White House offers a revised mineral deal, but US-Ukraine relations still in limbo

The White House has offered Ukrainian President Volodymyr Zelenskiy a revised version of its deal to exploit rare earth minerals that Kyiv rejected last week because the terms were too harsh.

US President Donald Trump has been pushing for Bankova (Ukraine’s equivalent of the Kremlin) to sign off on the deal quickly that is reportedly worth $500bn as compensation for the money the US has spent on supporting Ukraine over the last three years. However, as reported by bne IntelliNews, the terms of the deal were so harsh that it has been described as reparations that are “worse than Versailles”, referring to the reparations that were imposed on Germany at the end of WWI.

Under the initial terms, 50% of revenue from mineral extraction would go to the US, and the agreement would be governed under New York law. Moreover, the US wants to have the right of first refusal on any new mining concessions offered to any other partner. Crucially, the agreement does not mention the need for a ceasefire in the current conflict to be in place, nor does it make any mention of a US security deal for Ukraine that Zelenskiy is insisting on.

Tensions soared following Bankova’s disappointment with the first draft. Zelenskiy responded saying “I will not sell Ukraine,” and a war of words erupted between the two presidents. Zelenskiy said Trump was in a Russian “disinformation bubble” and Trump in turn accused Zelenskiy of being a “dictator” and warned that he might “lose his country” if he didn’t act fast.

Tensions have been further stocked by the White House’s decision to exclude Europe from ceasefire negotiations that began in Riyadh on February 18. Bankova boycotted the first meeting, saying it would never agree to a deal with Russia that was imposed on it by other parties.

The revised minerals deal is an attempt to calm tensions and repair some of the damage done in recent days.

A US official and two sources with knowledge of the talks told Axios that in recent days negotiations had continued, with the US presenting Ukraine with an updated version that addressed some of Zelenskiy's concerns. Amongst the changes, the clause putting the jurisdiction of the deal under a New York court has been removed.

Zelenskiy met on February 20 in Kyiv with US envoy Keith Kellogg and discussed the minerals agreement, the battlefield situation, the return of prisoners of war and security guarantees for Ukraine as part of a future peace agreement. But tensions remain high and Zelenskiy and Kellogg forewent the traditional press conference after meeting at the White House’s insistence.

While the terms of the new agreement have not been released, it appears that there is still no mention of security guarantees for Ukraine, which will be a deal-breaker for Zelenskiy.

"Ukraine is ready for a strong, effective investment and security agreement with the President of the United States. We have proposed the fastest and most constructive way to achieve results. Our team is ready to work 24/7," he said, suggesting an agreement on security guarantees has not yet been reached.

Comments from US officials suggest that no security deals will be offered. US National security adviser Mike Waltz said that Zelenskiy needs to "come back to the table" on the minerals issue.

"We proposed to have the US co-invest with Ukraine in its economy and natural resources and become a partner in Ukraine's future. This is the best security guarantee they can hope for. More than another pallet of ammunition," Waltz said in an interview with CNN. "Why are we getting pushback and bad mouthing in the press? It's unacceptable. They need to tone it down. Take a hard look and sign this deal."

Trump reportedly demanded Zelenskiy sign the deal immediately, but Zelenskiy refused and said that any deal needs to win the approval of the Ukrainian Rada.

Ukraine possesses considerable mineral resources worth trillions of dollars, but there has been an argument over the amount of money the US has sent Kyiv over the last three years that this deal is supposed to compensate. Trump claimed variously that it is $300bn-$350bn, whereas Congress officially approved a total of $185bn, and Zelenskiy claims Ukraine has actually received just under $100bn, which is less than the $133bn received from Europe.

US Treasury Secretary Scott Bessent arrived in Kyiv last week with a draft agreement, just hours after the US ambassador had presented the proposal to Ukrainian officials.

“Scott Bessent actually went there and was treated rather rudely because essentially they told him ‘no,’” Trump told reporters on February 19, as cited by Axios. “He came back empty. They wouldn’t sign the document.”

A Ukrainian official confirmed that “there was significant improvement in the recent draft,” Axios adds, “and it is in conformity with Ukrainian law.” But Zelenskiy has still not signed off on the deal, leaving Ukraine-US relations in limbo.