Ukraine and the United States are set to sign a landmark minerals agreement, marking a significant step towards strengthening economic ties between the two nations. The agreement, which was approved by Ukraine’s Cabinet of Ministers, aims to unlock Ukraine’s mineral wealth and bolster its economic recovery. However, concerns persist about the broader implications of the deal, particularly in the realm of security.
The agreement, to be signed by Ukrainian leader Volodymyr Zelenskyy during his visit to the White House on Friday, includes provisions for the co-ownership and management of a post-war reconstruction fund for Ukraine. Under this agreement, Ukraine will allocate 50% of future revenues from its natural resources to the fund, while the US will maintain a “long-term financial commitment to the development of a stable and economically prosperous Ukraine.”
While this agreement will undoubtedly have a positive impact on Ukraine’s economic future, security experts warn that it may fall short in addressing the country’s ongoing security challenges in the face of continued Russian aggression. The deal makes no direct reference to efforts to end Russia’s invasion of Ukraine, apart from a single line stating the US’ support for Ukraine’s efforts to obtain security guarantees needed for lasting peace.
However, from an American business perspective, the deal is seen as a major opportunity for both nations. Andy Hunder, president of the American Chamber of Commerce in Ukraine, believes that the agreement will establish a new American-Ukrainian fund that will focus on state-owned enterprises and Ukraine’s abundant natural resources, including gas, oil, and critical minerals. Hunder expressed optimism about the potential impact of the deal, stating that professional fund managers can turn these enterprises profitable quickly and benefit both Ukrainian and American taxpayers.
According to Hunder, the fund will introduce professional management to Ukraine’s state-owned enterprises, which currently face mismanagement issues. He explained that Ukraine has the second highest number of state-owned enterprises in the world, many of which are being mismanaged by the Ukrainian state. With the involvement of professional fund managers, these entities could turn profits around rapidly, contributing to Ukraine’s economic recovery.
The economic potential of Ukraine was a key topic of discussion between the two countries in 2024, with Senator Lindsey Graham’s visit in March and May of that year. Hunder believes that this deal is a step towards finding a peaceful solution to the ongoing conflict in Ukraine. He stated, “To take advantage of this opportunity, the war must end, and this deal is a step towards that. This is what the new administration under President Trump is focusing on – finding ways to stop the killing of Ukrainians by the Russians. We expect a ceasefire this year, and now is the time for Ukraine to seize the opportunity for economic recovery and reconstruction.”
Roman Opimakh, former general director of the Ukrainian Geological Survey, also believes that the deal could benefit both countries. He stated that it will help the US diversify its supply of rare metals and decrease dependence on China. For Ukraine, the deal could enable post-war re-industrialization and economic growth. Opimakh believes that this agreement will not only renew Ukraine’s industrial potential but also increase the country’s global significance.
While the deal highlights the US’ interest in Ukraine’s economic future, security experts caution that it is not a comprehensive solution to Ukraine’s security challenges. Andriy Zagorodnyuk, former defense minister and current chairman of the Center for Defense Strategies in Ukraine, stated that the deal has broader implications. He explained, “Investments of this scale serve as anchor investments, potentially attracting more resources to Ukraine’s economy.” However, Zagorodnyuk cautioned that economic ties alone are not enough to guarantee Ukrainian sovereignty in the face of Russian aggression. He believes that Ukraine needs military power to deter future attacks, either on its own or in partnership with NATO and European allies.
Zagorodnyuk also acknowledged concerns that Russia may attempt to manipulate the situation and convey to the US administration that even if they continue their aggression, they would still respect American interests. He believes that the US must send a clear message of strength to Russian President Vladimir Putin to deter any further aggression.
Details of the agreement were negotiated until the last minute, with both parties reaching a more favorable compromise than the initial US demand for a $500 billion claim on Ukraine’s natural resources. However, the deal does not include explicit security guarantees, which were originally sought by Ukraine. The US will maintain decision-making authority within the fund under its own
