Ukraine and the United States have settled on a draft agreement on minerals. It reportedly establishes a framework for American companies to extract billions of dollars in Ukrainian natural resource revenue. 

What are rare earth minerals, and why are they significant?

They are a set of seventeen metallic elements essential for putting together devices like TVs, mobile phones, computers, precision instruments and electric vehicles.

These metals are also indispensable for certain defence applications like lasers and sonar systems.

Only a small amount of metal may be required in any device, but their special properties mean each piece of equipment would be unable to function without their inclusion.

Within the Earth's crust, these elements are not actually uniquely rare in that sense. But they are costly to extract.

Which rare earth minerals does Ukraine possess?

Data on the quantities and precise locations of each element is classified, something the European Business Association is lobbying against on the basis that it harms investment.

Still, it is known that Ukraine doesn't make the global top 15 in terms of countries with the most sizeable rare earth reserves.

What Kyiv does have, however, is around two-thirds of minerals classified by the European Union as "critical".

These include the rare earth metals, along with graphite, lithium, titanium and other precious metals. The latter group may in fact be more significant to investors, as they are needed in much greater quantities than rare earths.

For example, Ukraine has 20 per cent of the world’s graphite supply. The mineral form of carbon is important for making pencils - and essential for nuclear reactors.

Ukraine also holds one-third of Europe’s reserves of lithium, an element that's key to electric vehicle batteries.

Why is Trump so interested?

When it comes to rare earth minerals, China holds the vast majority.

And so at a time of continued superpower tensions, the natural resources held by Ukraine are essential for US advanced manufacturing and defence technology.

President Donald Trump sees the deal as a way to recoup money which the previous US administration spent on military and economic aid to Ukraine, with "no strings attached".

What details do we have on the deal?

In its draft form, it reportedly does not offer any explicit security guarantees to Ukraine. Nor does it commit the US to providing any additional military aid.

US Treasury Secretary Scott Bessent has said the guarantees are  implicit rather than specific.

The implied logic? That with so much money for American businesses to gain from extracting Ukrainian minerals, the US will be incentivised to keep helping create conditions for a "stable and economically prosperous" Kyiv which is "free, sovereign, secure".

What does it mean for US-Ukraine relations?

The deal in its proposed form seems to commit both parties to very little, albeit with details to come later.

What it does suggest is that Ukraine cannot bank on the promise of new military equipment or security assurances.

Analysts are also sceptical the deal on its own will encourage American businesses to start a years-long process of setting up operations in Ukraine.

Still, signing it now will smooth over a rift caused by the US' initial maximalist demand.

It will also be sellable as a win by Trump to his domestic base.

And it could be a starting point for a long-term US commitment to Ukraine – one based less on principles of international law or the rules-based order, and more on hard economic logic.

That's after all more familiar territory for the businessman.