Why latest US resource deal is favourable for Ukraine? What both countries get | World News

Washington and Kyiv have finalised a landmark natural resources agreement, positioning US investment in Ukraine’s rare earth deposits as a strategic economic commitment — despite the absence of any security guarantees for Ukraine.The deal comes after delays caused tensions between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy, and signals a pivot from military aid to economic investment as the cornerstone of US-Ukraine relations.
Why was the deal signed?
Trump has long demanded that Ukraine compensate the US for past aid, reportedly seeking as much as $500 billion — far exceeding the $120 billion it provided, according to the Germany-based Kiel Institute.
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Zelenskyy rejected that proposal, declaring he would not sign a deal that “ten generations” of Ukrainians would be burdened with repaying.
Ukraine ultimately agreed to the new minerals-focused deal to secure long-term US involvement without accepting unsustainable debt. As Trump reduces America’s global security commitments, including efforts to block Ukraine’s NATO bid, Kyiv views this economic partnership as a lifeline.
According to Ukrainian officials quoted AP, the final version signed Wednesday was significantly more favourable than the original draft. Early versions, nearly signed in a tense Oval Office meeting with Trump, Vice-President JD Vance, and Zelenskyy, would have made Ukraine a junior partner and granted Washington broad extraction rights.
Economy Miner Yulia Svyrydenko said the revised deal reflects “mutually beneficial conditions” and respects Ukraine’s sovereignty. She noted that it recognises Ukraine’s past contributions to global security, including its decision to give up its nuclear arsenal.Story continues below this ad
The agreement must still be ratified the Ukrainian parliament, and Kyiv views it as a strategic move to tie continued American interest to Ukraine’s survival and prosperity.
How does the deal work?
The centrepiece is a joint Reconstruction Investment Fund, with both countries enjoying equal voting rights. According to Ukraine’s Prime Miner Denys Shmyhal, the fund ensures:

Full Ukrainian control over all subsoil, infrastructure, and resources.
No requirement to repay past US military and financial support.
10-year reinvestment clause, during which all profits will be spent inside Ukraine.
Funding will prioritise minerals, oil, gas, and related infrastructure, before profits can later be shared between the US and Ukraine.

The fund’s profits will be reinvested exclusively in Ukraine for the first 10 years, particularly in mining, oil and gas, infrastructure, and processing projects.
Ukraine will not be required to repay any debt for prior US support. Prime Miner Denys Shmyhal affirmed Ukraine would retain full control over its subsoil, infrastructure, and resources.Story continues below this ad
Svyrydenko noted the importance of innovation, saying: “The transfer and development of technologies is an important component of the agreement, because we need not only investments, but also innovations.”
She also confirmed that the deal would not interfere with Ukraine’s EU accession, a key concern in Brussels.
The US International Development Finance Corporation will anchor the fund, with Washington contributing direct capital and military equipment — including air defence systems — while Ukraine will funnel 50 per cent of all future profits from government-owned resources into the fund.
What resources is Ukraine offering?
Ukraine is rich in rare earths and critical minerals, holding:Story continues below this ad

Around 5% of the world’s mineral resources
Up to 20% of global graphite reserves, crucial for electric batteries
Major reserves of manganese, titanium, and untapped lithium
Six known rare earth deposits, including Novopoltavske, one of the world’s largest, requiring a $300 million investment

Ukraine holds an estimated 5% of the world’s rare earth elements, which are crucial for technology like smartphones, electric vehicles, and defence systems. The country also boasts 20% of global graphite reserves, large titanium and manganese supplies, and significant lithium deposits — including one at Novopoltavske, described as among the world’s largest.
However, much of Ukraine’s mineral wealth remains untapped, with some sites located in Russian-occupied territory. The lack of accurate geological data and decades of underdevelopment further hinder progress.
In 2021, as per reports AP, the mineral industry contributed 6.1% to Ukraine’s GDP and accounted for 30% of its exports. Yet around 40% of metallic resources are now in regions under Russian control, according to Kyiv-based think tank We Build Ukraine.
What does this mean for Ukraine’s security?
The agreement does not include any formal security guarantees, nor does it mention military aid or weapons.Story continues below this ad
The agreement gives the US a strategic economic stake in Ukraine’s recovery while avoiding new security obligations. It does not mention weapons or defense guarantees but does affirm that the US “supports Ukraine’s efforts to obtain the security assurances necessary to build a lasting peace.”
US Treasury Department used stronger-than-usual language, referencing Russia’s “full-scale invasion”—a departure from previous Trump-era language that framed the war more ambiguously.
Treasury Secretary Scott Bessent told Fox News: “It’s a signal to the Russian leadership. It’s also a signal to the American people that we have a chance to participate, get some of our… the funding and the weapons compensation for those.”
Secretary of State Marco Rubio called it a “very critical” step toward sustaining US-led efforts to end the war.Story continues below this ad
While lacking military guarantees, the deal represents a significant shift in US-Ukraine relations, tying long-term economic investment to Ukraine’s post-war reconstruction and resource development. The joint fund, control over national assets, and profit reinvestment all reflect Kyiv’s attempt to secure international backing without surrendering sovereignty or EU integration hopes.
(With inputs from Associated Press and BBC)