The proposed US-Ukraine mineral agreement has garnered significant attention due to its potential implications for both nations. However there has been little analysis of its actual content; the document is public and it is available here. While President Trump has framed the deal as a means for the United States to recoup previous financial support provided to Ukraine during the ongoing conflict, a closer examination reveals that the agreement primarily serves as a framework for future American investments in Ukraine’s mineral extraction infrastructure. Notably, the agreement lacks specific details regarding profit distribution and does not include enforceable legal provisions, such as choice of law and jurisdiction clauses.
Key Provisions of the Agreement
The agreement outlines the establishment of a Reconstruction Investment Fund, jointly managed by the United States and Ukraine, to facilitate the development of Ukraine’s natural resources. However, it does not specify the exact mechanisms for investment, the roles of private companies, or the allocation of profits between the parties. The absence of these details suggests that the agreement functions more as a memorandum of understanding rather than a binding contract. It is just an agreement to work together in the future, in a way yet to be defined, rather than anything more concrete.
Investment Timeline and Profit Realisation
Given the current state of Ukraine’s infrastructure, substantial investments and extensive reconstruction efforts are required before any profitable mineral extraction can commence. Industry experts estimate that it would take at least four years—the duration of President Trump’s current term—to develop the necessary infrastructure and begin realising returns on investment. Consequently, any financial benefits resulting from this agreement are unlikely to materialise during the present administration. Therefore the issue of profit distribution - between US investing companies (if indeed all the companies investing under this framework are American - that remains to be seen) - will be left until after President Trump has left office.
Role of Private Companies and Future Agreements
The agreement anticipates that private companies will undertake the actual investments in Ukraine’s mineral sector. However, it lacks clarity regarding the specific entities involved and the nature of subsequent agreements required to make these investments work. There will need to be work on roads, railways, factories, electricity supply, exploration, extraction, accommodation and a whole host of other issues that are not addressed at all. These ambiguities raise questions about the practical implementation of the proposed initiatives and the responsibilities of each party.
Strategic Presence of US Experts in Ukraine
One notable anticipated aspect of the agreement is the provision for US experts to be present in southern and eastern Ukraine, regions rich in valuable minerals. The deployment of American personnel in these areas could serve as a strategic deterrent to ongoing hostilities. The potential risk to US citizens sent by their government and on the invitation of Ukraine may compel the United States to respond assertively to any aggression in the vicinity of these individuals (for example if one of them is injured or killed), thereby acting as an informal peacekeeping presence. This strategy could lead to a de-escalation of the conflict and provide Washington with direct insights into the on-ground situation.
Implications for US-Ukraine Relations
For President Zelenskyy, signing the agreement promptly could be a strategic move within the broader Jeddah peace process currently underway. By engaging with the United States through this framework, Ukraine may strengthen bilateral relations and encourage increased American involvement in its reconstruction efforts. This approach could also help mitigate personal differences between the leaders and demonstrate Ukraine’s commitment to collaborative development.
Potential Outcomes and Conflict Resolution
The presence of American experts in Ukraine, as facilitated by the agreement, may lead to a reduction in hostilities due to the heightened risk of international repercussions for any attacks in these regions. Over time, this could foster confidence-building measures between the United States and Ukraine, further deterring aggression and contributing to a more stable and tolerable resolution of the conflict.
Obviously President Zelenskyy should sign this agreement at the first possible opportunity, as he loses nothing by it and gains increased US cooperation and assistance, and potentially even American de facto peace keepers.
In conclusion, while the proposed US-Ukraine mineral agreement is currently a non-binding framework lacking detailed provisions, it offers a pathway for increased American involvement in Ukraine’s reconstruction and resource development. The strategic deployment of US experts could serve as a deterrent to ongoing conflict, paving the way for deeper bilateral cooperation and a potential de-escalation of hostilities. Once one group of experts is on the ground, furthers can follow, and the Europeans can likewise cooperate in this process in alignment with their strategic interests. This is exactly what Russia does not want, as it gives her an incentive to stop hostilities. Therefore this agreement is critical first step on bringing this war to a conclusion, even if that conclusion is imperfect.