US and
Ukraine sign minerals deal that solidifies investment in Kyiv’s defense against
Russia
Move seals a
deal to create a fund the Trump administration says will begin to repay roughly
$175bn provided to Ukraine
Andrew Roth
in Washington
Thu 1 May
2025 05.35 BST
https://www.theguardian.com/us-news/2025/apr/30/us-ukraine-minerals-deal-russia
The US and
Kyiv have signed an agreement to share profits and royalties from the future
sale of Ukrainian minerals and rare earths, sealing a deal that Donald Trump
has said will provide an economic incentive for the US to continue to invest in
Ukraine’s defense and its reconstruction after he brokers a peace deal with
Russia.
The minerals
deal, which has been the subject of tense negotiations for months and nearly
fell through hours before it was signed, will establish a US-Ukraine
Reconstruction Investment Fund that the Trump administration has said will
begin to repay an estimated $175bn in aid provided to Ukraine since the
beginning of the war.
“This
agreement signals clearly to Russia that the Trump administration is committed
to a peace process centered on a free, sovereign, and prosperous Ukraine over
the long term,” said Scott Bessent, the US treasury secretary, in a statement.
“President
Trump envisioned this partnership between the American people and the Ukrainian
people to show both sides’ commitment to lasting peace and prosperity in
Ukraine. 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.”
Ukraine’s
first deputy prime minister, Yulia Svyrydenko, confirmed in a social media post
that she had signed the agreement on Wednesday. “Together with the United
States, we are creating the fund that will attract global investment into our
country,” she wrote. The deal still needs to be approved by Ukraine’s
parliament.
Ukrainian
officials have divulged details of the agreement which they portrayed as
equitable and allowing Ukraine to maintain control over its natural resources.
The
Ukrainian prime minister, Denys Shmyhal, said that the fund would be split
50-50 with between the US and Ukraine and give each side equal voting rights.
Ukraine
would retain “full control over its mineral resources, infrastructure and
natural resources,” he said, and would relate only to new investments, meaning
that the deal would not provide for any debt obligations against Ukraine, a key
concern for Kyiv. The deal would ensure revenue by establishing contracts on a
“take-or-pay” basis, Shmyhal added.
Shmyhal on
Wednesday described the deal as “truly a good, equal and beneficial
international agreement on joint investments in the development and recovery of
Ukraine”.
Critics of
the deal had said the White House is seeking to take advantage of Ukraine by
linking future aid to the embattled nation to a giveaway of the revenues from
its resources. The final terms were far less onerous for Ukraine than those
proposed initially by Bessent in February, which included a clause that the US
would control 100% of the revenues from the fund.
On Wednesday
Trump said a US presence on the ground would benefit Ukraine. “The American
presence will, I think, keep a lot of bad actors out of the country or
certainly out of the area where we’re doing the digging,” he said at a cabinet
meeting.
Speaking at
a town hall with NewsNation after the deal had been signed, Trump said he told
Ukrainian president Volodymyr Zelenskyy during a recent meeting at the Vatican
that signing the deal would be a “very good thing” because “Russia is much
bigger and much stronger”.
Asked
whether the minerals deal was going to “inhibit” Russian president Vladimir
Putin, Trump said “well, it could.”
UK foreign
secretary David Lammy welcomed the agreement in a post on X, adding that “the
UK’s support for Ukraine remains steadfast”.
It was
unclear up until the last moment whether the US and Ukraine would manage to
sign the deal, with Washington reportedly pressuring Ukraine to sign additional
agreements, including on the structure of the investment fund, or to “go back
home”. That followed months of strained negotiations during which the US
regularly delivered last-minute ultimatums while cutting off aid and other
support for Ukraine in its defence against Russia.
Ukraine’s
prime minister earlier had said he expected the country to sign the minerals
deal with the US in “the next 24 hours” but reports emerged that Washington was
insisting Kyiv sign three deals in total.
The
Financial Times said Bessent’s team had told Svyrydenko, who was reportedly en
route to Washington DC, to “be ready to sign all agreements, or go back home”.
Bessent
later said the US was ready to sign though Ukraine had made some last-minute
changes.
Reuters
reported that Ukraine believed the two supplementary agreements – reportedly on
an investment fund and a technical document – required more work.
The idea
behind the deal was originally proposed by Ukraine, looking for ways to offer
economic opportunities that might entice Trump to back the country. But Kyiv
was blindsided in January when Trump’s team delivered a document that would
essentially involve handing over the country’s mineral wealth with little by
way of return.
Since then,
there have been various attempts to revise and revisit the terms of the deal,
as well as a planned signing ceremony that was aborted after a disastrous
meeting between Trump and Zelenskyy at the White House in February.
Earlier this
month, it was revealed that the Ukrainian justice ministry had hired US law
firm Hogan Lovells to advise on the negotiations over the deal, according to
filings with the US Foreign Agents Registration Act registry.
In a post on
Facebook, Ukraine’s first deputy prime minister Yulia Svyrydenko gave further
details of the fund, which she said would “attract global investment”.
She
confirmed that Ukraine would retain full ownership of resources “on our
territory and in territorial waters belong to Ukraine”. “It is the Ukrainian
state that determines where and what to extract,” she said.
There would
be no changes to ownership of state-owned companies, she said, “they will
continue to belong to Ukraine”. That included companies such as Ukrnafta,
Ukraine’s largest oil producer, and nuclear energy producer Energoatom.
Income would
come from new licences for critical materials and oil and gas projects, not
from projects which had already begun, she said.
Income and
contributions to the fund would not be taxed in the US or Ukraine, she said,
“to make investments yield the greatest results” and technology transfer and
development were a “key” part of the agreement.
Washington
would contribute to the fund, she said. “In addition to direct financial
contributions, it may also provide new assistance – for example air defense
systems for Ukraine,” she said. Washington did not directly address that
suggestion.
Ukraine
holds some 5% of the world’s mineral resources and rare earths, according to
various estimates. But work has not yet started on tapping many of the
resources and many sites are in territory now controlled by Russian forces.
Razom for
Ukraine, a US nonprofit that provides medical and humanitarian aid to Ukraine
and advocates for US assistance, welcomed the deal, and encouraged the Trump
administration to increase pressure on Vladimir Putin to end the invasion.
“We
encourage the Trump administration to build on the momentum of this economic
agreement by forcing Putin to the table through sanctions, seizing Russia’s
state assets to aid Ukraine, and giving Ukraine the tools it needs to defend
itself,” Mykola Murskyj, director of advocacy for Razom, said in a statement.
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