President Donald Trump and Ukrainian President Volodymyr Zelenskyy are set to sign a mineral deal Friday. (AP/Julia Demaree Nikhinson)
Unlike an earlier iteration of the deal, the newest version, approved by the Ukrainian Cabinet on Wednesday, establishes a fund with joint U.S.-Ukraine ownership instead of 100% U.S. ownership.
Ukraine’s Prime Minister Denys Shmyhal said Wednesday Ukraine would be funneling half of its revenues from future oil, gas and mineral projects into the fund, with some of that money being reinvested for more development. The deal would exclude existing natural resources projects.
The deal says that once both sides sign on to the initial framework, negotiations will begin on a "subsequent agreement" on who will control how much of the fund and its operation.
The U.S. initially demanded Ukraine offer $500 billion worth of its rare earths and other minerals as back payment for about $185 billion in aid. The latest versions of the deal do not include a concrete figure for how much of the mineral revenues the U.S. would receive or the size of the stake the U.S. would hold in the fund.
At a Wednesday news conference, Zelenskyy still said his country would not be repaying the U.S. for any of the aid that has already been allocated.
"I will not accept (even) 10 cents of debt repayment in this deal. Otherwise, it will be a precedent."
But Trump seemed satisfied with the latest negotiations.
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"We’re doing very well with Russia-Ukraine. President Zelensky is going to be coming on Friday. It’s now confirmed, and we’re going to be signing an agreement," he said Wednesday.
The agreement has little in the way of details on how the U.S. would benefit financially.
"Perhaps U.S. companies will be contracted to do all the work of extraction, and could make big profits that way; perhaps the U.S. government would award itself an annual sum from the fund; or perhaps there would be a stipulation that U.S. companies could purchase the minerals at discounted rates," explained Peter Harris, a political science professor at Colorado State and fellow at restraint-minded group Defense Priorities.
But rare earth mining is a long and arduous process. "It could be decades before anyone makes a dime from Ukraine's untapped natural resources," said Harris.
Putin has offered U.S. mineral access in Russia. (Sputnik/Mikhail Metzel/Pool)
Ukraine controls over 100 major deposits of critical minerals, according to the Kyiv School of Economics, along with some oil and gas reserves. Its reserves hold titanium, lithium, graphite, rare earths and other minerals key to the energy and tech sectors.
Trump wants revenues from the minerals as repayment, but he could also be looking to break China's monopoly on the rare earth metals used in phones, solar panels and other electronics.
Putin, meanwhile, said he is open to offering the U.S. access to rare minerals, including those from Russia's "new territories" – those captured in its war on Ukraine.
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He said a U.S.-Ukraine mineral deal is not a concern and Russia "undoubtedly has, I want to emphasize, significantly more resources of this kind than Ukraine," in televised remarks.
"As for the new territories, it's the same. We are ready to attract foreign partners to the so-called new, to our historical territories, which have returned to the Russian Federation," he added.
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