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US-Ukraine minerals deal: Inside the details
World News
01-05-2025 | 07:02
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US-Ukraine minerals deal: Inside the details
Washington and Kyiv have signed a new deal that will see the United States invest in Ukraine's rare earth deposits as it seeks to reduce military aid to the war-torn country.
The deal comes after weeks of delays following a spat between U.S. President Donald Trump and Ukrainian leader Volodymyr Zelensky.
Why the deal?
Trump had demanded compensation for U.S. aid given to Ukraine under his predecessor, Joe Biden's administration, since Russia's February 2022 invasion.
The U.S. leader had sought $500 billion in compensation -- around four times the amount that the United States has paid out to Ukraine, which currently stands at $120 billion, according to the Kiel Institute, a German economic research body.
Zelensky rejected that version of the deal, saying he would not sign an accord that "ten generations" of Ukrainians would have to pay off.
Ukraine has agreed to the minerals deal as a way to secure long-term U.S. investment, as Trump has drastically scaled back U.S. security commitments around the world.
Trump has balked at offering security guarantees to Ukraine and rejected its bids to join NATO -- but he has said a U.S. presence on the ground would benefit Ukraine.
How will it work?
The two countries will establish a joint Reconstruction Investment Fund, with each side having equal voting rights.
The fund's profits will be invested exclusively in Ukraine, which will not be asked to pay back any "debt" for billions of dollars in U.S. support since Russia's February 2022 invasion.
Ukraine will have "full control over its subsoil, infrastructure, and natural resources," Prime Minister Denys Shmygal said.
The deal will exclusively finance mineral, oil, and gas projects as well as infrastructure and processing in Ukraine for the first 10 years, after which "profits may be distributed between the partners."
"The transfer and development of technologies is an important component of the agreement because we need not only investments but also innovations," Ukraine's Economy Minister Yulia Svyrydenko said.
Svyrydenko added that the agreement would not impact Ukraine's bid for integration into the European Union.
AFP
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United States
Ukraine
Donald Trump
Volodymyr Zelensky
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