Ukraine Agrees on Minerals Deal With US

Ukrainian officials said that Kyiv is ready to sign an agreement with the US on developing its mineral resources – including oil and gas – after Washington dropped demands for the right to $500 billion in potential revenue from exploiting Ukraine’s resources.

Ukrainian President Volodymyr Zelensky could sign an agreement in Washington as early as Friday, AFP reported, citing a Ukrainian official. 

That said, the text lacks the explicit security guarantees that Kyiv had sought. However, according to the AFP’s source: “There is a general clause that says America will invest in a stable and prosperous sovereign Ukraine, that it works for a lasting peace, and that America supports efforts to guarantee security.”

Ukrainian officials argued that the terms were far more favorable than they were and keeping good ties with the Americans is highly important to Ukraine, which saw the three-year anniversary of Russia’s ongoing full-scale invasion on Monday.

“The minerals agreement is only part of the picture. We have heard multiple times from the US administration that it’s part of a bigger picture,” Olha Stefanishyna, Ukraine’s deputy prime minister and justice minister who led the US-Ukraine talks, told the Financial Times on Tuesday.

The original terms of the deal were reportedly highly exploitative – even worse than had been imposed on Germany at the end of World War I, according to some evaluations.

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The UK, as well as Baltic and Nordic nations are pushing for immediate action while France, Germany, and Italy are opposed.

US President Donald Trump had suggested the original deal would be a way for Ukraine to repay the US for military and financial aid it’s received since Russia’s full-scale invasion, although the US  had provided the aid to Ukraine in the form of grants and loans.  

Trump had previously asked for “$500 billion worth” of rare earth minerals to make up for aid given to Kyiv – a price tag Ukraine had balked at and which does not correspond with published US aid figures of around $60 billion.

When Zelensky initially rejected the US text last week, Trump called him a “dictator” on his social media network and appeared to blame Ukraine for Russia’s surprise invasion.

The final version of the agreement, dated Feb. 24 and seen by the FT, would establish a fund that Ukraine would contribute 50% of proceeds from the “future monetization” of state-owned mineral resources.

According to the FT, this fund would invest in projects in Ukraine and exclude mineral resources that already contribute to the Ukrainian government’s coffers and so would not impact Naftogaz or Ukrnafta – Ukraine’s largest gas and oil producers.

According to FT, Ukrainian officials said the deal had been approved by its justice, economy and foreign ministers – and Zelensky might travel to Washington in the coming weeks for a signing ceremony with Trump. 

“This will be a chance for the president to discuss what the bigger picture is. And then after it, we will be able to think of the next steps,” one official told FT.

Ukrainian officials emphasized that the deal was only a “framework agreement” and that revenues won’t change hands until a fund is set up.

Zelensky’s government will also have to get the go-ahead from the Verkhovna Rada, Ukraine’s parliament, where opposition MPs have indicated that there will be heated debate.