Trump’s Raw Materials Deal: «Mafia-like» or a Relief for Ukraine?
The day after the US raw materials deal with Ukraine, the world is trying to figure out what Donald Trump’s quid pro quo – support in exchange for mineral resources – exactly entails. What does Ukraine get and how much money is involved?
No hard security guarantees, but a ‘durable partnership’. That is what the US government has promised Ukraine, in exchange for giving away up to half of Ukraine’s mineral wealth, according to the now leaked draft agreement that Ukraine and the US concluded on Tuesday. In that agreement, the Trump administration expresses the desire to ‘invest in a free, sovereign and secure Ukraine’. Trump and Ukrainian President Volodymyr Zelensky will sign the agreement in Washington on Friday, the US president said on Wednesday.
Deleted from the text are some of the harshest US demands that Zelensky protested against in the past week. For example, the previous condition that Ukraine would have to pay back two dollars for every dollar in American military aid – an interest rate, as Zelensky subtly noted, of 100 percent – no longer applies.
Also, at least on paper, Trump’s condition that Ukraine pay the US ‘the equivalent of 500 billion dollars in rare earth metals’, as he previously demanded, seems to have been taken off the table. However, in response to the agreement, the American president himself on Tuesday continued to talk about total proceeds of as much as one trillion dollars. Apparently, this still amounts to the 500 billion dollars he dreamed of for the US, and the same amount for Ukraine, even though geologists called such amounts ‘completely unfounded’ in the Volkskrant on Tuesday.
«It could be a trillion-dollar deal, it could be anything, but it’s rare earths and other things,» Trump said in the Oval Office on Tuesday.
These revenues would come from a joint fund into which Ukraine promises to deposit half of its mining revenues, the deal states. This includes not only metals, but also natural gas and oil. It excludes fossil fuels that Ukraine’s main oil and gas producers, Ukrnafta and Naftogaz, are already extracting.
Rare earths
While it is highly doubtful that the Americans will be able to mine many of the rare earth metals Trump wants in Ukraine — which are crucial for military weapons and the energy transition — Ukraine’s soil does contain other metals that could prove profitable, according to Volodymyr Landa, chief economist at the Ukrainian Center for Economic Strategy.
«For example, before the Russian invasion, Ukraine accounted for 6 to 7 percent of the global production of titanium, a metal that is widely used in aerospace. So I suspect that Elon Musk, as the boss of SpaceX, will be interested in this Ukrainian mineral resource. After Germany, Ukraine also has Europe’s largest lithium reserve, although in global comparison it is nevertheless quite small, and no lithium has been mined in Ukraine so far».
«Very optimistic», is how Landa describes the amount of 500 billion dollars mentioned by Trump. «Although: if the Americans are also interested in Ukrainian iron ore and coal, then we might be able to move in that direction in the long term. At the moment, roughly half of our iron ore and coal are located outside the Russian-occupied area».
Bitter aftertaste
All in all, the agreement leaves a bitter aftertaste, says Leiden professor of war studies Frans Osinga. «It shows a fairly immoral, mafia-like way of negotiating». Osinga, for example, criticizes the fact that Trump, when asked on Tuesday what the Ukrainians get in return for their raw materials, replied: «The right to continue fighting».
«That is nonsense: every country has the right to defend itself, that is not a right that Trump can give or take away from another state». Trump’s argument that the Ukrainian raw materials serve to repay the Americans for their military support is also in bad faith, Osinga believes.
«A large part of this tax money ended up in the American treasury, because it was spent on orders for the American military industry».
Nevertheless, Landa is somewhat relieved. «In the previous draft agreements, it seemed like Ukraine had started a war against the US and now had to pay reparations to the Americans, so draconian were the conditions. But the current agreement contains hardly any concrete demands or obligations. Moreover, the more American companies are active in Ukraine, the more Americans have a stake in peace in our country, and the riskier it becomes for Russia to continue its military aggression».
Source: De Volkskrant.
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