Ukraine and the United States have reached an agreement on a major minerals deal, with Kyiv set to contribute 50% of future proceeds from state-owned mineral resources to a jointly owned fund.
A senior Ukrainian official has confirmed that Kyiv and Washington have reached an agreement on a major minerals deal. According to the official, the terms of the agreement include provisions for Ukraine’s critical minerals and other resources.
The Ukraine Minerals Deal refers to a series of agreements between the Ukrainian government and foreign companies regarding the extraction and export of mineral resources.
The deals aim to exploit Ukraine's rich mineral deposits, including iron ore, coal, and rare earth metals.
In 2020, Ukraine signed a major deal with China's Xinjiang Tianshan Geological Mineral Resources Development Bureau.
The agreement granted Chinese companies access to Ukraine's mineral reserves in exchange for significant investments in the country's infrastructure and economy.
The US had initially demanded a right to $500bn in potential revenue from utilizing Ukraine’s natural resources, but it is unclear whether this demand has been met. However, reports suggest that ‘much better’ terms have been agreed upon for Ukraine, according to Ukrainian officials.
Under the proposed agreement, Ukraine would contribute 50% of future proceeds from state-owned mineral resources, oil, and gas to a jointly owned fund. The fund would then invest in projects within Ukraine itself, aiming to rebuild the country’s infrastructure and economy.
US President Donald Trump has stated that he expects Ukrainian President Volodymyr Zelensky to sign the deal this week. However, ‘firm security guarantees’ from the US are a key demand of Kyiv, which remains unmet.
The controversy surrounding Donald Trump and Volodymyr Zelensky centers on a phone call between the two leaders in July 2019.
The conversation, which was later revealed through a whistleblower complaint, discussed US military aid to Ukraine and potential investigations into Democratic presidential candidate Joe Biden's son Hunter.
The call led to an impeachment inquiry against Trump, with some lawmakers accusing him of using his office for personal gain.
Zelensky denied any pressure from Trump during the call, stating that he felt 'comfortable' discussing the issue.
What Does This Deal Mean for Ukraine?
The agreement is seen as a positive development for Ukraine, which holds significant deposits of critical elements and minerals, including lithium, titanium, coal, gas, oil, and uranium. The country’s Deputy Prime Minister, ‘part of a bigger picture’ aimed at promoting co-operation between Kyiv and its former ally.
Ukraine is endowed with significant mineral resources, including iron ore, coal, manganese, and chromium.
The country has substantial reserves of titanium, uranium, and rare earth elements.
According to the World Bank, Ukraine's mineral wealth is estimated to be worth over $1 trillion.
The mining industry contributes significantly to Ukraine's economy, generating around 2% of its GDP.
The country's rich mineral deposits have attracted foreign investment, with many international companies operating in the sector.
The agreement also comes amid concerns in Ukraine and Europe that they might be excluded from any negotiations aimed at ending the war with Russia. With this deal, Ukraine hopes to secure a financial stake that would give the White House a reason to protect Ukraine if the conflict were to reignite after a ceasefire was signed.
A New Era in US Foreign Policy?
The minerals deal is seen as a significant development in US foreign policy under President Trump. The agreement marks a shift away from traditional aid and towards more self-interested cooperation, with the US seeking to recoup its investments in Ukraine through access to the country’s mineral wealth.
This approach has raised concerns among some that the US may be abandoning its traditional role as a global leader and instead prioritizing its own interests. However, others see this shift as a necessary response to changing global circumstances and a more assertive Russia under ‘Vladimir Putin‘.
