all its mineral rights to the US in perpetuity, and any US weapons purchased by Ukraine from mineral development proceeds, would be sold to Kyiv at twice list price.
Zelensky confirmed in weekend comments that Washington had proposed selling Ukraine US weapons at double the price paid by US allies Israel and Saudi Arabia.
Britain’s Daily Telegraph citing review of a draft copy of the US pitch on Feb. 19 said: “If this draft were accepted, Trump’s demands would amount to a higher share of Ukrainian GDP than reparations imposed on Germany at the Versailles Treaty… (and it lets) Russia off the hook entirely.”
Following Séjourné’s alleged declaration that Ukraine would get better terms from Brussels than Washington, information about the European offer to develop Ukraine’s mineral resources were scarce. EU Regulations for regional development funds, a possible template for Europe’s investment into developing Ukrainian mineral resources, prioritizes funding to small and medium businesses, and high levels of ecological protection.
Ukraine’s Vice Prime Minister Olha Stefanishyn in a post on X on Monday seemed to say the US-Ukraine deal is still on track, saying: “Ukrainian and US teams are in the final stages of negotiations regarding the (US-Ukraine) minerals agreement. The negotiations have been very constructive with nearly all the key details finalized. We are committed to completing this swiftly.”
Trump, in comments made to White House reporters a few hours after Séjourné’s, declared EU interest in developing Ukrainian mineral resources instead of the US, said that the White House believes the US-Ukraine mining deal was “very close to a final phase.” He said that the signing ceremony might take place at the end of February or in the first week of March.
On Feb. 12, US Treasury Secretary Scott Bessent brought a draft agreement on access to Ukrainian minerals worth $500 billion in exchange for Washington’s assistance to Kyiv. The Zelensky administration sent the US a counteroffer on Feb. 14. The American counter-counter offer was received by Kyiv on Feb. 20, Ukrainian news reports said.
Major Ukrainian mineral resources that are relatively rare worldwide include manganese, titanium, graphite, and lithium as well as major reserves of iron ore, coal, coke, graphite titanium, and natural gas.
The Trump White House announced in February that it wanted the US to receive compensation for military and financial assistance given to Ukraine since Russia’s February 2022 invasion, and said the way to do that would be for Ukraine to sign over long-term mineral development rights to US corporations.
“We are asking for rare earths and oil, anything we can get,” Trump said on Saturday. He has falsely claimed the US has given Ukraine military and financial support worth $350 billion for which the US must receive recompense. Profit from the mining and ore-processing operations worth $500 billion would compensate America for past support to Kyiv and pay for future US arms transfers to Ukraine, Trump has said.
In fact, Ukraine has received about $100 billion in military assistance from the US to help resist Russian aggression, almost all of it on the terms of grants or long-term loans. Zelensky, in Sunday comments, said his government had no intention of paying back what the previous US administration transferred as a grant to Ukraine so it could defend itself.
“I will not sign something that 10 generations of Ukrainians will have to pay back,” Zelensky said.
According to research by the UN, about 5% of all the world’s ‘critical raw materials’ are in Ukraine. The state’s vast reserves of lithium, an important mineral for renewable energy sources like batteries for electric cars are thought to be particularly valuable for potential investors.
US Senator Lindsey Graham (R, SC) said during a November visit to Ukraine that the country has minerals worth between $2 and $7 trillion that US industry could profitably exploit, and that the incoming Trump administration could offer Ukraine a profitable development deal.
“We’ll be able to make money and have economic relations with Ukraine, which will be very beneficial to us when peace comes. So, Donald Trump is going to make a deal to make us rich in rare minerals. That’s a good deal for Ukraine and for us,” Graham said at the time.
Editor’s Note: This story was updated at 21:10 Kyiv time to reflect comments made by EU Commission spokesperson Thomas Regnier.
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