New version of mineral deal with US may conflict with Ukraine's European integration aspirations

European Pravda has analysed the new text of the mineral agreement with the US, which may conflict with Ukraine's intention to join the European Union due to the strict restrictions that significantly affect Ukraine's economic sovereignty.

The article by European Pravda states that in February, a significant problem with US Treasury Secretary Scott Bessent's agreement was the requirement that US companies receive exclusive rights to develop new Ukrainian subsoil, from ore to natural gas.

It was noted that Ukraine has the right to offer a licence to Ukrainian and European businesses only if no American investor is interested in a particular deposit. Even then, 50% of the licence fee and royalties go to the Fund.

This is clearly not compatible with either Ukraine's existing agreements with the EU or with the principles of competition in the EU, which Ukraine is seeking to join. The February version of the agreement resolved this problem, but now it has returned.

The text of the new agreement contains severe restrictions that significantly affect Ukraine's economic sovereignty. The document provides for the exclusive right of US companies to develop Ukrainian subsoil and key infrastructure projects.

According to the text of the March agreement, US companies would receive priority rights to all future investments in natural resources and infrastructure.

Only if they refuse will Ukraine be able to offer participation to other investors, including European ones. Meanwhile, the Ukrainian government is obliged to disclose all confidential details of such negotiations to the United States.

In addition, the agreement prohibits Ukraine from offering any other investor better terms than those offered to the Americans within a year of their refusal.

A separate clause of the agreement obliges Ukraine to add to its licences for the extraction of "critical minerals" a ban on their sale to buyers from countries which the US Development Finance Corporation (US DFC) defines as strategic competitors of the United States.

There is therefore a risk that the European Union may also fall under this definition. This would set a precedent where Ukraine, which is seeking EU membership, would have to restrict trade with its European partners.

The most controversial clause is the one that deprives Ukraine of control over the Fund, which will be used to reimburse the US for the value of the assistance provided:

• the general partner of the Fund, who will manage its activities, will be appointed by the DFC without the consent of Ukraine;
• the majority of the Fund's board will consist of US representatives, and their votes will be sufficient to make decisions without the consent of Ukrainian representatives;
• the two Ukrainian representatives on the board can only try to break the quorum, but their candidacies must also be approved by the DFC;
• the Fund, which will be financed by Ukrainian natural resources and infrastructure, is more similar to a US organisation. It will pay taxes in the US, not in Ukraine.

If Ukraine has any claims or wants to challenge the Fund's actions, it will have to go to court in New York, not the Ukrainian courts.

The Trump administration also returned to the mineral deal a requirement for Ukraine to reimburse all the aid the US provided after Russia's full-scale invasion began in 2022.

Earlier, Ukrainian President Volodymyr Zelenskyy said that the United States had offered Ukraine a new version of the minerals deal which would immediately require ratification in parliament beyond the original framework agreement.

On 27 March, he said that there is currently no final version of the agreement on the use of Ukrainian mineral resources with the United States which the Trump administration expects to sign soon.