US seeks strategic grip on Ukraine's mineral investments

The agency obtained a draft of the new version of the US-Ukraine agreement, which indicates that the Trump administration is demanding a "right of first offer." If this agreement were to be established in its current form, it would represent an unprecedented economic expansion of U.S. influence in the largest territorial country in Europe, at a time when Ukraine seeks closer ties with the EU.

The agreement would give the U.S. preferential access to profits that would be transferred to a special investment recovery fund controlled by Washington. Importantly, the document states that the U.S. considers the "material and financial benefits" provided to Ukraine since the full-scale Russian invasion in February 2022 as its contribution to this fund. This would mean the White House expects Ukraine to repay all U.S. military and economic support given since the start of the war before Kyiv can earn any income from the partnership fund, as reported by Bloomberg.

American officials delivered the revised agreement to Kyiv at the end of last week. Previously, the White House had indicated that the administration is extending beyond the previously negotiated terms, which included rare earth metals in Ukraine. Discussions between both sides are ongoing, and the final draft may be subject to amendments. Ukraine is anticipated to respond with its own amendments this week, according to a person familiar with the matter who spoke to Bloomberg News.

The full agreement proposed by the U.S. requires "detailed study," and the conditions are continuously changing through negotiations, Ukrainian President Zelensky said Thursday to journalists in Paris, where he attended a summit with European leaders. Although it is too early to declare that an agreement has been reached, he stated, "we support cooperation with the US, we don’t want to give a single signal that can prompt the US to stop aid to Ukraine."

The United States remains committed to quickly reaching an agreement and ensuring lasting peace for both Ukraine and Russia, stated a spokesperson for the U.S. Treasury Department in response to a request for comment.

Ukraine was granted candidate status for the EU in 2022 and is set to begin talks for full membership. If the U.S. were to effectively control investment decisions across large areas of the Ukrainian economy, it could likely complicate the situation even further. Previously, Ukraine asserted that an agreement with the U.S. cannot contradict its association agreement with the EU. It also rejected U.S. pressure to include Washington's past support as a contribution to the joint fund.

According to the draft document, the U.S. International Development Finance Corporation (DFC) would control the investment fund by appointing three out of five board members and obtaining veto rights, granting the ability to block certain decisions. Ukraine would appoint the remaining two members and would not have a say in the daily management of the fund. The government in Kyiv would be required to contribute 50% of its revenues from all new natural resources and infrastructure projects to the fund. According to the draft, the U.S. would have rights to all profits plus a 4% annual return until the investments are recouped.

Ukraine would be required to submit all projects to the fund for review "as early as practicable," and the DFC would gain seats on the board or oversight of all funded programs. Kyiv would not be able to offer rejected projects to other parties on "materially better" terms for at least a year.

Furthermore, the U.S. government would have the right to purchase Ukrainian metals, minerals, oil, and gas before other parties on commercial terms, regardless of whether the fund financed the project. The agreement has no specified time limit. According to it, Kyiv would not have the right to sell these minerals and would also be prohibited from selling critical minerals to countries that are considered "strategic competitors" of the U.S., Bloomberg reported.