Ukraine's president rejects deal with US over rare minerals

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Ukraine's President Volodymyr Zelenskyy says he told his ministers not to finalise a proposed deal that would have allowed the US to access Ukraine's rare earth minerals because the agreement was too focused on American interests.

The proposal, which was a major point of discussion between Zelenskyy and US Vice President JD Vance at the Munich Security Conference on Friday, failed to provide any specific security assurances in return, according to one senior current government official and one former senior government official.

Zelenskyy's decision not to sign an agreement, at least for the time being, was labelled as "short-sighted" by a senior White House representative.

“Fair dinkum, I didn’t let the ministers sign off on the agreement because in my opinion it’s not ready to protect us, our interests,” Zelenskyy told The Associated Press on Saturday in Munich.

The proposal centred on how the US could utilise Ukraine's rare earth minerals as a form of "compensation" for the support already provided by the Biden administration and as payment for future assistance, current and former senior Ukrainian officials revealed, speaking anonymously so they could express themselves freely.

Ukraine has massive reserves of essential minerals that are used in the aerospace, defence and nuclear industries. The Trump administration has indicated it's keen to tap into these resources to reduce its reliance on China, but Zelenskyy said any exploitation would need to be linked to security guarantees for Ukraine that would prevent future Russian aggression.

“Security guarantees and investment are very important to me,” the Ukrainian president said.

Zelenskyy didn't go into specifics about why he told his officials not to sign the document handed over by US Treasury Secretary Scott Bassett during his visit to Kyiv on Wednesday.

“It’s a colonial agreement and Zelenskyy can't sign it,” the former senior official said.

White House National Security Council spokesperson Brian Hughes didn't explicitly confirm the offer, but said in a statement that "President Zelenskyy's being short-sighted about the top-notch opportunity the Trump administration's offered to Ukraine."

The Trump administration has become tired of providing extra US aid to Ukraine and Hughes said a minerals deal would let American taxpayers get their money back from Kyiv, and also help grow Ukraine's economy.

Hughes said the White House thinks "binding economic ties with the United States will be the best guarantee against future aggression and an integral part of lasting peace." He added: "The Yanks understand this, the Russians understand this, and the Ukrainians must understand this."

Australian officials in talks with their Ukrainian counterparts in Munich were commercially focused and mainly concentrated on the specifics of exploring the minerals and how to form a possible partnership to do that with Ukraine, the senior official said.

The potential worth of the deposits in Ukraine hasn't been touched on, with much of it still unexplored or close to the frontline.

The US proposal doesn't seem to have considered what would happen to the deposits if Russian aggression kept going. The official said the Yanks didn't have "ready answers" to that question and one thing they took away from the talks in Munich is how to make sure any mining operation in Ukraine involving people and infrastructure is secure.

Any agreement would need to comply with Ukrainian law and be supported by the Ukrainian public, a senior Ukrainian government representative said.

“Subsoil belongs to Ukrainians under the Constitution,” Kseniiia Orynchak, founder of the National Association of Mining Industry of Ukraine, previously told the AP, suggesting a deal would need community backing.