The United States and Ukraine have reportedly reached a minerals deal, potentially strengthening ties amid ongoing conflict with Russia.
Top Takeaways
- Ukraine and the U.S. have agreed on a minerals deal for joint resource development.
- The deal establishes a fund where Ukraine contributes 50% of proceeds from future state-owned resource monetization.
- U.S. dropped demands for $500 billion in potential revenue rights.
- The agreement lacks explicit security guarantees but aims to improve U.S.-Ukraine relations.
- Ukraine’s parliament must approve the deal, with expected opposition debates.
Agreement Details and Negotiations
The United States and Ukraine have reached an agreement on a minerals deal, focusing on the joint development of Ukraine’s mineral resources, including oil and gas. This deal comes after extensive negotiations and revisions to the original draft, which Ukraine initially rejected due to what it considered onerous terms. The final agreement establishes a fund where Ukraine will contribute 50% of proceeds from future monetization of state-owned resources, a significant shift from earlier U.S. demands for rights to $500 billion in potential revenue.
Importantly, the deal excludes existing mineral activities that currently contribute to Ukraine’s government revenue. The agreement has received approval from Ukraine’s justice, economy, and foreign ministers, signaling a step forward in bilateral relations. However, it still requires approval from Ukraine’s parliament, where opposition MPs are expected to debate its terms.
Ukraine agrees US minerals deal after Washington drops toughest demands https://t.co/JD8g1sugNB
— Financial Times (@FT) February 25, 2025
Implications and Criticism
While the deal is seen as a way to strengthen U.S.-Ukraine relations, it has not been without criticism. Some have labeled it as “colonial” due to earlier U.S. demands for a 50% interest in resources and priority rights to purchase exported minerals. The negotiations began after Ukraine presented its natural resources to U.S. officials in 2024, aiming to appeal to potential business interests.
Ukraine claims to possess $12 trillion worth of minerals, though this figure is based on outdated Soviet-era estimates. The deal is viewed by some as compensation for U.S. wartime assistance to Ukraine amid Russia’s ongoing invasion. However, it’s important to note that the agreement is described as a “framework” with no immediate revenue changes, allowing time for further negotiations and adjustments.
Political Context and Future Steps
The minerals deal has garnered attention from high-level officials on both sides. There are indications that Ukrainian President Zelenskyy may visit the White House for a signing ceremony, underscoring the significance of this agreement. The White House press secretary has emphasized the importance of signing the deal, though specific updates on the timing remain unclear.
“The minerals agreement is only part of the picture. We have heard multiple times from the U.S. administration that it’s part of a bigger picture,” said Olha Stefanishyna, Ukraine’s deputy prime minister and justice minister who has led the negotiations.
It’s worth noting that Russian President Putin has mentioned extending a rare earth metals deal to Ukraine’s occupied regions, though the international community does not recognize Russia’s annexation of these areas. As the deal moves forward, it will likely face scrutiny from various stakeholders, including opposition members in Ukraine’s parliament and international observers monitoring the ongoing conflict and its economic implications.
