Kiev ratifies natural resources deal with US, easing tensions over aid

By Al Mayadeen English
Source: News websites
8 May 2025 17:53

Ukraine approves a landmark deal granting the US access to key natural resources, aligning with Trump’s strategy and boosting post-war reconstruction efforts.

Listen

Ukrainian parliamentarians vote for ratification of the Minerals Agreement between Ukraine and the United States at Verkhovna Rada in Kiev, Ukraine, on Thursday, May 8, 2025. (AP)

The Ukrainian parliament has ratified a significant agreement with the United States, solidifying President Volodymyr Zelensky’s efforts to rebuild ties with US President Donald Trump. The deal, concluded last week after extended negotiations, passed with overwhelming support, as 338 lawmakers voted in favor on Thursday, signaling strong political consensus in Kiev.

The newly ratified pact grants the US preferential access to Ukraine’s natural resource projects, marking a major shift in the country’s economic alignment.

Under its terms, Washington will benefit from licensing revenues tied to the future development of strategic Ukrainian assets, including aluminum, graphite, oil, natural gas, and other key mineral deposits. This deal is being positioned as a cornerstone of future cooperation on both economic and military levels.

Deal seen as part of Trump-Zelensky alignment

One of the key turning points in the negotiations was the US decision to drop its earlier demand for repayment of the billions of dollars in aid previously sent to Ukraine since the start of the Russian invasion.

The agreement is seen by officials in Kiev as a gesture of goodwill and a step toward “getting back into Trump’s good graces,” especially as Washington pushes for an end to the ongoing war.

The pact also includes a provision under which future US military assistance to Ukraine can be treated as contributions to a shared investment fund. This mechanism reflects a shift toward long-term economic cooperation and positions the US as a key stakeholder in Ukraine’s post-war reconstruction.

War damage, poor mapping stall US plans to mine Ukraine metals: WashPo

The US agreement securing rights to extract minerals in Ukraine has offered a diplomatic boost, yet its impact on the global race for critical metals used in weapons, electronics, and clean energy technologies is far from assured. As The Washington Post’s Evan Halper, a Washington-based business reporter covering the energy transition, noted earlier this week, the deal underscores the deep challenges facing US efforts to secure strategic resources amid geopolitical instability, aging data, and growing urgency to reduce reliance on China.

Citing logistical and economic barriers, industry specialists said it will take at least a decade to benefit the strained US supply chain. Shipments of titanium, graphite, and lithium lie far off. Experts said the deal does little to reduce short-term dependence on China’s dominant grip over mineral markets.

“This absolutely is not a solution to these immediate problems,” said Reed Blakemore of the Atlantic Council Global Energy Center. “It does not resolve any of the vulnerabilities we see related to China’s dominance over these supply chains in the short term.”

US gains rights, not momentum

The agreement, which includes a fund for Ukraine’s reconstruction, gives the US access to extract metals, oil, and gas. Profits would offset future military aid to Kiev. Yet, mining companies remain hesitant, citing minimal investment in identifying Ukraine's mineral assets.

Many are relying on outdated Soviet-era geological surveys, creating serious uncertainty, as per the piece. Ukraine is also not a recognized source of any of the 17 rare earth elements critical to US manufacturing, despite past claims.

Experts suggest oil and gas prospects are similarly unattractive. Infrastructure is lacking, and viable reserves lie in conflict zones. Alternative sources, such as Norway, Azerbaijan, or LNG imports from the US and Qatar, present safer options.

“There are a lot of factors that would make US companies cautious when it comes to oil and gas in Ukraine,” Ben Cahill of the University of Texas at Austin told The Washington Post. “I’m not convinced larger companies... will see this as a competitive place to invest.”

Processing: A bigger bottleneck

Processing, more than mining, is the real choke point in US mineral supply chains, experts say. Yet the US-Ukraine deal lacks any provision to develop processing capabilities.

“Processing minerals in Ukraine isn’t exactly convenient for US markets,” said Emily Holland of the US Naval War College, citing the country’s damaged infrastructure and lack of industrial capacity.

Earlier this year, Mining Journal likened Ukraine’s mineral claims to “Potemkin Villages.” Despite former President Trump’s reference to $500 billion in rare earths, experts say Ukraine doesn’t produce, and likely never will produce, those elements.

Still, some see strategic value. “It signals that the US is engaged in Ukraine’s economy as a strategic partner,” said Jay Truesdale, CEO of TD International. “There will be some positive investment gains that can accrue as a result of this."