The United States and Ukraine have finally signed a deal that is set to give Washington access to Ukraine’s critical minerals and other natural resources, in a move aimed at bolstering Kyiv’s defense against Russia. The agreement, which still needs to be ratified by the Ukrainian parliament, is seen as a significant step forward in securing long-term support for Ukraine’s military efforts.
According to Ukrainian officials, the current version of the deal is much more favorable to Ukraine than previous iterations, which they felt gave too much power to Washington and reduced Kyiv to a junior partner. The agreement includes provisions for a reconstruction fund that Ukraine hopes will pave the way for continued American military assistance.
Economy Minister Yulia Svyrydenko, who signed the deal for Ukraine, emphasized the mutually beneficial nature of the agreement, highlighting the United States’ commitment to promoting peace in Ukraine and acknowledging Ukraine’s contribution to global security by relinquishing its nuclear arsenal.
The deal covers a wide range of minerals, including rare earth elements, as well as oil and natural gas. It does not include resources that already generate revenue for Ukraine, and any profits from new investments will be shared between the two countries. Importantly, Ukraine will retain full ownership of its resources and have control over extraction processes.
Rare earth elements, which are essential for various consumer technologies, are a key focus of the agreement. China currently dominates the market for rare earth elements, making efforts to reduce dependence on Beijing a priority for the US and Europe.
The deal establishes a reconstruction investment fund that will be jointly managed by the US and Ukraine. The fund is expected to attract investment and technology from American and European countries, with profits from government-owned natural resources contributing to its growth.
Despite challenges in Ukraine’s minerals industry, including regulatory hurdles and lack of data, the country boasts substantial reserves of valuable resources like titanium and lithium. The industry plays a significant role in Ukraine’s economy, accounting for a sizable portion of GDP and exports.
Overall, the agreement signals a commitment from both the US and Ukraine to strengthen their partnership and enhance Ukraine’s defense capabilities. By leveraging its natural resources and strategic position, Ukraine aims to secure long-term support from its allies and deter further aggression from Russia.
