Quick Take
Summary is AI generated, newsroom reviewed.
The US and Ukraine signed an economic partnership to jointly exploit Ukraine’s energy and mineral resources. The deal includes an investment fund for Ukraine’s recovery from the war with Russia.
Washington:
After months of tense negotiations, the United States and Ukraine have signed an “economic partnership agreement” on the joint exploitation of Kyiv’s energy and mineral resources, which are vital for new technologies and largely untapped. The US will also establish an investment fund in Ukraine to spur its economic recovery from its war with Russia as part of the deal.
The minerals deal has been the subject of tense negotiations for months since US President Donald Trump returned to the White House in January, and nearly fell through hours before it was signed. US President Donald Trump had initially demanded rights to Ukraine’s mineral wealth as compensation for an estimated $175 billion in aid provided to Ukraine since the beginning of the war.
After initial hesitation, Ukraine accepted a minerals accord as a way to secure long-term investment by the United States, as Trump tries to drastically scale back US security commitments around the world. It marks a breakthrough in Washington-Kyiv ties after they nadired following a public showdown between Trump and Ukrainian President Volodymyr Zelensky during their meeting at the White House in February.
Announcing the signing of the deal in Washington, Treasury Secretary Scott Bessent says it shows “both sides’ commitment to lasting peace and prosperity in Ukraine.”
“This agreement signals clearly to Russia that the Trump administration is committed to a peace process centred on a free, sovereign and prosperous Ukraine over the long term,” Bessent said.
“And to be clear, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.”
The Treasury statement notably mentions Russia’s “full-scale invasion” of Ukraine – diverging from the Trump administration’s usual formulation of a “conflict” for which Kyiv bears a large degree of responsibility.
What’s Inside US US-Ukraine Mineral Deal
According to Ukrainian First Deputy Prime Minister Yulia Svyrydenko, the accord allowed Kyiv to “determine what and where to extract” and that its subsoil remains owned by Ukraine.
Ukraine is rich in natural resources, including rare earth metals, which are used in consumer electronics, electric vehicles and military applications, among others. Global rare-earth mining is currently dominated by China, which is locked in a trade war with the US after Trump’s sharp tariff increases. Ukraine also has large reserves of iron, uranium and natural gas.
Svyrydenko said Ukraine has no debt obligations to the United States under the agreement, a key point in the lengthy negotiations between the two countries.
The deal, she said, also complied with Ukraine’s constitution and Ukraine’s campaign to join the European Union, key elements in Ukraine’s negotiating position. It would ensure revenue by establishing contracts on a “take-or-pay” basis.
“Importantly, the Agreement sends a signal to global partners that long-term cooperation with Ukraine– over decades – is not only possible but reliable,” Svyrydenko said on X.
Ukraine Prime Minister Denys Shmygal said on national television that the agreement with US was “good, equal and beneficial.”
In a post on Telegram, Shmygal later stated that the two countries would establish a Reconstruction Investment Fund with each side having 50 per cent voting rights. “Ukraine retains full control over its subsoil, infrastructure and natural resources,” he said.
Meeting a key concern for Kyiv, he said Ukraine will not be asked to pay back any “debt” for the billions of dollars in US weapons and other support since Russia invaded in February 2022. “The fund’s profits will be reinvested exclusively in Ukraine,” he said.
It would ensure revenue by establishing contracts on a “take-or-pay” basis, he added.
Ukraine’s first deputy prime minister, Yulia Svyrydenko, stated that the agreement would make no changes to the ownership of state-owned companies, including nuclear energy producer Energoatom and Ukrnafta, Ukraine’s largest oil producer.
Moreover, the income and contributions to the fund would not be taxed in the US or Ukraine, she said, “to make investments yield the greatest results”.
Per an earlier Reuters Report, a draft of the US-Ukraine agreement showed Ukraine secured the removal of any requirement for it to pay back the US for past military assistance, something Kyiv had staunchly opposed.
The draft did not provide any concrete US security guarantees for Ukraine, one of its initial goals.
Russia-Ukraine Peace Deal
The minerals deal and US peace efforts have been negotiated separately but reflect Washington’s approach to Ukraine and Russia. Trump has upended US policy by softening the US stance toward Russia and sometimes even blaming Ukrainian President Volodymyr Zelensky for the war.
US peace proposals have called for recognition of Russia’s claim to Crimea, which it seized from Ukraine in 2014, and potentially four other Ukrainian regions. Zelenskiy has said Kyiv would never do so because it would contravene Ukraine’s constitution.
