How mineral agreement opens path to US arms for Kyiv and what risks remain

In the early hours of 1 May, marking the 100th day of Donald Trump’s presidency, Ukraine and the United States signed the "mineral agreement."

The final text of the agreement, published by both governments, clearly shows that the signing of this document was a move beneficial to Ukraine.

However, it's too early to say that all challenges have been overcome, since negotiations are still ongoing.

Read more about what exactly this agreement will bring to Ukraine and why (in its modified form) the US needs it in the article by Sergiy Sydorenko, European Pravda's editor – Minerals in exchange for arms: what’s included in the Ukraine-US deal and what risks remain.

The agreement, approved by the government and signed on Thursday, is a standard intergovernmental arrangement. Moreover, the clauses that previously seemed unacceptable have been removed.

It is important to emphasise (because Russian propaganda has been promoting this falsehood and will likely continue to do so): the agreement does not transfer Ukrainian mineral resources to the United States.

However, budget revenues from the development of certain Ukrainian mineral deposits will indeed be used to implement this agreement.

The deal lists 57 types of resources, including natural gas, oil, rare earth elements, and valuable non-ferrous metals. Iron ore, coal, granite, and locally significant materials (like sand, gravel, etc.) are not covered by the agreement.

The "engine" of the agreement will be a joint fund established by Ukraine and the US.

Kyiv will transfer to this fund 50% of all rent payments, licensing fees, and revenues from production-sharing agreements.

However, this applies only to revenues from new deposits, i.e. licenses for which will be issued after the agreement comes into force.

The main directions of spending are reinvestment in reconstruction projects in Ukraine, as well as returning funds to the founding states – Ukraine and the U.S.

Part of the profits from investment projects is expected to go back to the US, although the first payments to either state are planned to start only after 10 years.

Additionally, the agreement allows both Ukraine and the US to contribute to the fund with direct cash payments. It's worth noting that in the near future, the fund’s revenues from new minerals licenses will be zero since no new licenses have been issued yet.

So why would Ukraine contribute funds to this fund, especially amid a severe budget deficit?

The agreement explicitly allows for the allocation of new weapons packages – essentially, to purchase weapons via this fund.

For example, if the US transfers $100 million worth of Patriot missiles to Ukraine, this would create a commitment for Ukraine to transfer $100 million to the fund's account.

This is a sort of "hybrid purchase," allowing Trump to publicly claim that the weapons are not being given away for free, while the US federal budget doesn’t actually receive the money.

But this scheme carries certain risks. The agreement does not clearly answer whether these conditions apply to "Biden-era aid" that is still being sent to Ukraine. It is very likely that continued "Biden deliveries" will also come with a price tag.

These payments for weapons will also serve to launch the fund and enable it to start investing.

There are no specific details in the agreement about how or where the fund's money should be spent. This will be determined in separate "technical" agreements, which are still under negotiation.

The risks posed by the lack of a technical agreement (and by the possibility that the US may lose its appetite for compromise after the symbolic 100-day mark has passed) are real. However, in its current form, the agreement is clearly advantageous for Ukraine.

Overall, the signing of this agreement is a major strategic win, signaling that Trump now sees Ukraine as a partner.