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Scoop
02-05-2025
- Business
- Scoop
Fantasy And Exploitation: The US-Ukraine Minerals Deal
The agreement between Washington and Kyiv to create an investment fund to search for rare earth minerals has been seen as something of a turn by the Trump administration. From hectoring and mocking the Ukrainian President Volodymyr Zelensky before the cameras on his visit to the US capital two months ago, President Donald Trump had apparently softened. It was easy to forget that the minerals deal was already on the negotiating table and would have been reached but for Zelensky's fateful and ill-tempered ambush. Dreams of accessing Ukrainian reserves of such elements as graphite, titanium and lithium were never going to dissipate. Details remain somewhat sketchy, but the agreement supposedly sets out a sharing of revenues in a manner satisfactory to the parties while floating, if only tentatively, the prospect of renewed military assistance. That assistance, however, would count as US investment in the fund. According to the White House, the US Treasury Department and US International Development Finance Corporation will work with Kyiv 'to finalize governance and advance this important partnership', one that ensures the US 'an economic stake in securing a free, peaceful, and sovereign future for Ukraine.' In its current form, the agreement supposedly leaves it to Ukraine to determine what to extract in terms of the minerals and where this extraction is to take place. A statement from the US Treasury Department also declared that, 'No state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine.' Ukraine's Minister of Economy, Yulia Svyrydenko, stated that the subsoil remained within the domain of Kyiv's ownership, while the fund would be 'structured' on an equal basis 'jointly managed by Ukraine and the United States' and financed by 'new licenses in the field of critical materials, oil and gas – generated after the Fund is created'. Neither party would 'hold a dominant vote – a reflection of equal partnership between our two nations.' The minister also revealed that privatisation processes and managing state-owned companies would not be altered by the arrangements. 'Companies such as Ukrnafta and Energoatom will stay in state ownership.' There would also be no question of debt obligations owed by Kyiv to Washington. That this remains a 'joint' venture is always bound to raise some suspicions, and nothing can conceal the predatory nature of an arrangement that permits US corporations and firms access to the critical resources of another country. For his part, Trump fantasised in a phone call to a town hall on the NewsNation network that the latest venture would yield 'much more in theory than the $350 billion' worth of aid he insists the Biden administration furnished Kyiv with. Svyrydenko chose to see the Reconstruction Investment Fund as one that would 'attract global investment into our country' while still maintaining Ukrainian autonomy. Representative Gregory Meeks, the ranking Democrat on the House of Foreign Affairs Committee, thought otherwise, calling it 'Donald Trump's extortion of Ukraine deal'. Instead of focusing on the large, rather belligerent fly in the ointment – Russian President Vladimir Putin – the US president had 'demonstrated nothing but weakness' towards Moscow. The war mongering wing of the Democrats were also in full throated voice. To make such arrangements in the absence of assured military support to Kyiv made the measure vacuous. 'Right now,' Democratic Senator Chris Murphy said on MSNBC television, 'all indications are that Donald Trump's policy is to hand Ukraine to Vladimir Putin, and in that case, this agreement isn't worth the paper that it's written on.' On a certain level, Murphy has a point. Trump's firmness in holding to the bargain is often capricious. In September 2017, he reached an agreement with the then Afghan president Ashraf Ghani to permit US companies to develop Afghanistan's rare earth minerals. Having spent 16 years in Afghanistan up to that point, ways of recouping some of the costs of Washington's involvement were being considered. It was agreed, went a White House statement sounding all too familiar, 'that such initiatives would help American companies develop minerals critical to national security while growing Afghanistan's economy and creating new jobs in both countries, therefore defraying some of the costs of United States assistance as Afghans become more reliant.' Ghani's precarious puppet regime was ultimately sidelined in favour of direct negotiations with the Taliban that eventually culminated in their return to power, leaving the way open for US withdrawal and a termination of any grand plans for mineral extraction. A coterie of foreign policy analysts abounded with glowing statements at this supposedly impressive feat of Ukrainian diplomacy. Shelby Magid, deputy director of the Atlantic Council think tank's Eurasia Centre, thought it put Kyiv 'in their strongest position yet with Washington since Trump took office'. Ukraine had withstood 'tremendous pressure' to accept poorer proposals, showing 'that it is not just a junior partner that has to roll over and accept a bad deal'. Time and logistics remain significant obstacles to the realisation of the agreement. As Ukraine's former minister of economic development and current head of Kyiv school of economics Tymofiy Mylovanov told the BBC, 'These resources aren't in a port or warehouse; they must be developed.' Svyrydenko had to also ruefully concede that vast resources of mineral deposits existed in territory occupied by Russian forces. There are also issues with unexploded mines. Any challenge to the global rare earth elements (REEs) market, currently dominated by China (60% share of production of raw materials; 85% share of global processing output; and 90% manufacturing share of rare earth magnets), will be long in coming.
The Guardian
01-05-2025
- Business
- The Guardian
Ukraine war live: ‘historic' minerals deal signals long-term commitment to a free Ukraine, US says
Show key events only Please turn on JavaScript to use this feature Show key events only Please turn on JavaScript to use this feature Hello and welcome to our live coverage of Ukraine, which has signed a deal to share revenues from the future sale of minerals and rare earths with the US after months of fraught negotiations. The agreement 'signals clearly to Russia that the Trump administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term,' US treasury secretary Scott Bessent said in announcing it. 'To be clear, no state or person who financed or supplied the Russian war machine will be allowed to benefit from the reconstruction of Ukraine,' he added. Ukraine's prime minister, Denys Shmyhal, said on national television that the agreement, which must be ratified by Ukraine's parliament, was 'good, equal and beneficial'. In a post on social media he said the two countries would establish a reconstruction investment fund with each side having 50% voting rights and made clear that Kyiv would not be asked to pay back any 'debt' for US aid during the war. The deal had been a source of great friction between the US and Ukraine, including a disastrous February meeting between Donald Trump and Volodymyr Zelenskyy in which Trump and his vice-president, JD Vance, shouted at the Ukrainian leader in front of live TV cameras. Ahead of the meeting Zelenskyy had alleged the US was pressuring him to sign over more than $500bn (£395bn) in mineral wealth – about four times what the US has contributed to Kyiv since the start of the war and which Zelenskyy had said would take 10 generations of Ukrainians to pay back. Here's a roundup of key developments: Ukraine's first deputy prime minister Yulia Svyrydenko, who was in Washington to sign the fund, said that Ukraine would retain full ownership of resources 'on our territory and in territorial waters belong to Ukraine.' There would be no changes to ownership of state-owned companies, she said and income would come from new licences for critical materials and oil and gas projects, not from projects which had already begun. There would be no changes to ownership of state-owned companies, she said, 'they will continue to belong to Ukraine' . That included companies like Ukrnafta, Ukraine's largest oil producer, and nuclear energy producer Energoatom. Income would come from new licences for critical materials and oil and gas projects, not from projects which had already begun, Svyrydenko said. Income and contributions to the fund would not be taxed in the US or Ukraine, she said, 'to make investments yield the greatest results'. Ukraine's prime minister, Denys Shmyhal, said in a post on social media tht the agreement was based on five key principles, including equal voting ights bewteen the parties and no debt obligations for Ukraine. He also said the fund would not be an obstacle to Ukraine's EU accession talks. It was unclear up until the last moment whether the US and Ukraine would manage to sign the deal. Washington reportedly pressured Ukraine to sign additional agreements, including on the structure of the investment fund, or to 'go back home'. Bessent later said the US was ready to sign though Ukraine had made some last-minute changes. Share
Yahoo
26-02-2025
- Business
- Yahoo
Trump says he will meet Zelensky on Feb. 28 in Washington to sign agreement on minerals
Editor's note: This story has been updated with Ukraine's Cabinet of Ministers approval of the agreement. U.S. President Donald Trump announced that Ukrainian President Volodymyr Zelensky will visit Washington on Feb. 28 to sign a minerals agreement between the two countries. "It's now confirmed, and we're going to be signing an agreement which will be a very big agreement," Trump said on Feb. 26 during a White House cabinet meeting. Following weeks of tense negotiations, Washington and Kyiv agreed on a deal to establish a fund to which Ukraine will contribute 50% of proceeds from the "future monetization" of state-owned mineral resources, including oil, gas, and logistics infrastructure. It excludes revenue streams already flowing into Ukraine's budget, meaning it will not impact Naftogaz and Ukrnafta, the country's largest oil and gas producers. The final version drops earlier U.S. demands for a $500 billion claim over Ukraine's resources, which had been a major sticking point. Ukraine's Cabinet of Ministers approved the decision to sign the mineral resources agreement on Feb. 26, Prime Minister Denys Shmyhal said. Security guarantees, a key issue for Kyiv, are not explicitly included in the agreement but will be discussed in future negotiations, Zelensky told journalists on Feb. 26. Zelensky also said he plans to use the meeting with Trump to ask about continued U.S. support, Washington's direct talks with Moscow, and the prospect of a broader strategy to end the war. "I have already emphasized that it is unacceptable for us if decisions about us are made without us," he said. The U.S. and Russia held their first direct negotiations in Saudi Arabia on Feb. 18, marking the first such meeting since Moscow's full-scale invasion began. A second round is set for Feb. 27, with Russian Foreign Minister Sergey Lavrov saying discussions will include the reopening of embassies. Trump, who has repeatedly said he wants to broker a deal to end the war, suggested a ceasefire agreement was within reach. "Most importantly, by far, we're going to make a deal with Russia and Ukraine to stop killing people," he said on Feb. 26. Zelensky noted he hopes to get more answers from the meeting about what to expect from the United States in the near future and "what joint plan we can prepare to end this war." The meeting comes as Trump's outreach to Moscow fuels concerns in Kyiv and among European allies. He has also escalated rhetoric against Zelensky, calling him a "dictator without elections," echoing Russian propaganda narratives. His remarks ignore the fact that Ukraine's constitution prohibits elections during martial law, which has been in effect since Russia launched its full-scale invasion. Read also: Exclusive: The full text of the US-Ukraine mineral deal We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
