The United States and Ukraine, after months of tense back-and-forth, have signed a new minerals deal where the Washington will have access to Ukraine’s rare earth resources while the Kyiv will get military aid.
The deal, signed on Wednesday, still needs to be ratified by Ukraine’s parliament, but is already seen as much beneficial to the country as compared to earlier proposals that the officials had criticised as one-sided.
“This is an agreement in which the United States notes its commitment to promoting long-term peace in Ukraine and recognizes the contribution that Ukraine has made to global security by giving up its nuclear arsenal,” Ukrainian economy minister Yulia Svyrydenko said in a Facebook post.“We have formed a version of the agreement that provides mutually beneficial conditions for both countries.”
The two countries will establish a joint Reconstruction Investment Fund, with each side having equal voting rights.
What is joint reconstruction investment fund?
The United States and Ukraine will jointly create an Investment Fund for Reconstruction, ensuring equal voting power for both nations.
The comprehensive agreement encompasses 57 different resource categories, including petroleum and natural gas.
All profits generated by the fund will be directed solely towards Ukraine’s development, with no obligation for Ukraine to repay the substantial American support provided since Russia’s February 2022 invasion.
The agreement stipulates that future US military assistance will be considered as contributions towards the fund.
Ukraine maintains complete sovereignty over its underground resources, infrastructure and natural assets.
For the initial decade, the agreement will focus solely on funding mineral extraction, oil and gas ventures, along with infrastructure and processing facilities in Ukraine. Subsequently, the profits could be shared between the participating nations, according to Kyiv.
Ukraine confirms that this arrangement will not affect its aspirations for EU membership.
How will it work?
The collaboration between the United States and Ukraine creates a funding mechanism where 50% of proceeds from Ukraine’s natural resource ventures, including royalties and licensing fees, will be collected.
The accumulated funds will support new Ukrainian initiatives, delivering sustained benefits for both American and Ukrainian citizens through strategic investments.
The fund enables swift deployment of resources towards Ukrainian developmental objectives, focusing on economic expansion and employment opportunities as new ventures are identified.
The outcomes will strengthen Ukraine’s commercial sector whilst establishing durable infrastructure, contributing to the nation’s sustained prosperity.
A jointly managed organisation, comprising three Ukrainian and three American directors in equal measure, will oversee the partnership through consensual decision-making regarding fund allocation and investment strategies.
The arrangement emphasises accountability and openness, ensuring both nations’ populations benefit from Ukraine’s rebuilding efforts.
The scope encompasses projects related to minerals, hydrocarbons and associated infrastructure developments.
The United States maintains priority rights to acquire these resources or nominate preferred buyers.
This arrangement safeguards national security through economic measures, preventing strategic resources from inappropriate acquisition.
This partnership demonstrates America’s tangible commitment to Ukraine’s future prosperity, sending a clear signal to Russia.
Any entities or individuals who supported Russia’s military efforts will be excluded from Ukraine’s reconstruction process, including projects financed through this fund.
