U.S. and Ukraine sign landmark deal on mineral access and reconstruction funding

On Wednesday, Ukraine and the U.S. finalized a deal strongly championed by President Donald Trump, granting the United States preferential access to new Ukrainian mineral agreements and funding for Ukraine’s reconstruction efforts. 

The accord was signed in Washington after months of tense negotiations, with uncertainty lingering until the final moments due to an eleventh-hour issue.

This agreement establishes a joint investment fund for Ukraine’s reconstruction as Trump tries to secure a peace settlement in Russia’s three-year-old war in Ukraine.

The correspondence is important to Kyiv’s efforts to improve its relationship with Trump and the White House, which was not good after he took office in January.

U.S.-Ukraine pact seeks to cement support and economic recovery amid ongoing war

According to a Treasury post on X, U.S. Treasury Secretary Scott Bessent and Ukrainian First Deputy Prime Minister Yulia Svyrydenko were shown signing the agreement, which noted the deal “clearly signals the Trump Administration’s commitment to a free, sovereign, prosperous Ukraine.”

Svyrydenko said on X that the accord allows Washington to contribute to the fund.

Since Russia’s 2022 invasion, Washington has been Ukraine’s largest military donor, contributing over 64 billion euros ($72 billion) in aid, according to the Kiel Institute in Germany.

Prior to the signing, Trump reiterated on Wednesday that the U.S. should receive something in return for its support to Kyiv, leading to the push for a deal focused on Ukraine’s abundant rare earth mineral deposits.

In announcing the agreement, the U.S. Treasury pointed out that the U.S. has “provided significant financial and material support to Ukraine’s defense” following Russia’s invasion. A deal draft revealed that Ukraine won a removal of any obligation regarding reimbursing the U.S. for previous assistance, a point that Kyiv had vigorously fought.

According to Ukrainian officials, the deal strengthened American support for Kyiv during the war. Still, the draft did not spell out any precise U.S. security guarantees for Ukraine, which was one of Kyiv’s top goals.

In a separate move, Ukraine has been discussing with European allies the creation of an international force to help protect its security if a peace settlement is eventually reached with Russia.

In a statement, the Treasury Department said the fund is in “recognition of the significant financial and material support that the people of the United States have provided to the defense of Ukraine since Russia’s full-scale invasion” and will help “accelerate Ukraine’s economic recovery.”

Minerals-for-aid deal revived after February fallout

The current agreement appears to be the same as the original deal, which was set to be signed in February and indicated that Ukraine would put 50% of the proceeds from its state-owned mineral resources into a fund jointly owned with the U.S. The BBC reported that no security guarantees were outlined for Ukraine.

The deal originated after President Donald Trump indicated Ukraine could give the U.S. access to its minerals in return for U.S. support of Ukraine in its ongoing war with Russia and described the potential agreement as a reimbursement for the U.S. aid.

Ukraine President Volodymyr Zelenskyy traveled to the U.S. in February to reportedly sign the deal. However, he left the White House without signing it after an Oval Office meeting between him and Trump ended in a shouting match. 

Zelenskyy put out a statement days after the visit saying he wanted to end the war with Russia and that Ukraine was ready to sign the minerals deal. He saw it as “a step toward greater security and solid security guarantees.”

Back in February, experts expressed concerns about the cost and production times associated with mining raw materials, and some said the mining might not result in a huge payoff. 

Benchmark Minerals Intelligence rare earths pricing analyst George Ingall noted that the minerals the U.S. desired at the time “won’t be used to make a profit in the next 10 or 15 years.” Ingall also said operationalizing a rare earth mineral mine takes up to $2 billion. 

While a minerals deal may take time to benefit the U.S. financially, obtaining the natural resources from Ukraine could help reduce the U.S.’ reliance on China and Russia to import the materials.