The Guardian writes: “The US and Kiev have signed an agreement to share profits and royalties from the future sale of Ukrainian minerals and rare earths, sealing a deal that Donald Trump has said will provide an economic incentive for the US to continue to invest in Ukraine’s defense and its reconstruction after he brokers a peace deal with Russia.”
The Guardian further explains that the US Treasury Secretary Scott Bessent said “This 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,”.
The Guardian writes: “The Ukrainian prime minister, Denys Shmyhal, said that the fund would be split 50-50 with between the US and Ukraine and give each side equal voting rights.
Ukraine would retain “full control over its mineral resources, infrastructure and natural resources,” he said, and would relate only to new investments, meaning that the deal would not provide for any debt obligations against Ukraine, a key concern for Kyiv. The deal would ensure revenue by establishing contracts on a “take-or-pay” basis, Shmyhal added.”
As it was since the beginning of talks about the Minerals Deal, Ukraine gets lost in public interpretation of what has been agreed or not. Asblong as the full text of the Deal is kept secret, the public cannot evaluate the interpretations of that Deal.
Trying to understand the Ukrainian PM, it seems that his view is that the Deal does not pay for any Ukrainian past debts to the US. But Trump just intended this with the Deal: to get reimbursed for the war spending upto today.
Now, Ukraine’s public interpretation is that the US would be just like any foreign investor entering into (a more formal) public private partnership with the US and the US would send many more billions to Ukraine to pay for investments into hopefully profitable resources and infrastructure. Ukraine calls it reconstruction.
Why should an US investor get into risks in Ukraine and be bound to a government of which the actions and turn-arounds are know with long tiresome experience? Ukraine is not a place for business, unless one is an oligarch with criminal power base: many Western investors have experienced this for long. The Minerals Deal will not change this. And the past experiences of foreign businesses in Ukraine have not been satisfactory, a contract often is not worth the paper it is written on. Power is all in Ukraine, and power is the only distributor of wealth.
If the US would like to substitute Ukrainian oligarchs in the distribution of wealth will be interesiting to see. It is a difficult and long-lasting and even dangerous endeavor … where Russia has long and extensive experience in Ukraine. The outcome may be that Russia, over time and after peaceful approaches to new and old Ukrainian elites, will get an economic position in Ukraine, more powerful than the US in the competition about the redistribution of wealth.
As consequence, the Minerals Deal, which still needs to be ratified by the Ukrainian Parliament, may not be as reassuring as The Guardian thinks. The Deal may certainly not be an instrument of defense for Ukraine. And until it will create returns on investments, if ever, the Deal may remain pretty theoretical with many different ways of interpretation.
And also: are there any resources available for the US, or are they already all gone prior to engagement?
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