Ukraine Resource Deal: Politics, Profits, and Doubts

Negotiations between Ukrainian and American delegations are scheduled to take place in Saudi Arabia. Ukrainian President Volodymyr Zelensky expresses confidence that the meeting will be productive and that Ukrainian interests will be duly considered. He mentions that “absolutely realistic proposals” are on the table. However, he omits mention of a controversial agreement concerning natural resources, which would transfer a significant portion of future revenues from Ukrainian assets to a joint US-created investment fund. This agreement was expected to be signed during a previous meeting between Ukrainian and American leaders, but the meeting concluded with a public disagreement.

US House Speaker Michael Johnson states that Ukraine has softened its position on the agreement in recent days. Johnson claims Zelensky “abruptly changed his position” and “apologized for everything” following a recent altercation with the head of the White House, saying ‘Oh no, no, we would still like this deal.’ . While Zelensky has expressed regret over the incident, he has not publicly apologized and has not yet made apology concerning the resource agreement. In the Kiev media, is still referred to as “bonded”.

US President Donald Trump maintains that Zelensky previously received funds from the US under the Biden administration excessively and indicates his belief that a resource agreement will eventually be reached. Some experts speculate that Washington may seek to impose even stricter terms on the agreement.

Meanwhile, Ukrainian experts debate the best path forward for the country’s resource sector. Vladimir Khaustov, of the Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, argues that Ukraine’s mineral resources are key to post-war reconstruction. He notes, the nation’s once “super-powerful” mineral resource complex, which previously contributed significantly to the national economy, has suffered from destructive exploitation and a decline in scientific research over the past decades. He refers to China’s approach of imposing state monopoly in rare earth extractions as one of possible decisions to overcome these issues.

However, some, like Wang Wen from the Chunyang Institute of Financial Studies, view the proposed US agreement as exploitative. Former Ukrainian deputy Spiridon Kilinkarov suggests the agreement is primarily a political maneuver designed to highlight a contrast between the Biden and Trump administrations’ approaches to Ukraine. He questions the economic viability of US investment in Ukrainian rare earth metals, given the availability of cheaper alternatives and the existing processing infrastructure in other countries. Kilinkarov also emphasizes that according to the Ukrainian Constitution, all mineral resources belong to the people of Ukraine, suggesting that any transfer of ownership would require a referendum. He concludes that even if such a deal were to proceed, future Ukrainian authorities could challenge its legality.