The agreement creates an investment fund managed by Washington and Kiev, which oversees all new natural resource projects in Ukraine.
The new resource development agreement between the US and Ukraine allows the two countries to jointly invest in natural resource projects over the next decades.
A US Treasury official said at a press conference on May 1 that the newly signed key mineral trade between Washington and Kiev applies not only to rare earth metals, but also to almost all natural resource developments in Ukraine, including oil, natural gas and related infrastructure.
“This isn’t just rare earth (or) important minerals, but it also includes oil and gas, as well as natural resources-related infrastructure to acquire a complete value chain related to Ukraine’s economic development,” one Treasury Secretary said.
The purpose of this transaction aims to generate substantial profits for both countries by establishing an investment fund that will return royalties, licensing fees and related costs from all new natural resource projects in Ukraine to joint companies held equally by Ukraine and the US.
This setup will make the United States a key beneficiary of the reconstruction process in Ukraine, where the ongoing Russian invasion ends, and wipe out investment opportunities for the country for decades while encouraging a massive reconstruction of war-torn Ukraine.
“The idea that the money coming into the fund will be reinvested to increase the value of the fund, the US and Ukraine and generate long-term benefits for both Americans and Ukrainians,” the official said.
Overall, the transaction consisted of three separate legal documents, with both President Donald Trump and Treasury Secretary Scott Bescent having personal hands in negotiations.
The first document is a legal agreement between Ukraine and the United States that establishes the obligations of the parties in a joint partnership. Now it must be ratified by the Ukrainian Parliament.
Other documents include limited partnership agreements to prepare the LLC fund and establishment materials to control the fund and its investments.
According to a fact sheet shared by the White House with the Epoch era, the partnership will be managed by a company managed by three Ukrainians and three American boards.
The board works together to determine how fund resources are allocated, new investments to prioritize, and when to distribute payments to the two governments.
The US also retains the privilege of providing new opportunities for American companies and deciding which companies should receive them.
“If the US decides to acquire these resources for ourselves, we are given the first choice of getting them or specifying the buyer of our choice,” the fact sheet reads.
The framework also gives the US the opportunity to prevent the enemy from gaining Ukrainian foothold by taking over new developments before foreign actors can.
“The states, companies or funding that fund or supply Russian war machinery are not permitted to benefit from the reconstruction of Ukraine, including participation in projects supported by fund resources,” the fact sheet reads.
Similarly, one Treasury official said in a press conference that the new long-term economic interests in Ukraine were guaranteed that Washington has committed to Ukraine’s sovereignty and was partially taken to “responding to massive destruction caused by Russian full-scale invasion.”
“This partnership will be fundamental to the peace process that the president is leading, as it sends a strong message to Russia that the US is in the game and is committed to Ukraine’s long-term success,” the official said.
Nevertheless, this deal is not something Trump said he would pursue when he began negotiations with Kiev at the beginning of the year.
The final transaction signed this week does not include any of its languages and does not require Ukraine to liability for new debts.
But in the long run, the investment structure of the transaction could bring much more than Trump’s original proposal has. Therefore, one Treasury Secretary said the novel framework of the contract could be used as a template for future international investment transactions.
This “fundamentally changes the pattern of international financial agreements,” the official said, “can be a model for international economic agreements.”
