Ukraine's Mineral Wealth to Fund U.S. Agreement Amid Ongoing Conflict

A draft agreement between Ukraine and the U.S. to manage mineral revenues has emerged, removing previously contentious clauses while Ukrainian officials seek security assurances amid ongoing conflict.

Ukraine has reached an agreement to allocate a portion of its mineral resource revenue to the United States, as confirmed by both American and Ukrainian officials on Tuesday, following a rigorous negotiation process spearheaded by President Trump. Here are the key points regarding the deal.

**Terms of the Agreement:** The specific financial obligations of Ukraine remain uncertain, but the draft discussed on Tuesday lacks the prior requirement of a $500 billion contribution to a U.S.-owned fund. Additionally, there’s no clause mandating Ukraine to repay double any future American assistance. The recent amendments have made the arrangement more palatable for Ukrainian representatives. According to this draft, Ukraine would provide half of its revenues from the extraction of natural resources such as critical minerals, oil, and gas. The U.S. is set to hold the maximum financial interest in the fund permitted by American law, although not necessarily all of it. The fund is intended to reinvest some revenues back into Ukraine.

**Security Guarantees:** Ukrainian President Zelensky has consistently sought security assurances from the United States corresponding to concessions about mineral rights, particularly with the ongoing war against Russia approaching its fourth year. However, draft agreements reviewed reveal a lack of commitments regarding security provisions as of now.

**Approval Process:** A finalized draft of the agreement has been forwarded to Ukrainian officials. The signing ceremony is expected to commence with Treasury Secretary Scott Bessent and his Ukrainian counterpart before Zelensky’s planned visit to Washington for a formal signing with President Trump.

**What's at Stake:** Ukraine houses over 100 substantial deposits of critical minerals, according to research by the Kyiv School of Economics, alongside moderate oil and natural gas reserves. Titanium, which is utilized in construction, aviation, and various industrial applications, constitutes about 6% of global production from Ukrainian mines. Furthermore, with a significant share of Europe’s lithium reserves, crucial for battery production, and the largest uranium stocks in Europe, Ukraine's untapped resources could play a pivotal role in global supply chains. Rare earth minerals, essential for advanced technology sectors, are also abundant in Ukraine, though extraction costs are still unclear.

Reporting by Constant Méheut, Andrew E. Kramer, Maria Varenikova, and Alan Rappeport has provided these insights amidst the ongoing Russia-Ukraine conflict.