Ukraine agrees to US minerals deal amid drop of toughest demands: FT
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The agreement remains a framework and requires approval from Ukraine's parliament amid unresolved issues.
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Ukrainian President Volodymyr Zelensky answers media questions during his press conference in Kiev, Ukraine, on February 23, 2025. (AP)
Kiev has reached an agreement with Washington on a minerals deal, which Ukrainian officials think would improve ties with the Trump administration and open the way for a long-term US security commitment.
Ukrainian authorities said Kiev is now ready to sign an agreement to jointly develop its mineral resources, including oil and gas, after the US abandoned demands for a $500 billion share of potential revenue from resource extraction.
The authorities claimed that they had negotiated significantly more favorable conditions and portrayed the agreement as a means of strengthening relations with the US in order to strengthen Ukraine's prospects following three years of war.
Olha Stefanishyna, Ukraine’s deputy prime minister and justice minister who has led the negotiations, told the Financial Times Tuesday that the agreement is "only part of the picture. We have heard multiple times from the US administration that it’s part of a bigger picture."
The initial draft's onerous provisions, billed by Trump as a way for Ukraine to reimburse the US for military and financial help since the war began, sparked uproar in Kiev and other European capitals.
The final form of the deal, dated February 24 and reviewed by the FT, would create a fund to which Ukraine would contribute 50% of the revenues from the "future monetization" of state-owned mineral resources, including oil and gas, and associated logistics. The fund plans to invest in Ukrainian projects.
It excludes mineral resources that currently contribute to Ukrainian government coffers, implying that it does not include the current operations of Naftogaz or Ukrnafta, Ukraine's main gas and oil companies.
However, the accord makes no mention of US security assurances, which Kiev had previously demanded in exchange for consenting to the arrangement. It also leaves important matters like the size of the US interest in the fund and the terms of "joint ownership" arrangements to be resolved in subsequent agreements.
Ukrainian authorities claimed the contract had been authorized by the justice, economics, and foreign ministries, and Volodymyr Zelensky might visit the White House in the coming weeks for a signing ceremony with Trump.
One official stated it would be a chance to "discuss what the bigger picture is. And then after it, we will be able to think of the next steps."
The Trump administration's initial proposal for a reconstruction fund, which required Ukraine to contribute 50% of its mineral extraction revenues up to $500 billion, was deemed unacceptable by Ukraine and was removed from the final draft, which now includes US support for Ukraine’s long-term economic development.
Ukrainian officials clarified that the deal is a "framework agreement", and no revenues will be exchanged until the fund is established, giving time to resolve any disagreements, including the agreement's jurisdiction.
Zelensky's government will also need approval from parliament, where opposition MPs are expected to fiercely debate the deal before ratification.
