There's a lot of skepticism about the Ukraine minerals deal
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It'll be a long, uncertain road from Friday's signing of the U.S.-Ukraine minerals deal to development of resources and revenue that President Trump covets.
The big picture: The pact would create a joint reconstruction fund, partly used to reinvest in Ukrainian minerals, energy and infrastructure projects.
- Specifics of the U.S. stake and logistics remain to be ironed out.
Driving the news: Ukraine has deposits of graphite, lithium, rare earths, uranium, and more.
- The country's geological survey and resource ministry estimates, for instance, that it includes 6% of global graphite reserves.
Reality check: New projects have long, sometimes multidecade development timelines, even in countries that have not lost crucial infrastructure. Other hurdles in Ukraine include:
Knowledge gaps. Resources estimates are incomplete and often quite old for some commodities, analysts say.
- "[T]here is very limited data on whether Ukraine's rare earth elements and other strategic materials are commercially viable to mine," Center for Strategic and International Studies scholars write in a primer.
Security risks could impede development. Private firms will likely be wary unless they're confident that risks are tolerable.
- Up to 40% of Ukraine's overall critical mineral deposits are in areas currently under Russian occupation, Benchmark Minerals Intelligence analyst George Ingall tells the WSJ.
Extraction is just one piece of the puzzle. Access to raw materials doesn't fully achieve resource security goals when China still dominates processing and refining.
- "For a deal to really de-risk the US minerals supply chain, more infrastructure is likely needed to ensure that the newly acquired mineral ores don't flow toward Beijing," Reed Blakemore of the Atlantic Council's Global Energy Center said in a post.
The bottom line: The deal could improve the icy Trump-Zelensky relationship and bolster the U.S. interest in a peaceful Ukraine. But future development remains highly speculative.
