Washington/Beijing: The US and Ukraine signed a historic mineral agreement, under which Ukraine will give its rare mineral (Ree) resources to the US. American Treasury Secretary Scott Besent called it ‘a step’ towards peace and prosperity, while Ukraine’s Prime Minister Dennis Schmigal described it as ‘equal and beneficial’. Donald Trump wanted to do this deal only after coming to power. He said that Ukraine has been given billions of dollars weapons to the US, instead of which Ukraine should do this deal. However, China is the real reason behind this deal. Because it is occupied by rare minerals in the world.
China occupies rare minerals
Rare minerals, such as lanthaneum, seryum, neodimium, and dysproosium, are the backbone of modern technology, defense, and clean energy industries. These are used in mineral smartphones, electric vehicle batteries, wind turbines, missile systems, and laser techniques. China has almost monopoly on the supply chain of these minerals globally.
According to the 2024 report, China mines 60-70% ree in the world and controls 85-92% refining. Heavy ree, such as dysproosium and turbium, have 100% control in processing. In addition, China produces a 90% Ree-based permanent magnet ie magnets, which are important for defense and automotive industries.
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China controls 70–80% of global ree exports. The US imports 70% of its needs and Japan 50-60% from China. The import of raw minerals from countries like Myanmar also eventually goes for refining in China. China has controlled not only in its country but also abroad mines. China also affects mining through investment in Myanmar, Democratic Republic of Congo and Australia/South America.
Rare minerals as weapons
America’s deal with Ukraine was also compulsory because China has repeatedly used Ree as geopolitical weapons. China has been showing its strength in the global supply chain. An example of this was seen in 2010. Following a fishing dispute in the South China Sea, China temporarily stopped ree exports to Japan. This stirred up Japan’s automotive and electronics industries, and Japan had to start looking for alternative sources.
In the ongoing trade war between the US and China, China has made this situation more serious in Rare Earth Minerals. In April 2025, China implemented export restrictions on seven heavy ree (Samaryium, gadolinium, turbium, dysproosium, lutetium, scandium, and yatrium) and related magnets. These minerals are used in the US defense industry in F-47 fighter jets, missile systems, and laser techniques. This ban has increased the possibility of instability in the supply chain in American defense and automotive industries.
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Not only this, China imports minerals from abroad and storing them so that prices can be controlled. Given these forces of China, America has been forced to search for alternative sources for its defense, energy, and technical industries.
Deal compulsion or strategy from Ukraine?
Ukraine has 5 percent mineral resources in the world, including Europe’s largest lithium reserves, 20 percent graphite, and large reserves of titanium and manganese. These minerals are important for electric batteries, defense equipment, and renewable energy techniques. However, 53% of Ukraine’s mineral reserves are in the controlled areas of Russia, making this deal difficult. This deal was compulsory for Ukraine, because after Trump’s arrival, there is a fear that the supply of arms to Ukraine will stop.
Difficulties for America
This agreement is a strategic step for the US, but there are many challenges left. In fact, 20% of Ukraine area and 53% mineral reserves are under Russia’s control, causing mining activities to risky. Apart from this, America has limited indigenous refining capacity. There is a plan to develop new facilities by 2026-2027, but till then it will depend on China.