 "Ukraine opens mineral reserves to keep Trump interested in Kyiv, US pledges to invest $75 mn")
Ukraine has opened up its mineral reserves to tame US President Donald Trump’s ambitions of taking control of the country’s vast resources, which is eventually expected to benefit Kyiv in the war.
The mineral reserves have attracted a $75 million investment from Washington, alleviating Ukraine’s fear that Trump is losing interest and walking away from the war-torn country.
Conor Coleman, head of investments at the US International Development Finance Corporation, the government agency behind the investments, said, “By deploying this initial capital, we aim to catalyse private-sector investments in Ukraine through the fund’s investments, to rebuild critical infrastructure, unlock nature resources and generate economic prosperity for the United States and Ukraine.”
The deal between the US and Ukraine was signed in May after months of tough negotiations. The mineral reserves are worth trillions of dollars. The deal enabled Washington access to Kyiv’s rare earth minerals in exchange for establishing an investment fund in Ukraine.
What’s the deal?
The deal gives the US some control over Ukraine’s mineral reserves and special access to investment projects in natural resources. Also, if a company wants to develop a mineral site, it must present its project to the fund created by the deal.
The $150 million investment announced on Wednesday will serve as the fund’s initial capital, with the majority of future contributions expected to come from Kyiv. Under the agreement, 50 per cent of the revenues generated by the Ukrainian government through mineral extraction and license sales will be directed into the fund.
Profits from the fund will be reinvested into Ukraine’s economy, while the United States will also receive a share. Trump has framed the arrangement as a form of repayment for previous US assistance to Ukraine.
Impact Shorts
More ShortsHow will it help Ukraine?
The influx of US government funding into Ukraine’s mineral resources, energy sector, and related infrastructure could help reassure private investors and draw in much-needed capital to support the country’s wartime economy.
Recognising the US president’s business-focused approach, Kyiv aims to give Trump a personal investment interest in Ukraine’s future through the mineral sector, particularly as he has grown frustrated with stalled diplomatic efforts to end the war and has hinted at the possibility of stepping back.
Ukraine’s Prime Minister, Yulia Svyrydenko, “The US investment is a sign of trust and long-term commitment of our partners. American investments can be a guarantee of security both for Ukraine and for American business in Ukraine.”
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