The United States and Ukraine have recently entered into a significant agreement aimed at boosting Ukraine’s rare earth deposits. This move reflects the US’s strategy to gradually reduce military assistance to the war-affected nation.
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Notably, this deal comes on the heels of several weeks of negotiations marked by tensions between US President Donald Trump and Ukrainian President Volodymyr Zelensky.
Understanding the Agreement
Here’s what we know about this pivotal accord — which notably lacks any explicit security guarantees for Ukraine:
Why This Deal?
President Trump was notably seeking $500 billion in compensation, an amount approximately four times larger than the $120 billion that the US has already provided to Ukraine, as reported by the Kiel Institute, a leading German economic research organization.
President Zelensky rejected Trump’s proposal, asserting, “I will not sign an accord that ten generations of Ukrainians would have to pay off.”
Investment and Control
Ukraine has agreed to this minerals deal as a vital step towards securing long-term US investment, especially as President Trump has significantly curtailed US commitments to international security.
Despite hesitance in extending security guarantees to Ukraine and opposition to its NATO membership, President Trump stated that a US presence in Ukraine could prove beneficial.
Structure of the Investment
The agreement will establish a joint Reconstruction Investment Fund, where both nations will have equal voting rights. Profits from this fund will be exclusively dedicated to investments within Ukraine, and importantly, Ukraine will not be required to pay back any “debt” for the billions of dollars in US support following Russia’s invasion in February 2022.
Prime Minister Denys Shmyhal emphasized, “Ukraine will have full control over its subsoil, infrastructure, and natural resources.”
Project Focus
For the first decade, the fund will exclusively support mineral, oil, gas projects, and infrastructure development in Ukraine. After this period, profits may be shared between both partners.
Ukraine’s Economy Minister, Yulia Svyrydenko, remarked, “The transfer and development of technologies is an important component of the agreement, because we need not only investments but also innovations.” She further affirmed that this agreement would not hinder Ukraine’s aspirations for European Union integration.
Ukraine’s Resource Potential
Ukraine is estimated to possess about 5% of the world’s mineral resources and rare earth elements. Yet, many resource rich sites remain untapped, particularly those within areas currently under Russian control.
Moreover, Ukraine boasts approximately 20% of the world’s graphite — a critical component for electric batteries, as indicated by France’s Bureau of Geological and Mining Research. It is also a prominent producer of manganese and titanium and claims to harbor one of Europe’s largest untapped lithium deposits.
Investment of $300 million is estimated to be needed to develop the Novopoltavske deposit, purportedly one of the largest globally, where Ukraine indicates rare earth metals are known to exist in six different deposits.
The Importance of US Support
Ukraine insists that any agreement must encompass long-term, robust security guarantees to deter future Russian aggression. However, the published agreement text indicates that the only security clause imposes no obligation upon the US and lacks any mention of weapons support.
Instead, the US merely “supports Ukraine’s efforts to obtain the security assurances necessary to build a lasting peace.”
A significant statement from the US Treasury referenced Russia’s “full-scale invasion” of Ukraine, diverging from the Trump administration’s previous narrative of a “conflict” for which Ukraine holds substantial responsibility.
Treasury Secretary Scott Bessent articulated that this deal showcases “the US’s economic interest in Ukraine.” He added, “It’s a signal to the Russian leadership. It’s also a signal to the American people that we have a chance to participate, getting some of our funding and the weapons compensation for those,” speaking to Fox News.
Edited By Ali Musa
Axadle Times International – Monitoring.
