Putin’s “Budapest Memorandum” to Share Ukraine’s Rare-Earth Metal Resources with the United States

The metal’s strength-to-weight ratio and resistance to heat make it crucial for aerospace. For example, titanium is used in the F-35 Joint Strike Fighter’s bulkheads and engine parts to withstand the high temperatures generated during supersonic flight. The U.S. had to secretly source titanium from the Soviet Union to build the spy plane in the 1960s.

It’s essential that there is a key element in batteries, such as those in electric vehicles and other industrial products. Some of the reserves in Ukrainian are in areas which have been involved in war. Ukrainians had a suggestion to Musk that he invest in lithium mines.

Ukraine — described by the World Economic Forum as “a key potential supplier of rare earth metals” — is believed to hold about 5% of global rare-earth metal reserves, a group of 30 substances classified as “critical raw materials” by the European Union.

“It’s clear that Europe, Japan, and the United States are all dependent on China for rare earth elements,” Serhiy Vyzhva, director of the Institute of Geology at Taras Shevchenko National University of Kyiv, said in an interview.

Mr. Trump’s Treasury secretary, Scott Bessent, has argued that the existence of an American financial interest in Ukraine’s reserves of titanium, lithium, uranium and rare earth minerals is the best security guarantee that the country could have.

The United States would not provide security guarantees toUkraine in return for the sharing of the country’s mineral wealth, even if President Zelensky came to Washington to sign a framework agreement, President Trump told his cabinet on Wednesday.

Weak security agreements are familiar to the Ukrainians: In December 1994 they agreed to the “Budapest Memorandum,” in which they gave up their nuclear weapons — inherited from the old Soviet Union, and still controlled from Moscow — and the United States, Britain and Russia agreed “to respect the independence and sovereignty and the existing borders of Ukraine.”

Muggah co-authored a report for the Center for International Relations and Sustainable Development (CIRSD), a public policy think tank, which found that most of Ukraine’s mineral wealth is located in the “Ukrainian Shield,” spanning territories like Luhansk, Donetsk, Zaporizhzhya, and Dnipropetrovsk — regions that are largely under Russian control.

Nearly half of Ukraine’s power- generation capacity has been ruined by the war, according to the Center for Strategic and International Studies. The Mining sector is one of the most energy intensive industries, making it more difficult for companies to invest in it.

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China is the world’s largest producer of titanium, but Ukraine ranks among the top ten for proven reserves and accounts for 7% of global production. Russia, Canada, and Australia are some of the major suppliers. The U.S. mines relatively small quantities of titanium in Nevada, Utah and Virginia.

China dominates graphite production, accounting for over 75% of the global supply, and also holds the largest reserves. Ukraine, however, is thought to have one of the largest graphite deposits in the world, though its production is minimal, contributing just 0.5% of global output in 2020.

Nickel, a silvery-white metal used in alloys like stainless steel, is critical in battery and jet engine production. The Democratic Republic of Congo is home to the largest producer of the metalcobalt which is used in portable batteries.

Mr. Zelensky was the one who demanded the guarantees from Washington, the only nuclear-armed power really capable of standing up to Russia. Forced into a cease-fire, he discovers Russia is rebuilding its military, regrouping and trying to capture his country again.

He said in his first cabinet meeting that security guarantees won’t be much as he focused on Musk’s role in the administration. Europe is going to do that.

Mr. Trump had not spoken publicly about what role, if any, the United States would play in deterring Russia from one day restarting the conflict. He stood in silence on Monday when Emmanuel Macron, the president of France, repeatedly brought up the topic of security guarantees at a joint news conference at the White House.

Europe is concerned that Mr. Trump is trying to get a better relationship with Russia and has switched sides in the war. The prospect that Europe may find itself in the position of supporting Ukraine and continuing to isolate Russia, while Mr. Trump takes the opposite position, has rattled NATO allies and led the incoming German chancellor, Friedrich Merz, to declare that Germany must seek “independence from the U.S.A.”

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Mr. Bessent said last weekend that it was an economic security guarantee. He has been negotiating the minerals agreement with Mr. Zelensky and his aides.

European officials don’t agree on what a force might look like. The force’s purpose and shape can make a big difference.

The kind of force Mr. Trump talked about would be larger than Britain, France and Germany because of the need to defend NATO territory. Theobserver force could be much smaller than the 10,000 officials say it is, and it would simply observe violations and report them.

An even smaller force could be a “tripwire” that would bring in a larger response to any military moves by the Russians, but that only works if the United States and its allies are prepared to respond.