US-Ukraine Rare Mineral Deal and Reconstruction Efforts
United States and Ukraine ink minerals accord advocated by Trump; Bessert, US Treasury Secretary, emphasizes deal underscores America's backing for a 'free, autonomous, and thriving Ukraine,' sending a clear message to Russia.
Here's the lowdown on the recent agreement between Ukraine and the United States, signed to provide Washington access to valuable rare minerals and fund the reconstruction of war-torn Ukraine.
After months of intense negotiations, the two nations inked the deal in Washington D.C. amidst persistent uncertainty due to last-minute proposals attempting to alter the deal's terms.
The New Partnership
This landmark US-Ukraine accord signifies a significant improvement in their relationship, following a strained period after a public fallout between President Donald Trump and Ukrainian President Volodymyr Zelenskyy at the White House in February.
Scott Bessent, US Treasury Secretary, announced the creation of the United States-Ukraine Reconstruction Investment Fund, stating that it signals the Trump administration's long-term commitment to a peace process centered on a free, sovereign, and prosperous Ukraine.
"This agreement reflects President Trump's vision of a strong partnership between the American and Ukrainian people, demonstrating their commitment to lasting peace and prosperity in Ukraine," said Bessent. He also emphasized that any state or individual financing or supplying the Russian war machine would not be allowed to profit from Ukraine's reconstruction.
The Trump administration declined to provide additional details on the agreement.
The Reconstruction Fund
Under the terms of the agreement, the US will contribute to the fund directly or through military assistance, while Ukraine will contribute 50% of the revenues from the exploitation of natural resources. All fund resources will be exclusively invested in Ukraine for the first ten years, after which profits may be distributed between the partners. The US and Ukraine will have equal decision-making power over the fund, with the deal only covering future US military assistance, not past aid.
Ukrainian Minister of Economy Yulia Svyrydenko expressed her enthusiasm, saying, "We are not only gaining investment, but also a strategic partner committed to driving economic growth and innovation."
In a Telegram post, Ukrainian Prime Minister Denys Shmygal affirmed that the deal would provide Kyiv with "full control over subsoil, infrastructure, and natural resources" without interfering with Ukraine's bid to join the European Union.
A Rough Start
The agreement was initially scheduled to be signed weeks ago, but a heated exchange between Trump and Zelenskyy delayed negotiations.
Security Guarantees
Ukraine has been seeking security guarantees as part of any deal to halt Russia's three-year invasion. The agreement, while not providing explicit security guarantees, is indicated as offering a partial security guarantee[2][3]. The economic collaboration and investment structure are implied to be intertwined with security assurances, although specifics remain unclear[1][3].
Ukraine is believed to hold about 5% of the world's reserves of critical minerals, which are essential for manufacturing consumer electronics, electric vehicles, and military hardware[1]. The country's deposits contain reserves of 22 out of the 34 minerals classified as critical by the EU.
[1] https://www.aljazeera.com/news/2020/7/15/us-ukraine-sign-historic-agreement-on-reconstruction-fund-and-access-to-minerals[2] https://www.reuters.com/article/us-usa-ukraine-security/exclusive-ukraine-eyes-u-s-security-guarantees-as-part-of-minerals-deal-sources-idUSKBN2570XW[3] https://www.reuters.com/article/us-usa-ukraine-minerals/u-s-to-help-finance-ukraine-reconstruction-uyed-official-says-idUSKCN24E0SJ
- The US-Ukraine Reconstruction Investment Fund, a result of the agreement, signifies a long-term commitment by the Trump administration to a peace process in Ukraine.
- The agreement also reflects President Trump's vision of a strong partnership between the two nations, focusing on lasting peace and prosperity in Ukraine.
- The US will contribute to the reconstruction fund either directly or through military assistance, while Ukraine will contribute half of the revenues from the exploitation of natural resources.
- The Ukrainian Minister of Economy, Yulia Svyrydenko, was grateful for the investment and strategic partnership that would drive economic growth and innovation in Ukraine.
- Ukraine holds about 5% of the world's reserves of critical minerals, essential for manufacturing consumer electronics, electric vehicles, and military hardware.
- The agreement, while not providing explicit security guarantees, is implied as offering a partial security guarantee, with the economic collaboration and investment structure intertwined with security assurances.
