Ukraine and the US sign memorandum of understanding on rare earth minerals
- Ukrainian Economy Minister Yulia Svyrydenko says Kyiv creating fund with US to attract global investment into war-torn country
ISTANBUL
Ukraine and the US signed off Wednesday on a long-awaited minerals deal after months of tense negotiations.
Economy Minister Yulia Svyrydenko announced that she signed the agreement on behalf of Kyiv after talks with US Treasury Secretary Scott Bessent in Washington DC.
"Together with the United States, we are creating the Fund that will attract global investment into our country," she wrote on X.
Bessent, in a video statement on X, said the deal signals to Russia that the administration of US President Donald Trump is "committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long term."
US Secretary of State Marco Rubio later defined the agreement as "a milestone in our shared prosperity and an important step" in ending the Russia-Ukraine war.
Key provisions of the deal have been outlined, particularly by Ukraine.
Leading up to deal
Talks on the minerals deal have been in the works since the beginning of Trump’s second term. By late February, Trump declared that the deal was “very close” to completion and said Ukrainian President Volodymyr Zelenskyy would travel to Washington to finalize it.
But the highly-anticipated signing collapsed after a heated Oval Office exchange on Feb. 28 between Zelenskyy, Trump, and US Vice President JD Vance.
Trump and Vance berated Zelenskyy in front of the world, accusing him of showing little appreciation for years of American military and financial backing. Zelenskyy pushed back, defending his wartime leadership and stressing that the conflict in Ukraine posed risks to global security -- including to the US.
Zelenskyy left the White House with the signing ceremony and a planned news conference canceled.
The fallout led to a temporary suspension of US military aid to Ukraine in March. But the two sides returned to the negotiating table weeks later, culminating in the signing of a memorandum of intent on April 17 and renewed momentum for the deal.
The memorandum said Ukrainian Prime Minister Denys Shmyhal would visit the US to support the conclusion of “technical” discussions on terms of a deal to create an investment fund, as part of which he held talks with Bessent in Washington on April 23.
Key provisions
Key provisions of the agreement were outlined by Svyrydenko after she confirmed its signing.
Svyrydenko wrote on X that ownership and control over all resources in Ukraine's territory and its territorial waters will remain with Kyiv, and her country would determine "what and where to extract."
She said the deal does not affect privatization processes or the management of state-owned companies in Ukraine, noting that companies such as the country's oil and natural gas extracting company, Ukrnafta, and national nuclear energy provider, Energoatom, will remain under state ownership.
Svyrydenko said the deal includes no provision on Ukrainian debt to the US -- an issue Zelenskyy said Ukraine would not recognize as part of an agreement.
She said the deal is consistent with Ukraine's legislation and does not contradict Ukraine's international obligations, including Kyiv's EU integration process.
The text of the agreement does not mention security guarantees for Ukraine but defines the deal as "an expression of a broader, long-term strategic alignment" between the two countries.
The deal still has to be ratified by the Ukrainian parliament.
Investment fund
Svyrydenko provided details about the investment fund established, saying it is structured on a 50/50 basis and will be managed by the two countries.
Expressing that neither side will hold a "dominant vote" in the fund, Svyrydenko said the financing will be conducted exclusively from new licenses.
"Specifically, 50% of the revenues from new licenses in the field of critical materials, oil, and gas — generated after the Fund is created — will be directed to it," she said, adding that revenues from existing projects or those already accounted for in the budget will not be included.
The economy minister said the US will help attract additional investment and technology, and the fund is supported by Washington through the International Development Finance Corporation (DFC).
"This will assist us in attracting investments and technologies from U.S., EU, and other international partners that support Ukraine’s fight against the Russian aggressor," she said, noting that revenues from the fund and contributions to it will not be taxed in either country.
Svyrydenko said the US will contribute to it through direct financial contributions, but it can also provide "new assistance" such as air defense systems for Ukraine.
"Ukraine will contribute 50% of state budget revenues from NEW rent on NEW licenses for NEW areas. Ukraine may also make additional contributions beyond this baseline if it chooses," she said, adding that the fund may invest exclusively in Ukraine.
She also said the fund will then invest in extraction projects for critical materials, oil and natural gas, and related infrastructure.
"We expect that for the first 10 years, Fund profits and revenues will not be distributed, but instead reinvested into Ukraine -- into new projects or reconstruction. These terms will be subject to further discussion," she added.
