The US and Ukraine have signed a deal that will give Washington access to some of the war-torn country's natural resources. Months in the making, it sets up an investment fund that Ukraine hopes will cement US assistance as the country struggles to repel Russia three years after the invasion.
Ukrainian Prime Minister Denys Shmyhal announced that the agreement does not dictate that Ukraine repay any supposed "debt" to the US, a significant concession from President Trump, who had previously demanded that Ukraine pay back the $350 billion in aid that he claims has been provided during the conflict. Trump characterized the agreement as a win for the US, asserting that the country would get back "much more in theory" than the funds provided by his predecessor, Joe Biden.
The language used by the US in announcing the deal is notably harsher towards Russia than is typically seen from the Trump administration. The agreement explicitly refers to "Russia's full-scale invasion" and states that "no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine." This strong tone has been welcomed by Kyiv, which has been urging for increased pressure on Moscow in ongoing negotiations.
While much of the discussion around the deal has centered on Ukraine's mineral wealth, it also includes provisions for oil, natural gas, and other hydrocarbons. Crucially, all resources remain under Ukrainian ownership, even as the US gains joint access. The inclusion of oil and gas has been viewed as a softening of Ukraine's position, as these elements were absent in earlier drafts of the agreement. Senior administration officials believe that more value can be derived from these resources if fighting ceases quickly.
Concerns had been raised in Kyiv that the resources deal could hinder Ukraine's aspirations to join the European Union, especially since Kyiv and Brussels already have a strategic partnership on raw materials. However, the deal's text acknowledges Ukraine's intention to join the EU and states that it will not conflict with that goal. If Ukraine needs to adjust the terms of the deal due to "additional obligations" related to EU membership, the US has agreed to negotiate in good faith.
The US has framed this agreement as essential for Ukraine to continue receiving military assistance. Yulia Svyrydenko, Ukraine's First Deputy Prime Minister, mentioned that the deal envisions future contributions from the US, including air defense systems. However, it is important to note that there are no concrete security guarantees from the US, which has been a long-standing request from Ukraine and its European allies.
For the first decade of the reconstruction investment fund, profits will be "fully reinvested in Ukraine's economy," either in new projects or reconstruction. This could be significant, especially as it suggests that the US will not receive immediate financial benefits from the deal. Although this provision does not explicitly appear in the signed agreement, Svyrydenko indicated that these terms will be subject to further discussion.
US Treasury Secretary Scott Bessent described the deal as a signal to the American people that there is a chance to participate in Ukraine's success. He stated, "We have a chance to participate, get some of the funding and the weapons, compensation for those and be partners with the success of the Ukraine people." Deputy Chief of Staff Stephen Miller characterized the agreement as "repayment" to the US for the "hundreds of billions of dollars that our taxpayers suspect subsidised the war."
In the lead-up to the signing, negotiations were tense, with the US temporarily halting aid to Ukraine following a difficult Oval Office meeting. However, after a private discussion between Trump and Zelensky during the funeral of Pope Francis, the two leaders were able to reach an agreement. Ukrainian analysts noted that Kyiv had managed to secure more favorable terms than previously expected, despite Trump's claims that Ukraine had "no cards" to play.
While the deal has been framed as an equal partnership between Kyiv and Washington, it does not guarantee exclusive rights for the US to Ukraine's mineral resources. Instead, it provides preferential access to mineral extraction while allowing Ukraine to retain control over its subsoil and infrastructure. The agreement also stipulates that earnings from the deal will be tax-free and not subject to levies or duties by Ukraine.
Despite the optimism surrounding the deal, many details are still to be finalized, and a further technical agreement is expected to be signed soon. The overall impact of the agreement on contracts and operations may be limited as long as fighting continues between Ukraine and Russia. However, the Ukrainian government hopes that the signing will enhance goodwill towards Kyiv within the Trump administration.
As the war rages on, with reports of casualties continuing to rise, the deal represents a significant step for Ukraine in securing its economic future and maintaining its sovereignty. The agreement is seen as a vital signal to Russia that the US remains committed to supporting Ukraine in its efforts to resist aggression. The ongoing conflict has underscored the importance of Ukraine's rich mineral deposits, which are crucial for both economic growth and national security.
Materials such as graphite, lithium, uranium, and rare earth elements are essential for various technologies, including clean energy and defense systems. As the US seeks to diversify its sources of critical minerals, Ukraine's deposits have become increasingly important. With the deal now signed, all eyes will be on how it will be implemented and what it means for the future of US-Ukraine relations.
