US, Ukraine reopen talks on contentious minerals deal

Observer

12-04-2025

A Ukrainian delegation was in Washington on Friday for a new round of talks about a deal that would give the United States a major stake in Ukraine's natural resources. The visit marked the latest twist in a monthslong saga that has seen Ukraine and the US haggling over a deal that President Donald Trump sees as a way to 'recoup' past US aid to Ukraine, and which President Volodymyr Zelensky hopes can help secure defence guarantees for his country.
The talks will be the first in-person meeting since the White House presented a revised draft agreement that revived tough demands Ukraine had earlier rejected — effectively bringing negotiations back to square one. The talks in Washington, which were expected to start on Friday and last two days, will be mostly technical and will not involve top officials, officials in Ukraine said.
The Ukrainian delegation is led by Taras Kachka, a deputy economy minister in charge of trade, and includes representatives from the ministries of economy and justice. The White House has not provided details on the talks.
The new proposal reverts to Trump's initial demand that Ukraine repay the United States for the billions it has received in military and financial aid since Russia's attack three years ago. As in earlier proposals, Ukraine would have to contribute half its revenue from natural resource projects — including critical minerals, oil and gas, as well as related infrastructure such as ports and pipelines — to a US-controlled investment fund. Profits from the fund would be reinvested in Ukrainian natural resource projects, though the exact share of such profit remained unclear.
The new draft also echoes earlier versions by omitting any mention of security guarantees for Ukraine, a provision that Ukraine had long pressed for and managed to include in a draft last month — but one that Washington had long resisted. The new proposal includes stricter terms than earlier drafts: Washington would claim all profit from the fund until Ukraine repaid at least the equivalent of the US aid received during the war plus 4% annual interest.
The United States also would retain a 'right of first offer' on new projects and the power to veto sales of Ukrainian resources to third countries. And in the first year of the agreement, Ukraine would be prohibited from offering any investment projects to third parties with better financial or economic terms than those offered to the United States.
The fund would be controlled by the International Development Finance Corp., a US government agency responsible for investing in companies and projects abroad. The agency would nominate three board members — while Ukraine would have only two — and would oversee each project where earnings from the fund are invested.
The United States opened the negotiations in February with tough financial demands that Zelensky warned would take 'generations of Ukrainians' to repay. After intense talks, Ukraine managed to soften some of Washington's toughest demands and reached an agreement that it considered more acceptable. But the deal collapsed after a disastrous Oval Office meeting between Trump and Zelensky. The debacle prompted the US to briefly suspend military aid to Ukraine. Since then, Ukraine has treaded carefully to avoid angering the White House.
Now demands that Ukraine had previously succeeded in removing — that Washington retains control of the fund and that Ukraine repays past US aid — have resurfaced in the latest proposal. The security guarantees also disappeared. Officials in Ukraine say they consider the new demands to be an opening bid for further negotiations.
Ukraine's Foreign Minister, Andrii Sybiha, said any future agreement should be mutually beneficial and should not jeopardise Ukraine's accession to the European Union by granting preferential treatment to US businesses. 'This is a key principle for the Ukrainian side,' Sybiha said this week. Still, Ukrainian officials have not rejected the new American demands outright, mindful that the past refusals strained US-Ukraine relations. Instead, they have framed the new round of talks as constructive discussions. 'This dialogue reflects the strategic interests of both nations and our shared commitment to building a strong, transparent partnership,' Yulia Svyrydenko, the Ukrainian economy minister, said. Ukraine is seeking consulting services to advise on the minerals deal and 'protect Ukraine's national interests.' A government order published on Tuesday stated that $2.7 million had been allocated for hiring consultants with experience in public debt management and lawyers.