Russia on US-Ukraine deal for rare earth metals and power plants: Take them if you want

Russia's position on the US-Ukraine deal on minerals and power plants should not be neutral. It is important for Moscow to enter into this deal and even more so lead it.

Photo: commons.wikimedia.org by Ralf1969, https://creativecommons.org/licenses/by-sa/3.0/

Zaporizhzhia Nuclear Power Plant

US President Donald Trump suggested Ukraine could transfer ownership of Ukrainian power plants to the United States for their protection.

"American ownership of these facilities would provide the best protection for this infrastructure and support for Ukraine's entire energy system," stated National Security Advisor Mike Waltz and Secretary of State Marco Rubio in a joint statement.

US Energy Secretary Chris Wright has also said he sees no issue with the possible transfer of Ukraine's nuclear power plants under US control.

On Tuesday, March 18, The New York Times reported that Trump views control over the Zaporizhzhia Nuclear Power Plant (currently owned by Russia's Rosatom) as a key factor in the development of critical mineral extraction.

A Win-Win for US

"There appears to be active negotiations between Washington and Kyiv regarding the transfer of Ukrainian assets – ranging from mineral resources to infrastructure facilities like ports and power plants – into US ownership or joint management,” Igor Yushkov, an expert from the Financial University under the Russian Government, told Pravda.Ru.

According to Yushkov, the nuclear power plant deal most likely involves acquiring a stake at Energoatom, though he does not rule out the outright sale of Ukrainian nuclear power plants to US companies.

He believes this would be a win-win deal for the US, as Russian Aerospace Forces (VKS) have not targeted nuclear energy facilities or their associated infrastructure, such as substations and grid systems.

"They could then say, "See? We took control of the nuclear plants, and Russia isn't targeting them.' And the fact that Russia wasn't targeting them before could simply be ignored,” Yushkov explained.

Additionally, he noted that the US might also be interested in acquiring Ukraine's hydroelectric and thermal power plants, which could effectively shield them from potential Russian strikes.

Electricity Prices Will Rise

However, Yushkov emphasized that American companies would only profit from such a deal if they later increased electricity tariffs. Due to this, the US might not be interested in acquiring all power plants, as many energy units would need to be decommissioned or heavily modernized, which would result in significant expenses rather than profits.

Gas extraction enterprises could be Ukraine's most desirable asset that the US could have its hands on. Selling gas within Ukraine, especially at higher prices, could be highly lucrative for American companies.

Russia Won't Give Up Zaporizhzhia NPP but May Sell Electricity

According to Yushkov, Russia's current stance on these deals is essentially take them if you want. However, he believes it would be more advantageous to discuss these transactions within the framework of a Russia-Ukraine-US triangle, especially concerning the Zaporizhzhia Nuclear Power Plant.

Russia will not physically hand over or relinquish control of the plant, but it is willing to sell electricity to Ukraine, as it has a surplus.

"There could be an arrangement where the US is involved either as intermediaries, shareholders, or traders in a joint company managing the Zaporizhzhia nuclear plant,” Yushkov suggested.

If Ukraine transfers its gas or coal-powered power plants to the US, it may then become more inclined to purchase gas directly from Gazprom or coal from Donbas, subsequently selling the electricity to the European Union.

"These are just initial outlines of potential cooperation between Russia and the US," he concluded.

Details

On 4 March 2022, a military engagement took place between the Russian Armed Forces and the Armed Forces of Ukraine over the city of Enerhodar in Zaporizhzhia Oblast, on the southern front of the Russian invasion of Ukraine. Enerhodar is the location of the Zaporizhzhia Nuclear Power Plant, which generates nearly half of the country's electricity derived from nuclear power and more than a fifth of total electricity generated in Ukraine, as well as a nearby thermal power station. After attacking protesting civilians on March 3, Russian forces engaged Ukrainian forces at the nuclear power plant and took control of it, seizing Enerhodar the same day. On 28 February, the Russian Ministry of Defense announced that its forces had captured the city of Enerhodar and the Zaporizhzhia Nuclear Power Plant, though this was denied by the city's mayor, Dmytro Orlov and Energoatom, the Ukrainian state enterprise which operates the plant. Local citizens later barricaded the road to the plant and the entrance to the city, forcing the Russian forces to turn back.