THE US and Ukraine have finally signed the long-awaited minerals deal two months after a bust-up between Donald Trump and Volodymyr Zelensky shocked the world.
The agreement comes as a humiliating blow for Vladimir Putin, who has sought to break apart the two allies.
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For Kyiv, the deal is central to binding it to Washington’s might and preventing any more Russian invasions after a peace deal.
Trump has vowed he wants peace in Ukraine, but has said that the US must be repaid for all the military support it has given the country.
The deal will provide Washington privileged access to new investment projects to develop Ukraine‘s natural resources, including aluminium, graphite, oil and natural gas.
It also means America will continue to back Ukraine in the war.
Zelensky did not go to Washington to sign the deal – instead it was inked by Ukraine’s First Deputy Prime Minister Yulia Svyrydenko.
She said after: “Together with the United States, we are creating the Fund that will attract global investment into our country.”
Trump initially was due to close the deal when Zelensky visited the White House back in February.
But plans were derailed after their historic White House row, which saw the infamous shouting match erupt and Trump asking Zelensky to leave.
After rounds of back-and-forth diplomatic negotiations, both Washington and Kyiv agreed to sign the deal Wednesday.
Announcing the signing of the deal in Washington, Treasury Secretary Scott Bessent said it showed “both sides’ commitment to lasting peace and prosperity in Ukraine.”
He added: “This agreement signals clearly to Russia that the Trump administration is committed to a peace process centred on a free, sovereign and prosperous Ukraine over the long term.
“And to be clear, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.”
In Kyiv, Prime Minister Denys Shmygal said on national television that the agreement was “good, equal and beneficial.”
In a post on Telegram, Shmygal said that the two countries would establish a Reconstruction Investment Fund with each side having 50 per cent voting rights.
“Ukraine retains full control over its subsoil, infrastructure and natural resources,” he said.
Meeting a key concern for Kyiv, he said Ukraine would not be asked to pay back any “debt” for the billions of dollars in US weapons and other support since Russia invaded in February 2022.
“The fund’s profits will be reinvested exclusively in Ukraine,” he said.
UNCLE SAM’S SECURITY
Ukrainian officials hope that signing the deal proposed by Trump will firm up American support for Kyiv in the more than three-year-old war.
A former Trump advisor told LBC the developing US-Ukraine minerals deal will be a “trip wire” that Russia will not cross.
He said: “It would engage the American military. It puts the Americans squarely in the middle of the Ukrainian state. It is a trip wire that Putin would dare not to cross.”
Trump had originally sought $500 billion in mineral wealth — around four times what the United States has contributed to Ukraine since the war.
He has previously baulked at offering security guarantees to Ukraine and has rejected its aspiration to join Nato.
US-Ukraine minerals deal explained
By Sayan Bose, Foreign News Reporter
The minerals deal sets out the creation of a joint US-Ukrainian fund for reconstruction, which will receive 50 per cent of profits and royalties accruing to the Ukrainian state from new natural resources permits in Ukraine.
The deal does not spell out how the joint fund’s revenues will be spent, who benefits or who controls decisions about the spending.
Now that the deal has been closed, the two sides will agree on two further technical and supplementary documents outlining issues such as how the funds are accumulated.
Ukraine would retain control of all its resources in the deal, while the fund will invest in the development of Ukraine for 10 years, according to the country’s prime minister Denys Shmyhal.
The US could use its future military assistance to Ukraine as its contribution to the fund, Shmyhal said, with no previous military aid to the country reflected in the deal.
“Ukraine will only make a contribution from new licenses, from new royalties on mineral resources. This will be our contribution, 50% of which will be given to this fund,” he added.
A draft of the main minerals agreement showed that Ukraine had secured the removal of any requirement for it to pay back the US for past military assistance, something Ukraine had staunchly opposed.
Washington has been Ukraine’s single largest military donor since Russia’s 2022 invasion, with aid of more than 64 billion euros ($72 billion), according to the Kiel Institute in Germany.
The rare earth minerals Washington will have access to
Rare earth elements are a set of 17 elements that are essential in many kinds of consumer technology, including cellphones, hard drives and electric and hybrid vehicles.
It is unclear if Trump is seeking specific elements that Ukraine has.
The country also has other in-demand minerals to offer including lithium, titanium, and uranium.
The country’s reserves of titanium, a key component for the aerospace, medical and automotive industries, are believed to be among Europe’s largest.
Ukraine also holds some of Europes largest known reserves of lithium, which is required to produce batteries, ceramics and glass.
China, Trumps chief geopolitical adversary, is the worlds largest producer of rare earth elements.
Both the US and Europe have sought to reduce their dependence on Beijing.
For Ukraine, such a deal would ensure that its biggest and most consequential ally does not freeze military support, which would be devastating for the country that will soon enter its fourth year of war against Russia’s full-scale invasion.
The idea also comes at a time when reliable and uninterrupted access to critical minerals is increasingly hard to come by globally.
Ukraines rare earth elements are largely untapped because of the war, regulation, and information about what exactly is underground.
An estimated 40 per cent of Ukraine’s metallic mineral resources are inaccessible because of Russian occupation, according to data from We Build Ukraine, a Kyiv-based think tank.
Ukraine has argued that it is in Trumps interest to develop the remainder before Russian advances capture more.
The European Commission identified Ukraine as a potential supplier for over 20 critical raw materials and concluded that the countrys accession to the EU could strengthen the European economy.
In 2021, the Ukrainian mineral industry accounted for 6.1% of the countrys gross domestic product and 30% of exports.
But Trump said on Wednesday that a US presence on the ground would benefit Ukraine.
“The American presence will, I think, keep a lot of bad actors out of the country or certainly out of the area where we’re doing the digging,” Trump said at the cabinet meeting.
He reiterated that the US should get something for its prior aid to Kyiv, thus the effort to secure a deal for Ukraine’s plentiful deposits of rare earth minerals.
“I assume they’re going to honour the deal. We haven’t really seen the fruits of that deal yet. I suspect we will,” Trump said after a cabinet meeting on Wednesday.
Ukraine holds some five per cent of the world’s mineral resources and rare earths, according to various estimates.
But work has not yet started on tapping many of the resources, and many sites are in territory now controlled by Russian forces.
Notably, Ukraine has around 20 per cent of the world’s graphite, an essential material for electric batteries, according to France’s Bureau of Geological and Mining Research.
Ukraine is also a major producer of manganese and titanium, and says it possesses the largest lithium deposits in Europe.
Russia controls about 20 per cent of Ukraine’s territory after more than three years of brutal fighting that has killed tens of thousand,s including civilians.
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