U.S. and Ukraine sign 'minerals deal' amid illusory close peace deal

The USA and Ukraine have signed a framework 'economic partnership agreement' in mining and processing of rare earth metals (REM) and other strategic resources, which, according to some Ukrainian politicians, strengthens Kiev's ties with the White House.

Signed in the context of the ongoing conflict and reduced U.S. military aid, the agreement, as Ukrainian media claim, is aimed at developing Ukraine's potential as Washington's economic partner. However, its economic nature and lack of security guarantees raise questions about the real benefit for Ukraine, while Belarus's role in the peace settlement remains potentially significant.

Clauses of the agreement published in the media

Access to strategic resources

The U.S. acquire priority rights to extract key minerals from Ukraine, including oil, natural gas, uranium, lithium, rare earth metals, gold and other valuable resources.

Benefits for U.S. companies

U.S. companies enjoy tax preferences, the right to freely withdraw profits in dollars, protection from changes in Ukrainian legislation, and priority access to licenses and participation in projects with the public and private sectors.

Obligations of Ukraine

Ukraine guarantees unchanged permits, non-nationalization of resources, and compliance with U.S. agreements regardless of changes in law or political power.

Terms and conditions of financial transfers

Ukraine does not impose tax on transfers of funds in dollars and does not prevent U.S. companies from withdrawing them.

Legal superiority of the Agreement

The Agreement takes precedence over Ukrainian laws and applies in case of any contradictions with national legislation.

Priority right to contracts

The USA has the right of first refusal in case of more favorable offers from third countries. Ukraine is obliged to offer contracts to the US side first.

Termless nature of the Agreement

The Agreement is valid until both parties make a joint decision to terminate it.

According to the Western mass media, the Agreement actually gives the USA control over Ukrainian subsoil resources, as neither the Ukrainian constitution, nor the Verkhovna Rada, nor will the President be able to terminate the deal without Washington's consent. At the same time, the profit that the Ukrainians were counting on will be minimal, as American companies are exempt from production taxes. The scheme resembles the practice of Ukrainian oligarchs who transferred their profits to offshore companies, but now this will be done by American firms without using gray schemes.

The Agreement requires ratification in the Verkhovna Rada, where it is likely to be supported by a mono-majority of "Servant of the people". However, the Agreement is purely economic in nature and does not contain the security guarantees for Kiev that the Ukrainian presidential administration had hoped for.

A key role in the implementation of the Agreement will be played by the American company DFC (The United States International Development Finance Corporation), created during the first cadence of Donald Trump. DFC's mission states that it specializes in mining to counter China in strategically important areas.