Most commentators took the Trump talk of owning or getting rights to Ukraine’s minerals to be bluster. Yours truly remarked otherwise, that this looked like a way for Trump to justify and get funding for a continued US participation, even if at a lower level than under Biden, by presenting it as a loan. This would make it the bastard cousin of the Ursuala von der Leyen plan to issue bonds against Russian frozen assets to which it does not have good title.
But this approach would appeal to Trump by virtue of first, creating an option (options have financial value) and second, making possible Trump posturing about continuing the war seem dimly credible by providing a way to get funding through Congress. Even if the US and its Western allies can only dribble arms to Ukraine out of current production, more money would allow it to continue to prop up the regime in Kiev.
Today we have the Financial Times reporting, as its lead story, that Treasury Secretary Scott Bessant showed up in Kiev like a Mafia bagman, demanding that Ukraine pay bigly for protection. Note that even though the article, now the lead story in the Financial Times, is titled Ukraine rejects Trump bid to take rights to half its mineral reserves, the text indicates that Zelensky is being so pressured by the US that he is in more of a delaying operation. As you will see, he is trying to get Europeans in, if nothing else to dilute the US position and give him the possibility of playing one party off against the other. We pointed out earlier that Zelensky’s survival skills have been underestimated. From the pink paper:
Ukrainian President Volodymyr Zelenskyy has rejected a US proposal to take ownership of around 50 per cent of the rights to his country’s rare earth minerals and is trying to negotiate a better deal, according to several people familiar with the matter.
US Treasury Secretary Scott Bessent offered Zelenskyy the deal during a visit to Kyiv on Wednesday, which came after Trump suggested the US was owed half a trillion dollars’ worth of Ukraine’s resources in exchange for its assistance to the war-torn country.
Zelenskyy wants American and European security guarantees to be tied directly to any deal on the mineral reserves, according to three people familiar with the US-Ukraine negotiations….
Speaking to reporters before he and Zelenskyy discussed the deal privately for roughly an hour, Bessent described it as an “economic agreement” with Kyiv to “further intertwine our economies”.
The Trump administration would “stand to the end [with Kyiv] by increasing our economic commitment” which would “provide a long-term security shield for all Ukrainians” once Russia’s war is over, Bessent said.
“When we looked at the details there was nothing there [about future US security guarantees],” another Ukrainian official told the FT….
Bessent argued that the mere presence of Americans securing the mineral deposits’ sites would be enough to deter Moscow….
Zelenskyy has not signed the deal because he wants to get others, including European nations, involved in mining the minerals too, a European official briefed on the meetings said.
“They’re under intense pressure from the Americans on this,” the official said.
Let us put aside the fact that these deposits are almost certainly in most cases owned by private parties, and not either under government land or mineral rights retained by the government when land was sold. So this scheme could generate fierce litigation over Ukraine expropriating property without giving adequate compensation to its owners.
Any scheme like this would throw a wrecking ball into a settlement with Russia. As many commentators have pointed out, a significant portion of the high value minerals are in land already under Russian control, such as two of the four lithium deposits. And from the gnashing of teeth when Russia recently took the secured the territory with one of them in it, I suspect the recent acquisition contains the largest deposit.
That is before getting to the fact that Russia now legally regards all of the four oblasts, Donetsk, Lugansk, Kherson and Zaropzhizhia, to be Russian. One assumes the land Russia has not yet occupied and cleared contains additional natural resources wealth.
So what happens if Zelensky does sign an improved version of the Bessant deal, with or without European participation? Trump will insist the US has ownership and mining rights in the four oblasts that Russia regards as Russia. Russia will insist that it has maintained that Zelensky is not the legitimate leader of Ukraine and so any agreement he signs is legally void. The US will say, too bad, so sad, we get our mineral rights or no peace deal.
As I have been pointing out, despite all the Russia fanboys saying that Ukraine has lost the war, that is not correct. Even though Ukraine seems doomed and looks to be bleeding out, it is still standing.
And as lawyers are wont to say, possession is 9/10th of the law. The Ukraine government still controls most of Ukraine. Russia has not gotten to the point that Clausewitz depicts as the end state: destroying the enemy’s fighting forces and being able to get the enemy to do their will.
Now this harebrained scheme may go the way of Trump’s ethnic cleansing disguised as luxury development in Gaza plans. But Trump is still, despite rejection and condemnation, still trying to move that program forward. Having Bessant show up to try to bully Zelensky is a show of seriousness.
The Europeans would be likely to conspire with the US to get Zelensky to hock his country’s resources if it would really keep the US in the game. Given the rough treatment by Hegseth and J.D. Vance at the Munich Security Conference, the sane assessment would be to doubt that. But the desperate grasp at any hope.
The simple point here is that if I can see how a minerals deal would fatally complicate any US exit from Project Ukraine, the Russians are sure to be way ahead of me on what this could mean. Even if the US would not be inclined to deal in bad faith, or alternatively demand what the Russians would see as unreasonably high concessions, it introduces another big hairy mess into what already was set to be difficult to consummate. It further suggests that the US is ambivalent about walking away from a lost cause. Both elements further reduce the already low odds for a negotiated settlement.
