US eyes control over Ukraine's minerals in new draft deal
The United States is aiming to gain control over investments related to Ukraine's mineral resource extraction and infrastructure. This could have implications for Ukraine's relationships with the European Union and other allies, as reported by Bloomberg.
What do you need to know?
- The USA wants to control investments: The United States plans to oversee all major investments in Ukraine's extraction and infrastructure, which may impact its relations with Kyiv's other allies.
- Draft agreement: The revised version of the US-Ukraine agreement specifies that the USA will have first refusal rights and control over the investment fund for Ukraine's reconstruction.
- Ukraine's reaction: Ukraine is expected to propose amendments to the American document, and discussions on the final form of the agreement are ongoing.
What are the details of the US-Ukraine agreement?
According to Bloomberg, the USA wants priority in investments in Ukraine, which would allow it to potentially block Kyiv's other allies.
The draft agreement states that the United States will have rights to profits from the investment fund, which will be controlled by Washington. Notably, the document states that the USA considers the "material and financial benefits" it has provided to Ukraine since Russia's full-scale invasion in February 2022 as its contribution to this fund.
This means the Trump administration would require Ukraine to reimburse all American military and economic support provided since the onset of the war before Kyiv could draw any income from the partnership fund, according to Bloomberg.
What does this mean for Ukraine?
Ukraine, which obtained EU candidate status in 2022, may face difficulties in accession negotiations if the USA controls its investments.
Kyiv has already rejected American pressure to include Washington's support as a contribution to the joint fund. "We support cooperation with the US, we don’t want to give a single signal that can prompt the US to stop aid to Ukraine," said President Zelensky.
What are the terms of the agreement?
According to the draft, the American International Development Finance Corporation (DFC) would oversee the investment fund and appoint the majority of the board members.
Ukraine would be required to pay 50% of its revenue from new natural resources into the fund. The USA would have the right to purchase Ukrainian raw materials before other parties. The agreement does not include a time limit, and Kyiv would be unable to sell minerals to the USA's strategic competitors.
