Six Months Since the U.S.-Ukraine Minerals Deal Was Signed—What Now

Commentary by Gracelin Baskaran

Published October 30, 2025

Six months ago, the United States and Ukraine formalized the U.S.-Ukraine Reconstruction Investment Fund-often referred to as the "minerals deal." The agreement underscores the strategic alignment between Washington and Kyiv to rebuild Ukraine's mining base as a central pillar of its post-war economic recovery and long-term industrial resilience.

Ukraine's mining sector once served as the industrial backbone of the Soviet Union (USSR)'s defense complex. In the mid-1950s, Moscow recognized the growing strategic value of titanium-a metal essential for aircraft, missiles, and submarines-and sought to rapidly expand its use in military production. At the time, however, Soviet titanium capacity and technology were still nascent. By 1956, output stood at only 1,000 tons, barely a third of what was needed for a single titanium-hulled submarine, and domestic metallurgical methods could not yet achieve the purity and strength required for advanced defense applications. The Soviet Union also lacked the design and fabrication expertise to work titanium into precision weapon systems, a shortfall that proved especially limiting for submarine construction, where welding thick titanium plates for pressure hulls presented extraordinary technical challenges.

Throughout the late 1950s and 1960s, the USSR embarked on an ambitious effort to build industrial capacity and master titanium technology. Three major titanium-magnesium plants came online, including Zaporozh'ye (1956) in modern-day Ukraine. By the early 1960s, titanium was being incorporated into Soviet military aircraft, and by 1968, the USSR launched the world's first titanium-hulled combat submarine. Driven largely by military demand, the Soviet Union soon became the world's leading producer of titanium, accounting for roughly 70 percent of global output-an estimated 71,000 tons of titanium sponge in 1983-1984, more than five times the production of the United States. Ukraine's industrial heritage is deeply rooted in the Soviet Union's military-metallurgical complex, reflecting its longstanding importance as a hub of resource extraction, materials innovation, and strategic industrial capability.

Over the years, Ukraine's mining sector has gradually lost strategic priority-a trend reminiscent of the United States following the closure of its Bureau of Mines in 1996. As a result, the country now lacks a modern, comprehensive geological assessment. According to the former director general of the Ukrainian Geological Survey, Ukraine currently lacks a modern geological assessment. The existing data was compiled by the Soviet Union between 30 and 60 years ago, is based on outdated exploration techniques, and provides limited insight into today's commercial realities. Key factors that determine the economic viability of mining operations-such as deposit depth, ore grade, potential byproducts, and geographic accessibility-remain largely unverified for commodities like rare earths.

Following this year's minerals deal with the United States, the government of Ukraine reelevated the mining sector as a national priority. To modernize its geological mapping capabilities, through a partnership with the European Bank for Reconstruction and Development, Ukraine is already digitizing all Soviet-era geological archives, with 60,000 books, journals, and documents being scanned and structured into a single digital archive. To generate new data, Ukraine plans to restart core drilling in January 2026. Given limited funding, exploration will focus on ore occurrences-sites identified decades ago but not yet confirmed as commercially viable-targeting key minerals such as titanium, uranium, germanium, graphite, tungsten, vanadium, tantalum, and other critical materials.

Ukraine recently adopted the 2019 UN Framework Classification for Resources and Reserves, an international standard for assessing and reporting resource potential and recoverability. But because wartime conditions restrict advanced mapping methods like light detection and ranging, drilling will initially focus on areas with existing baseline data. Over the longer term, the government aims to develop a program modeled on the U.S. Geological Survey's Earth Mapping Resources Initiative and establish a state-of-the-art analytical laboratory to strengthen domestic testing capabilities and reduce dependence on foreign facilities.

The U.S.-Ukraine Reconstruction Fund serves as a proof of concept for a new model of strategic development finance. If the $150 million commitment from the U.S. and Ukrainian governments succeeds in mobilizing substantial private capital to help rebuild Ukraine's industrial base-particularly in sectors that also enhance U.S. and allied critical minerals security-it could establish a transformative precedent for how the United States approaches post-conflict recovery and economic statecraft. Beyond traditional aid, this initiative seeks to blend public resources with market-driven investment tools, demonstrating how targeted financing, risk-mitigation instruments, and strategic sector alignment can achieve both developmental impact and geopolitical resilience. In this sense, the fund could mark the beginning of a new paradigm, where U.S. development finance operates as an engine of reconstruction, security, and long-term economic partnership.

The U.S. International Development Finance Corporation (DFC)'s reauthorization, incorporated into the FY 2026 National Defense Authorization Act, was approved by the Senate on October 9, 2025, in a bipartisan 77-20 vote and now awaits consideration in the House. An added provision empowers the DFC to replicate the bilateral U.S.-Ukraine investment model, enabling the DFC to extend this innovative framework for strategic reconstruction and development financing to other key partner nations.

The successful realization of the minerals component of the U.S.-Ukraine Reconstruction Fund depends on three key factors: mobilizing private capital, identifying and launching strategic projects, and investing in the enabling infrastructure and policy architecture required to sustain them.

To mark the six-month anniversary of the U.S.-Ukraine "minerals deal," the CSIS Critical Minerals Security Program convened a Chatham House-style roundtable that brought together senior U.S. and Ukrainian government officials alongside private-sector leaders to explore new investment opportunities. The discussion assessed progress to date and examined practical measures to unlock capital flows, de-risk priority projects, and reintegrate Ukraine into global critical-mineral supply chains as part of its broader economic recovery. Drawing from the insights shared during the roundtable, the following policy and investment recommendations emerge.

1. Invest in reprocessing legacy mine tailings: From the 1950s until the early 1990s, Ukraine was one of the Soviet Union's largest uranium producers and processors. Over decades of activity, Ukraine has accumulated an estimated 300,000-400,000 tons of uranium tailings, which also contain 5-10 types of rare and specialty metals. For many years, these tailings were considered economically unviable. Today, however, that calculus has shifted. Advancements in metallurgical and extraction technologies have increased the commercial viability of reprocessing tailings. Additionally, as global ore grades continue to decline for a range of minerals, the metal content of tailings is becoming comparatively more attractive. Reprocessing these tailings offers a compelling advantage: There's no need to dig thousands of meters underground-just access to material that already sits above ground. With U.S. technology and investment, Ukraine's legacy waste sites could become viable sources of critical minerals.
2. Repurpose orphaned USAID funds: Following President Trump's Executive Order 14169 in 2025, the U.S. Agency for International Development (USAID) was dismantled, with its residual functions and funding absorbed into the Department of State as part of a broader review of foreign assistance programs. The administration subsequently terminated most USAID initiatives, citing misalignment with the administration's "America First" policy agenda. However, a portion of these unallocated or residual USAID funds could potentially be redirected to support strategic initiatives in Ukraine to enhance energy and minerals security. In particular, these funds should be utilized for immediate project development support. Determining the legal and procedural mechanisms to repurpose these dormant resources will be essential to ensuring that they are deployed effectively in advancing U.S. foreign policy and economic security objectives.
3. Align strategic capital market initiatives with U.S. government priorities in Ukraine: As the DFC advances investments in Ukraine, it could catalyze capital from efforts like JPMorgan Chase's newly launched Security and Resiliency Initiative-a 10-year, $1.5 trillion financing and investment program-designed to strengthen industries central to U.S. national and economic security. Within this framework, the bank will commit up to $10 billion in direct equity and venture-capital investments to strategically significant U.S. enterprises. Three of the initiative's four thematic pillars closely intersect with Ukraine's strategic potential and U.S. policy priorities. These include supply chain resilience and advanced manufacturing, encompassing critical minerals and materials processing; defense and aerospace, where Ukraine's titanium reserves and industrial base are vital to next-generation defense technologies; and energy independence and resilience, underpinned by Ukraine's substantial uranium resources. Aligning private-sector financing mechanisms with these priorities could create powerful synergies between U.S. strategic capital and Ukraine's industrial and resource strengths, advancing shared security and economic objectives. Financing should be conditioned on offtake to U.S. firms.
4. Invest in the logistical corridors that connect Ukraine's minerals to global markets: Rebuilding and modernizing Ukraine's transport infrastructure is essential to exporting minerals to industrial manufacturing hubs. The war has inflicted devastating losses, damaging more than 26,000 kilometers of roads and causing an estimated $38.5 billion in transportation infrastructure destruction. Meanwhile, the country's maritime arteries remain constricted, with hundreds of damaged ports, sharply reducing shipping capacity. Strategic investment in rail, road, and port corridors will be critical to restoring Ukraine's connectivity, revitalizing trade, and ensuring its mineral exports can flow efficiently to allied markets.
5. Invest in energy infrastructure: Rebuilding Ukraine's energy system is fundamental to its economic recovery and future industrial capacity. Between 2022 and 2023, Ukraine lost nearly half of its power generation capacity-much of it destroyed, damaged, or occupied by Russian forces-and roughly half of its major substations were struck by missiles and drones. As a result, the country now operates with only about one-third of its prewar electricity capacity. Restoring and expanding the energy grid will be essential before large-scale mineral exploration and production can begin, underscoring the critical link between energy security and Ukraine's broader economic recovery.

The U.S.-Ukraine "minerals deal" marks the beginning of a strategic shift in how Washington approaches post-conflict reconstruction-through investment rather than traditional aid. Six months in, Ukraine has made important strides in rebuilding its geological foundation and institutional frameworks, but realizing the fund's full potential will require mobilizing private capital, making strategic investments, and rebuilding infrastructure. If successful, this initiative could redefine U.S. development finance as a tool of economic statecraft-one that strengthens Ukraine's recovery, advances allied mineral security, and demonstrates the power of partnership in rebuilding a nation's industrial future.

Gracelin Baskaran is director of the Critical Minerals Security Program at the Center for Strategic and International Studies in Washington, D.C.

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