Russian President Vladimir Putin appears to be trying to neutralize Ukraine’s "trump card"—its mineral resources—by offering the U.S. a competing deal to extract rare earth minerals from Russia instead.
On February 24, Putin met with his top ministers and economic advisers to discuss Russia’s rare earth production, calling it a strategic reserve essential for economic growth and maintaining the country’s global competitiveness.
"Russia is one of the world leaders in rare earth metal reserves," Putin said in a televised interview the same evening, listing numerous mines from the north to the Far East of the country.
He then made a surprising announcement: Russia is willing to collaborate with foreign partners, including the U.S., on rare earth extraction.
A Notable Shift in Russia’s Resource Policy
Putin’s offer to cooperate on mineral extraction is an unusual move for the Kremlin, which has historically insisted on keeping Russia’s natural resources under domestic control, according to BBC analysis.
As recently as 2023, Putin accused the West—particularly the U.S.—of wanting to "break up" Russia to access its natural wealth.
Meanwhile, Trump has been aggressively pushing Ukraine to sign a $500 billion mineral deal to help repay U.S. aid since Russia’s invasion in February 2022. However, Ukrainian President Volodymyr Zelensky has resisted the demand, seeking to negotiate better terms with Washington.
Former UK Prime Minister Boris Johnson called a U.S.-Ukraine mineral deal "a grand prize," arguing that it would secure Trump’s commitment to a free, sovereign, and safe Ukraine.
Many analysts believe Putin’s mineral deal offer is a direct counter to a potential Washington-Kyiv agreement.
"By using minerals and rare earth resources as bait, Putin wants to strip Zelensky of his strongest leverage—or at the very least, force him to rush a deal with the U.S.," wrote Joakim Scheffer of Hungarian Conservative.
Trump’s Business Mindset: A Key Factor in Putin’s Strategy
According to U.S. media reports, Putin understands Trump’s preference for profit-driven diplomacy and deal-making.
Trump has also been shifting his foreign policy toward restoring ties with Russia—evident in his recent direct call with Putin to discuss Ukraine, excluding Kyiv and European allies.
On February 18, U.S. and Russian delegations met in Saudi Arabia, discussing economic cooperation, among other topics.
According to NBC News, senior Kremlin aides proposed a Russia-U.S. mineral deal during the Saudi meeting. While the Trump administration has not committed, it also has not dismissed the idea.
"Trump loves making deals, and Putin knows it," said a former U.S. diplomat familiar with the region. "The Kremlin sees Trump’s interest in Ukraine’s minerals and Zelensky’s hesitation as an opportunity."
Putin ‘Greenlights’ Rare Earth Deals with the U.S.
Trump previously hinted at a rare earth deal with Russia, and Putin is now signaling his willingness to proceed.
"We are ready to cooperate with American partners—not just the government, but also private companies—if they wish to be involved," Putin said after his meeting on rare earth production.
"We have significantly larger reserves—let me emphasize, significantly larger—than Ukraine," he added.
According to the U.S. Geological Survey (USGS), Russia holds the world’s fifth-largest rare earth reserves, trailing China, Brazil, India, and Australia.
Putin Dangles Even More Incentives for the U.S.
To further attract American interest, Putin hinted at mineral extraction opportunities in the four Ukrainian provinces annexed by Russia—Donetsk, Luhansk, Zaporizhzhia, and Kherson.
Ukrainian Economy Minister Yulia Svyrydenko estimates that these Russian-controlled areas contain $350 billion worth of untapped resources.
"Moscow’s proposal to Washington involves economic collaboration in annexed territories—just as the war appears to be winding down. If successful, this could help Russia solidify its control over these regions in any future peace agreement," U.S. officials told NBC News.
Russia also offered a separate deal on aluminum production in Siberia, suggesting it could supply up to 2 million tons of aluminum per year to the U.S. market.
The U.S. imports 50% of its aluminum demand, primarily from Canada, but previously sourced 15% from Russia before sanctions were imposed in 2023.
Russia remains the fourth-largest aluminum producer globally.
A Strategic Play to Weaken Western Unity?
If Trump finalizes a mineral co-ownership deal with Ukraine, he may reevaluate U.S. interests in Kyiv—potentially weakening Russia’s influence.
This could be a key reason why Putin is acting now, according to former U.S. diplomats.
Ukrainian Deputy Prime Minister Olga Stefanishyna confirmed on February 24 that Kyiv is in the final stages of negotiations with the U.S. on the mineral deal, with "almost all key details finalized."
On February 25, U.S. and Ukrainian officials formally agreed on the framework of the deal, eliminating "all unreasonable terms" for Kyiv.
Trump confirmed on February 25 that Zelensky will visit Washington on February 28 after both governments reached an agreement on the deal.
While Trump did not disclose details, Western media reports suggest the agreement allows the U.S. and Ukraine to co-extract mineral resources, with revenues managed through a newly established U.S.-Ukraine investment fund.
According to Financial Times, the final draft from February 24 outlines that Ukraine will contribute 50% of future revenues from state-owned mineral resources, including oil, gas, and logistics operations, to this fund, which will invest in projects within Ukraine.
A Battle of Business Interests
Analyst Scheffer noted that Trump is a transactional leader who bases decisions on what benefits the U.S. the most.
"The next few days will bring clarity as more details emerge about both Ukraine’s and Russia’s mineral offers," Scheffer added.
Putin’s Real Goal: Fracturing the West?
Some experts believe Putin’s main objective isn’t necessarily securing a U.S. deal—but rather deepening divisions within the West.
"Putin understands that Trump values the appearance of a ‘big deal’—whether it materializes or not," said Janis Kluge, a Russian economy expert at the German Institute for International and Security Affairs (SWP).
"This strategy will create deep fractures in the West," Kluge explained. "Putin sees elements in Trump’s leadership that he can exploit to weaken the transatlantic alliance."
(Sources: CNN, Reuters, Washington Post)
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