Ukraine and US sign long-awaited minerals and reconstruction deal

Ukraine and US sign long-awaited minerals and reconstruction deal

Ukraine and the United States signed a long-awaited economic partnership deal that will give Washington preferential access to new Ukrainian natural resources in return for investing in Ukraine's reconstruction.

The two countries signed the accord following months of sometimes fraught negotiations.

The agreement was due to be signed in February but collapsed in the wake of a heated exchange between President Donald Trump and Ukrainian President Volodymyr Zelenskyy over how to end the Ukraine-Russia war.

The U.S. Treasury Department said Ukraine and the U.S. would form what it described as a "Reconstruction Investment Fund." A statement said the deal would allow Kyiv and Washington to collaborate with "mutual assets, talents and capabilities" to accelerate Ukraine's recovery. Russia's invasion and near-daily missile and drone strikes on Ukraine's civilian infrastructure have caused tens of billions of dollars in damage to roads, apartment buildings, schools, energy facilities, shopping malls and transport hubs, according to United Nations estimates

Together with the United States, we are creating the Fund that will attract global investment into our country," Ukraine's First Deputy Prime Minister Yulia Svyrydenko wrote on the social media platform X on April 30.

The exact parameters of the accord were not immediately made public. However, a draft of the agreement seen by Reuters gave the U.S. favored access to new Ukrainian natural resources deals. It did not automatically hand Washington a share of Ukraine's mineral wealth or any of its gas infrastructure.

The agreement provides for the creation of a joint U.S.-Ukrainian fund for reconstruction which will receive 50% of profits and royalties accruing to the Ukrainian state from new natural resource permits in Ukraine.

The Ukrainian Geological Survey, a government agency, estimates that 5% of the world's "critical raw materials" are in Ukraine. This includes reserves of graphite, which is used to make batteries for electric vehicles. It also has supplies of titanium, lithium and elements such as beryllium and uranium, used for nuclear weapons and reactors. Ukraine has, according to the survey, major deposits of copper, lead, zinc, silver, nickel and cobalt.

SecDev, a Canadian geopolitical risk consultancy, conducted an evaluation in 2022 that concluded that Russia had occupied 63% of Ukrainian coal mines, and half of its manganese, caesium, tantalum and rare earth deposits. Rare earths are used to make components in smartphones, LED lights and electric cars.

U.S., Ukraine, Russia peace talks

U.S., Ukrainian and Russian officials are continuing to discuss potential peace terms for a war that started three years ago with Russia's invasion. The Kremlin has announced a three-day ceasefire during Moscow's Victory Day celebrations, from May 8 to 10. Ukraine has not agreed to it, instead insisting Russia should cease fire immediately and noting that Russian's persistent missile and drone attacks mean Russia has no genuine interest in peace.