The US and Ukraine announced the creation of a new Reconstruction Investment Fund on Wednesday, formalizing an economic agreement between the two countries aimed at giving the US access to revenues from Ukraine's mineral reserves.
The agreement concludes months of negotiations on whether the US will continue to provide support to Ukraine as it seeks to mediate the end of a three-year war with Russia. The deal aims to provide Ukraine with an implicit security arrangement, addressing President Trump's concern that the US provided Kiev with a blank check to endure Russian invasions.
“The agreement clearly shows Russia that the Trump administration is committed to a peace process centered around Ukraine, where it has long been free, sovereign and prosperous,” the Treasury Department Scott Bescent said in a statement. “President Trump envisioned this partnership between the American people and the Ukrainian people to demonstrate both sides' commitment to Ukraine's lasting peace and prosperity.”
He added: “To be clear, the states or supplies that fund or supply Russian war machinery will not be permitted to benefit from the reconstruction of Ukraine.”
As the Trump administration did not immediately provide details about the agreement, it was not clear what it would mean for the future of US military support for Ukraine. Despite fanfare, if you are fighting between Ukraine and Russia, the deal makes little sense.
The announcement did not mention Ukrainian minerals, but a spokesman for the Ministry of Finance said the deal referred to a natural resource agreement that was negotiated.
The Treasury Department said the US International Development Finance Corporation will work with Ukraine to finalize details of the agreement.
In Telegram's mail, Ukrainian Prime Minister Dennis Schmichal wrote that the two countries have equal voting rights for the fund, and that Ukraine maintains full control of its subsoil, infrastructure and natural resources. He also said that profits from the investment fund will be reinvested in Ukraine.
“The agreement will allow us to attract key resources for reconstruction, launch economic growth and receive the latest technology from our US partners and strategic investors,” Schmihal said, according to a translation of his post.
The deal was delayed after an explosive meeting at the Oval Office between President Trump and Ukrainian President Volodimia Zelensky in late February. Two months later, the main sticking point of negotiations focused on whether the US aid given to Ukraine would be treated as a debt that Ukraine needs to pay back since Russia began a full-scale invasion in February 2022.
Trump said Ukraine should pay back the money. Ukrainian officials said agreeing to do so would punish the country financially for generations.
Ukraine initially proposed that the United States should draw out American investment in Ukrainian mining as an incentive to support a peace agreement on security guarantees to prevent future Russian aggression.
However, talks over the transaction have been controversial since their launch in February. In addition to saying Ukraine needs to repay the US for its help, Trump also said Ukraine should look to Europe rather than the US for security.
The previous draft was spinning between what critics called Ukrainian brave terror by the Trump administration and the version that includes the points Ukraine is hoping for. Without them, Russia could soon infringe on a ceasefire or resume war after reorganization, Ukraine says.
Trump and Zelensky intended to sign a contract at the White House in February. But instead of signing it, Trump and Vice President JD Vance denounced the Ukrainian leader in front of television cameras, saying they were not fully grateful for our support. Zelensky was asked to leave.
The Trump administration then temporarily suspended all Ukraine's aid and information sharing provision. Trump said Zelensky should be “more grateful” to resume negotiations.
The next day, Zelensky called the Oval Office meeting “remorse.”
Some people both within and outside of Ukraine see the US as merely using Ukraine's dependence on American weapons and financial support to gain control of valuable natural resources. American negotiators say US investment will thwart future attacks.
In a memorandum of understanding signed on April 16th of its intention to enter into a transaction, Ukraine and the United States outlined the agreement to establish a fund for investment in postwar reconstruction.
In addition to opening up opportunities for US companies in mining, oil or natural gas, the fund can take steps to rebuild operations and is expected to become a multi-billion dollar business for American companies if they reach a ceasefire.
However, Zelensky made it clear that the mineral agreement is not an objective in itself. To put the deal together, he said, is aimed at clearing methods for more consequential consultations on US military support and the conditions for the potential ceasefire with Russia.
“We see this agreement as a step towards improving security and solid security assurances, and we really hope it works effectively,” Zelensky said in a post on X.
Ukrainian authorities say the country holds deposits of more than 20 important minerals. One consulting firm rated them as worth trillions of dollars. However, they may not be easy to extract. Furthermore, during the Soviet era, we never outlined places where important sediments have never been modernized, nor did we thoroughly examine everything.
Ukraine currently makes around $1 billion a year from natural resource royalties, and Trump said he expects the US to get from the agreement.
Revenue sharing transactions come at a dangerous moment for Ukraine. Russian troops seized advantages on the battlefield, and Trump approached Russia's President Vladimir V. Putin.
The ceasefire agreement proposed by the US – at least the terms published, support Russia. It will be forced to abandon Kiev's desire to join NATO, and Ukraine will only offer ambiguous security guarantees, and we will see the US officially acknowledge Crimea as a Russian. Ukraine refused the deal.
The Trump administration has repeatedly threatened to leave peace talks. On Sunday, Trump said he hopes to get a ceasefire contract within two weeks. Later he said that he might accept a little more time.
But Trump also argues that he needs to sign a mineral trade. On Friday, he said Ukraine was at least three weeks behind signing a mineral agreement with the US.
There was some uncertainty about the deal on Wednesday as Ukrainian officials arrived in Washington and showed they were seeking some late changes.
At a cabinet meeting at the White House, Bescent expressed optimism that he said the agreement he said he reached in principle over the weekend would soon be signed.
“The Ukrainians decided to make last minute changes last night,” Becent said. “I'm sure they'll rethink that, and we're ready to sign this afternoon if they do.”
Cassandra Vinograd, A certain mejito and Oleksandra Mykolyshyn Reports of contributions.
