Washington:
Washington and Kyiv have signed a new deal that will see the United States invest in Ukraine’s rare earth deposits as it seeks to reduce military aid to the war-torn country.
The deal comes after weeks of delays following a spat between US President Donald Trump and Ukrainian leader Volodymyr Zelensky.
Here’s what we know about the agreement — which lacks any security guarantee for Ukraine:
Why the deal?
Trump had demanded compensation for US aid given to Ukraine under his predecessor Joe Biden’s administration since Russia’s February 2022 invasion.
The US leader had sought $500 billion in compensation — around four times the amount that the United States has paid out to Ukraine, which currently stands at $120 billion, according to the Kiel Institute, a German economic research body.
Mr Zelensky rejected that version of the deal, saying he would not sign an accord that “ten generations” of Ukrainians would have to pay off.
Ukraine has agreed to the minerals deal as a way to secure long-term US investment, as Trump has drastically scaled back US security commitments around the world.
Mr Trump has balked at offering security guarantees to Ukraine and rejected its bids to join NATO — but he has said a US presence on the ground would benefit Ukraine.
How will it work?
The two countries will establish a joint Reconstruction Investment Fund, with each side having equal voting rights.
The fund’s profits will be invested exclusively in Ukraine, which will not be asked to pay back any “debt” for billions of dollars in US support since Russia’s February 2022 invasion.
Ukraine will have “full control over its subsoil, infrastructure and natural resources,” Prime Minister Denys Shmygal said.
The deal will exclusively finance mineral, oil and gas projects as well as infrastructure and processing in Ukraine for the first 10 years, after which “profits may be distributed between the partners.”
“The transfer and development of technologies is an important component of the agreement, because we need not only investments, but also innovations,” Ukraine’s Economy Minister Yulia Svyrydenko said.
Svyrydenko added that the agreement would not impact Ukraine’s bid for integration to the European Union.
What resources does Ukraine have?
Ukraine holds some five percent of the world’s mineral resources and rare earths, according to various estimates.
But work has not yet started on tapping many of the resources and a number of sites are in territory now controlled by Russian forces.
Ukraine also has around 20 percent of the world’s graphite, an essential material for electric batteries, according to France’s Bureau of Geological and Mining Research, and is a major producer of manganese and titanium.
It also says it possesses one of the largest lithium deposits in Europe — yet to be extracted.
Kyiv says “rare earth metals are known to exist in six deposits” and an investment of $300 million would be needed to develop a deposit at Novopoltavske, which it claimed was one of the world’s largest.
What does US support mean for Ukraine?
Ukraine has said any deal would need to include long-term and robust security guarantees that would deter Russia from attacking again.
But according to the text published by media, the only security clause puts the United States under no obligation — nor does the deal mention weapons.
It simply says that the US “supports Ukraine’s efforts to obtain the security assurances necessary to build a lasting peace”.
However, a US Treasury statement notably mentioned Russia’s “full-scale invasion” of Ukraine — diverging from the Trump administration’s usual formulation of a “conflict” for which Kyiv bears a large degree of responsibility.
Treasury Secretary Scott Bessent said the deal showed “that the US has an economic interest in Ukraine.”
“It’s a signal to the Russian leadership. It’s also a signal to the American people that we have a chance to participate, get some of our… the funding and the weapons compensation for those,” he told Fox News.
(Except for the headline, this story has not been edited by The Hindkesharistaff and is published from a syndicated feed.)