By Serhii Kolisnyk, Attorney at Law; Head of the LOBBY CLUB Kyiv Office; Associate Professorof National Academy of Internal Affairs; Ph.D. in Law, with over 15 years of experience in human rights protection.
U.S.-Ukraine Minerals Deal: Implications for Ukraine"s Economy and Investment Climate
Ukraine and the United States have outlined a landmark Minerals Deal aimed at jointly developing Ukraine"s rich natural resources – ranging from rare earth elements to oil and gas – in exchange for funding Ukraine"s reconstruction (Mapping Ukraine"s mineral deal with the US). Announced as a preliminary framework agreement in late February 2025, the deal would see Ukraine allocate a portion of its future resource revenues to a U.S.-linked fund, with the goal of attracting American investment and support. From Kyiv"s perspective, this agreement is both a strategic economic opportunity and a subject of cautious scrutiny.
(Mapped: Ukraine"s Mineral Resources) Ukraine"s mineral wealth map, highlighting key deposits and areas under Russian occupation. The country claims to have nearly $15 trillion in mineral resources, including Europe"s largest deposits of lithium, uranium, and titanium). This immense resource base underscores the appeal of Ukraine"s mining sector to international investors, although a significant portion lies in territories currently occupied by Russia, complicating their development.
U.S.-Ukraine Minerals Deal: Framework and Key Details
The U.S.-Ukraine Minerals Deal is centered on the creation of a Reconstruction Investment Fund jointly managed by both countries. Under the draft terms, Ukraine will contribute 50% of the revenues from the future development of its state-owned natural resources into this fund, which will reinvest those funds back into Ukraine (Mapping Ukraine"s mineral deal with the US). In practice, this means revenue from Ukrainian minerals, hydrocarbons, oil, and gas would be split – half going into Ukraine"s state budget as usual, and half funneled into the new joint fund. The United States, for its part, is expected to make a long-term financial commitment to support the fund and Ukraine"s post-war economic recovery. Notably, representatives from both nations will co-manage the fund, overseeing investments into Ukrainian infrastructure, industries, and enterprises to promote "the safety, security and prosperity of Ukraine". This collaborative structure is intended to ensure transparency and effective use of the money, while also giving the U.S. a direct role in Ukraine"s reconstruction projects.
One of the driving forces behind the U.S. interest in this deal is Ukraine"s vast reserves of critical minerals. Ukraine claims to hold around 5% of the world"s mineral resources, valued at nearly $15 trillion, including some of Europe"s largest known reserves of lithium (vital for batteries), titanium (used in aerospace and defense), and uranium. It also has significant deposits of graphite, manganese, iron ores, beryllium, and rare earth elements – 23 of the 50 minerals deemed critical by the U.S. government for high-tech and defense industries. For years, this natural wealth remained largely untapped due to underinvestment and regulatory hurdles, a situation worsened by the ongoing war. Industry experts caution that it could take years for investors to realize profits from these resources given the damage and disruption caused by conflict and chronic underinvestment. Still, the sheer scale of Ukraine"s resource base – Kyiv officials speak of "trillions of dollars" in untapped minerals – makes it a powerful magnet for foreign investment, provided the right conditions and security are in place.
Under the framework agreement, the United States gains a stake in Ukraine"s resource development in return for its financial support, but the deal pointedly does not include explicit U.S. security guarantees for Ukraine (No Security, No Deal: Ukraine Links Rare Earth Agreement to US Guarantees). This omission has been a focal point of debate in Ukraine. President Volodymyr Zelensky and his government have pushed for tying the economic agreement to concrete security commitments, reflecting a concern that Ukraine should not relinquish valuable revenue without assurances of protection or political support. In fact, Prime Minister Denys Shmyhal insisted that Ukraine "will not sign" the rare earth and minerals agreement unless it acknowledges security guarantees – a demand that shaped the negotiations. The compromise found was largely in symbolic language: the deal"s preamble affirms the U.S. desire to invest in a "free, sovereign and secure" Ukraine and even references the 1994 Budapest Memorandum, which memorialized Ukraine"s surrender of its nuclear arsenal in exchange for international security assurances. However, no binding defense clause was ultimately included, beyond U.S. promises to support Ukraine"s efforts in obtaining security guarantees from others. In essence, Ukraine is agreeing to share a significant portion of its future mineral revenues with the U.S.-backed fund without a direct security guarantee in return – a reality that has raised both eyebrows and concerns in Kyiv.
The structure of the deal also brings up questions about economic sovereignty and implementation. By committing 50% of state resource revenues to a foreign-partnered fund, Ukraine is effectively earmarking a large share of its natural wealth for joint management. Officials argue this ensures funds will be reinvested into Ukraine"s reconstruction rather than potentially misused or lost to corruption, as the fund will be under dual oversight. Yet some critics in Ukraine worry about losing full control over strategic assets. The initial negotiating process fueled these worries: at one stage, Washington had reportedly demanded a claim on $500 billion worth of Ukraine"s resource revenues as "compensation" for past aid. Such a steep ask – far exceeding the aid Ukraine actually received – was dropped from the final terms, but it exemplified the pressure Kyiv faced and why many Ukrainians are cautious. The agreed 50% revenue share is seen by the government as a more balanced arrangement, converting what could have been a one-sided "repayment" scheme into a cooperative investment mechanism. Still, Ukraine will need to carefully manage this partnership to ensure it truly serves the national interest. Details like how the fund will operate, what specific projects it will finance, and how "contributions" are calculated remain to be finalized in a subsequent agreement (The full text of the Ukraine-US Minerals Agreement | European Pravda) (The full text of the Ukraine-US Minerals Agreement | European Pravda). Legal analysts note that clarifying these mechanisms will be crucial for transparency and to avoid disputes down the line. In summary, the Minerals Deal offers a framework for U.S.-Ukraine economic cooperation on an unprecedented scale, but its success will depend on prudent implementation and maintaining a fair balance between both partners.
Ukraine is open for International Investment
The Minerals Deal comes as Ukraine signals that it is open for international investment on a broad front. Despite the devastation of war, Ukraine"s economy has shown resilience: after a 28.8% GDP plunge in 2022, the economy rebounded by about 5.3% growth in 2023 (Ukraine War Economy Tracker — Centre for Economic Strategy). Foreign investors are cautiously returning – in fact, FDI (foreign direct investment) inflows jumped to $4.2 billion in 2023, a sharp rise from only $557 million the year prior (Foreign direct investment (FDI) in Ukraine — International Trade Portal). This rebound reflects renewed confidence as businesses adapt to the conflict and see potential in Ukraine"s eventual recovery. The government in Kyiv is actively courting overseas capital, seeking to attract as much as $400 billion in foreign investment across sectors like technology, agriculture, clean energy, defense, metallurgy and natural resources. Key economic reforms and anti-corruption measures are being pursued to improve the investment climate, and special incentives are on offer to those willing to invest in Ukraine"s reconstruction.
That said, Ukraine"s business environment remains complex. The war has undoubtedly deteriorated the business climate, bringing insecurity, supply chain disruptions, and infrastructure destruction that led to capital outflows and higher risks for investors. Recognizing these challenges, Ukrainian authorities have created institutions such as UkraineInvest to facilitate foreign investment and are working to streamline regulations. The country has also begun overhauling its judiciary and governance frameworks to align with EU standards – moves aimed at reassuring investors of the rule of law. As of late 2024, the composition of foreign investment in Ukraine shows room for diversification: the largest share of FDI stock comes from European sources (Cyprus and the Netherlands alone account for nearly half, partly due to financial structuring), while the United States accounts for only about 5% of the total invested stock. Deals like the U.S.-Ukraine Minerals Deal could mark a change in this landscape, potentially boosting the U.S. share of investment and encouraging other international partners to follow suit. For Ukraine, demonstrating that it can host major international projects successfully – even amid adversity – is key to unlocking further capital inflows. In this sense, the Minerals Deal is not just an isolated agreement, but a litmus test for Ukraine"s openness and attractiveness to global investors.
Mutually Beneficial Economic Prospects
If executed prudently, the U.S.-Ukraine Minerals Deal holds mutually beneficial prospects for both countries. For Ukraine, the partnership promises an influx of funding and expertise to help modernize its extractive industries and rebuild its economy. The joint Reconstruction Fund means a portion of Ukraine"s own resource wealth will be reinvested into critical infrastructure, energy projects, and industrial capacity at home, multiplying the impact of each dollar earned. American involvement can bring advanced technology, management know-how, and global market access to Ukraine"s mining sector, which could accelerate the development of everything from lithium mines to oil fields. In the long run, tapping into these resources could significantly boost Ukraine"s export revenues and industrial output. Estimates suggest Ukraine has deposits of 22 out of 34 minerals deemed critical by the EU, and unlocking this potential could transform it into a major supplier of high-demand materials. For example, Ukraine holds about 18.6 million tonnes of graphite reserves (roughly 6% of global reserves), a mineral essential for batteries and electronics, and has Europe"s largest confirmed lithium reserves at around 500,000 tonnes. Developing such assets with U.S. partnership can help integrate Ukraine into Western supply chains for EV batteries, aerospace components, and renewable energy technologies. Beyond the numbers, a successful collaboration would deepen U.S.-Ukraine economic ties, potentially strengthening political ties as well. It could signal to other allies and private investors that Ukraine is a viable investment destination, catalyzing further economic support. In short, Ukraine stands to gain not only direct investment but also a more innovative, diversified, and connected economy.
For the United States, the appeal of the deal is equally clear. It offers the U.S. a foothold in a resource-rich market and a means to diversify its supply of critical minerals away from overreliance on China. Currently, the U.S. is heavily dependent on imports for rare earth elements and other critical materials – about 70% of U.S. rare earth imports came from China in recent years, and the U.S. has limited domestic mining and processing capacity. By investing in Ukrainian resource development, the U.S. can secure alternative sources for elements like rare earths, graphite, and titanium, which are vital for electronics, electric vehicles, defense systems and more. This aligns with Washington"s strategic goal of reducing China"s grip on supply chains for high-tech and defense industries. Economically, U.S. companies could benefit from contracts and joint ventures in Ukraine"s mining, energy, and engineering projects arising from the fund. The arrangement may also create new export markets for U.S. machinery, mining equipment, and financial services, as Ukraine rebuilds. Furthermore, the U.S. sees a geopolitical upside: by helping stabilize Ukraine through economic growth, it contributes to regional security in Eastern Europe. The deal could thus be a win-win: Ukraine harnesses its natural wealth to fuel recovery, while the U.S. gains a reliable partner for critical raw materials and reaffirms its influence in the country"s post-war reconstruction. Both nations would share in any future prosperity generated – a true partnership rather than one-off aid. However, these rosy outcomes depend on maintaining trust and fairness in the deal"s implementation, and ensuring that profits and benefits are shared equitably.
It is important to temper expectations with a dose of realism. The Minerals Deal is at an early "framework" stage and faces practical hurdles before these economic prospects can be realized. Security remains the elephant in the room: active conflict or the risk of renewed aggression by Russia could deter investment and delay projects in extraction zones. A significant portion of Ukraine"s mineral deposits (for instance, parts of the Donbas region rich in certain ores) are in or near conflict areas, making them inaccessible until peace is secured. Additionally, rebuilding the necessary infrastructure – from railways and roads to export terminals – will require time and massive capital, even with fund support. There"s also the question of absorbing new investment: Ukraine"s government will need to continue improving governance, fighting corruption, and strengthening institutions so that funds are managed effectively. Missteps on those fronts could scare off investors or lead to misuse of resources. On the U.S. side, sustained political will is required – future U.S. administrations or Congress must honor financial commitments to the fund and resist isolationist temptations to withdraw, otherwise the partnership could falter. Moreover, global markets for commodities are volatile; should prices for lithium or other minerals slump, the projected "trillions" in value might not materialize as hoped. In sum, while the economic logic of the deal is sound, execution risks remain. Both Ukraine and the U.S. will need to navigate these challenges carefully to truly reap the mutual economic benefits on offer.
LOBBY CLUB: Facilitating International Business Ventures
Organizations like LOBBY CLUB play a crucial role in turning plans into reality. LOBBY CLUB is an international platform founded in Ukraine, modelled after leading business and lobbying clubs in the United States and United Kingdom.
As the head of the Ukrainian office of LOBBY CLUB, I personally observe how essential comprehensive support is for foreign investors and businesses in Ukraine. Our mission is to guide international projects at every stage – from negotiations in the boardroom to construction sites – providing legal, investment, and media support.
We help companies navigate legislation, obtain necessary licenses, protect intellectual property, and comply with regulatory requirements. Additionally, we facilitate dialogue between investors and Ukrainian authorities, as well as between American businesses and Ukrainian regulators.
Moreover, we assist investors in finding reliable Ukrainian partners and projects, conducting due diligence, and structuring investments to ensure success.
Conclusion
The U.S.-Ukraine Minerals Deal represents a bold and unprecedented chapter in U.S.-Ukraine economic cooperation. From the Ukrainian viewpoint, it offers a lifeline to rebuild and modernize the economy by harnessing the country"s vast natural resource wealth with American partnership. The deal could unlock billions in investments, create jobs, and solidify Ukraine"s place in critical global supply chains. Equally, it embodies significant trade-offs and challenges: Ukraine is pledging a sizable share of its future national wealth and must do so without compromising its sovereignty or security. The absence of firm security guarantees in the agreement is a point of contention, and it places the onus on Ukraine to trust in long-term U.S. goodwill and on diplomatic efforts outside the deal to bolster the country"s defense. For international investors, the Minerals Deal is a signal that Ukraine is open for business at the highest levels, willing to structure creative partnerships to attract capital. It underscores both the opportunities (an untapped multi-trillion-dollar resource base, a reconstructive boom, strategic geopolitical importance) and the risks (war, political uncertainty, execution complexity) of investing in Ukraine.
On balance, the tone from Kyiv is one of cautious optimism. The government acknowledges the vast opportunities the agreement could unlock – in financing reconstruction, accelerating economic growth, and cementing a strategic alliance with the U.S. – while also being frank about the challenges of implementation and the need to safeguard Ukraine"s interests. A neutral, objective assessment suggests that the Minerals Deal, if carried out with transparency and care, could be transformative for Ukraine"s economy, potentially turning the nation into a critical minerals powerhouse and reconstruction success story. But success will require continual vigilance: maintaining a balanced partnership with the U.S., upholding strong governance practices, and ensuring that the benefits are felt by Ukraine"s people. International investors watching this space should take note of the due diligence being exercised. The deal"s evolution will serve as an indicator of Ukraine"s broader investment climate – its ability to execute complex agreements, honour commitments, and navigate the fine line between welcoming foreign investment and preserving national sovereignty. In the coming years, the U.S.-Ukraine Minerals Deal could very well become a cornerstone of Ukraine"s post-war economic renaissance, provided both sides deliver on their promises and pragmatic cooperation prevails over politics.
