The Nitty-Gritty of the Signed Deal
U.S. and Ukraine finalized mineral agreement
On the 30th of April, U.S. Treasury Secretary, Scott Bessent, and Ukraine's Minister of Economy, Julia Svyridenko, sealed an agreement in the states capital, known as the U.S.-Ukraine Reconstruction Investment Fund (RIF), or the highly-anticipated rare earth metals deal. On the 1st of May, the 12-page document was published on Ukrainian government's website. The essence lies in Ukraine granting the U.S. access to its rich natural resources within this partnership.
The agreement, consisting of a preamble, 11 articles, and an appendix, kickstarts a joint venture aimed at aiding Ukraine's economic recovery and future development, while fostering a robust strategic partnership.
Particulars in the Preamble
Washington and Kyiv were forthcoming about the significant financial and material support the U.S. has extended to Ukraine since the commencement of full-scale hostilities in February 2022. They also expressed their shared aspirations for lasting peace and the intention of the U.S. to invest in a "free, sovereign, and secure" Ukraine. The parties agreed to exclude any states and individuals that acted adversely in the conflict from benefiting from Ukraine's recovery process. They plan to flesh out the details in a separate Limited Partnership Agreement.
The Fundamentals of Forming Partnerships (Article 2 et seq.)
The core of the agreement begins with Article 2, which outlines the establishment of the joint Reconstruction Investment Fund. The Ukrainian government vows that if this partnership clashes with any of its local laws, it shall take precedence.
Article 3 sets the purpose of the agreement: to strengthen the strategic partnership between the U.S. and Ukraine and act as a beacon for "transparent, accountable, and forward-looking investments" in critical sectors of Ukraine's economy.
Key highlights emphasize tax exemptions and currency convertibility, along with the provision that Ukraine will issue licenses for the development of natural resources, infrastructure, and other assets within the partnership. Ukraine is obligated not to provide special privileges to third parties, provided it doesn't contradict Ukrainian legislation and its commitments to the European Union.
The agreement establishes market-based buyout rights, dispute resolution procedures, and mentions amendments' possibility with both parties' written consent. The contract becomes effective upon completion of internal procedures, such as ratification by the Verkhovna Rada, and the exchange of corresponding notes.
The deal covers a range of natural resources, including aluminum, barium, beryllium, gadolinium, oil, natural gas, and other strategic minerals critical for the defense, clean energy, and tech industries. The Ukrainian Minister clarified the fund's objectives and terms on Facebook; highlighting that full ownership and control of resources remains with Ukraine, which decides where and what to extract. The U.S. participation in the fund will be orchestrated via its International Development Finance Corporation, which will actively attract investments and technologies from the U.S., EU, and other nations to Ukraine.
The White House deemed this partnership a "groundbreaking, first-of-its-kind historic agreement" designed to ensure Ukraine's economic restoration and long-term success. The agreement requires equal representation from both American and Ukrainian sides in a specially created company, granting the U.S. priority rights if it decides to acquire Ukrainian resources for its Self. The U.S. insists that no entities that have funded or supplied Russia's military machine will enjoy benefits from Ukraine's reconstruction process.
- Svyridenko, in a post on Facebook, clarified that the U.S.-Ukraine Reconstruction Investment Fund will focus on various natural resources, including lithium, which is crucial for both defense and clean energy industries.
- The agreement, defining the terms of the partnership between Ukraine and the U.S., states that the Ukrainian Ministry of Economy, under Minister Svyridenko, will issue licenses for the development of lithium, among other resources, within the context of the partnership.
- In the 12-page document, politics play a significant role, with the agreement stipulating that entities that have funded or supplied Russia's military machine will not benefit from Ukraine's reconstruction process, a move aimed at handling general-news related conflicts of interest.
- The U.S. Treasury Secretary, Bessent, and Svyridenko agreed that this partnership, operated through the U.S.'s International Development Finance Corporation, will prioritize providing preferences for transparent, accountable, and forward-looking investments that will be instrumental in defining Ukraine's future development and security.
