After several weeks of tense negotiations, the United States and Ukraine have finally reached a historic natural resources cooperation agreement on Wednesday evening (April 30th), involving the development of strategically important mineral resources.
This agreement will grant the United States priority participation in new mineral trades in Ukraine and provide financial investment for Ukraine’s reconstruction. The establishment of the joint investment fund – the “United States-Ukraine Reconstruction Investment Fund” – will be used to support Ukraine’s reconstruction, which is one of the core components of President Trump’s ceasefire efforts.
On Thursday (May 1st), US Treasury Secretary Scott Bessent stated that the US-Ukraine mineral agreement is a comprehensive economic partnership that will enable President Donald Trump to negotiate with Russia more effectively.
Bessent emphasized in an interview with Fox News that this agreement sends a clear message to Russia that “Ukraine and the United States are united in their goals.” He pointed out, “If Ukraine does not prosper, the US will not benefit, allowing President Trump to negotiate with Russia more advantageously.”
He added that this comprehensive economic partnership covers rare earth minerals, infrastructure, and energy, presenting an opportunity for mutual benefit.
Ukrainian officials have described the final agreement as embodying an equal partnership between the US and Ukraine. Ukraine managed to persuade President Trump to abandon some key demands, while the US did not have to guarantee security for Ukraine in the agreement.
According to CNN and BBC reports, here are some key points regarding this historically significant strategic agreement:
Aid Terms:
The crucial point of the agreement is that Ukraine is not required to repay the US aid it has received.
This was a major concession made by Trump, who had previously insisted that Ukraine should “repay” the $350 billion in aid provided by the US during the war, demanding that Ukraine use the proceeds from $500 billion in rare earth and other mineral resources as repayment. However, Ukrainian President Volodymyr Zelensky refused to accept this.
The agreement signed on Wednesday explicitly states that US military assistance to Ukraine in the future will be counted as US contributions to the “Reconstruction Investment Fund”, through which the US will invest in Ukraine’s natural resources sector.
Ukrainian Prime Minister Denys Shmyhal stated that the agreement does not require Ukraine to repay any so-called “debt”.
Trump emphasized that the US will “theoretically get more” through this agreement.
Natural Resources:
The agreement grants the US priority rights to exploit Ukrainian mineral resources, while Ukraine retains decision-making power on where and what resources can be developed. Ukraine will also retain ownership rights over all its resources.
Yulia Svyrydenko, the Ukrainian First Deputy Prime Minister who signed the agreement on behalf of Ukraine, stated: “All resources within our territory and territorial waters belong to Ukraine. The Ukrainian government has the right to decide where and what to mine.”
Although Trump referred to this as a “rare earth agreement,” the agreement signed on Wednesday goes beyond that scope to include other natural resources such as oil, natural gas, gold, and copper.
The agreement also clearly states that the goal for both the US and Ukraine is to “establish a peaceful, sovereign, and sustainable Ukraine.”
Exclusion of Existing Resources:
The agreement only applies to new projects, with existing mining operations and revenue streams not included. Both parties need new investments to generate profits.
EU Related Clauses:
The agreement preserves Ukraine’s future potential to join the EU and stipulates that any investments must align with Ukraine’s obligations as an EU candidate country. If Ukraine joins the EU in the future, the agreement will be renegotiated based on the principle of “good faith negotiation.”
The agreement also specifies that the US will support the transfer of more investments and technology from the EU and other regions to Ukraine.
While the terms appear favorable to Ukraine, the agreement also provides substantial benefits to the US.
The agreement text further indicates that all profits and funds obtained under the agreement will be tax-free in Ukraine and not subject to any taxation or tariff restrictions.
The agreement additionally states that if the agreement conflicts with current Ukrainian laws, the agreement will take precedence, giving it legal priority.
US Treasury Secretary Bessent stated that this is a “historically significant economic partnership.” He noted, “This sends a clear signal to Russia: the Trump administration is committed to a peace process centered around a free, sovereign, and prosperous Ukraine.”
Security Guarantees:
Ukraine has abandoned the demand to include US security guarantees in the agreement. This was a major point of contention during the meeting between Zelensky and Trump at the White House in February this year.
Trump refused to provide security assurances, preferring to sign the agreement first and then discuss security guarantees, which Zelensky rejected on the spot. However, Ukrainian officials later believed that US investments and business presence in Ukraine would make Washington more concerned about Ukraine’s security.
First Deputy Prime Minister Svyrydenko stated that Ukraine expects the US to provide new assistance in the future, such as air defense systems.
Non-exclusive Clauses:
While the US has been granted priority in developing natural resources, the agreement does not provide exclusive rights.
Reinvestment of Profits in Ukraine:
Ukraine stated that profits from the agreement over the first ten years will be reinvested entirely in reconstruction and new projects, meaning that the fund will not be distributed profits in the first ten years, with earnings reinvested in the Ukrainian economy. However, this provision was not included in the formal agreement text and may be addressed in subsequent technical agreements.
Ukraine indicated that after the initial ten-year period, profits could be distributed among the cooperating partners.
US Treasury Secretary Bessent later told Fox News on Wednesday evening that this agreement sends a message to the American people that “we have the opportunity to participate, receive some funds and weapons, and be compensated for this, becoming successful partners in cooperation with the Ukrainian people.”
The Ukrainian government has pointed out that its mineral reserves are one of the reasons why the West should support Ukraine, to prevent these strategic resources from falling into Russian hands.
Analysts also support this view. Economists Liam Peach and Hamad Hussain stated in a research report that this agreement “provides some assurance, showing that the Trump administration will not completely abandon Ukraine” because it establishes economic interests for the US in Ukraine.
The US Treasury mentioned in its statement the “full-scale Russian invasion” and added that “any country or individual that funds or supplies Russia’s war machine must not profit from Ukraine’s reconstruction.” This is a significant boost for Ukraine.
The Kremlin has yet to respond to the agreement.
Graphite, lithium, uranium, and the 17 rare earth elements are crucial for economic development and national security. These raw materials are essential for producing electronic products, clean energy technologies (such as wind turbines, power grids, and electric vehicles), and certain weapons systems.
The Chinese Communist Party has long dominated the global rare earth and other strategic mineral supplies, prompting Western countries to urgently seek alternative sources, including Ukraine.
The US heavily depends on imported mineral resources. Data from the US Geological Survey (a US government agency) shows that out of 50 key minerals, the US relies entirely on imports for 12 and over 50% for another 16.
Kyiv officials stated that Ukraine possesses known reserves of 22 of these key minerals domestically.
Ukraine has one of the largest reserves of graphite, lithium, titanium, beryllium, and uranium globally, all of which are listed by the US as critical minerals. Some of these deposits are currently under Russian occupation.