Ukrainian subsoil under the new agreement: what Ukraine risks losing by signing a new document
Ukraine received from the USA a draft of a new agreement on cooperation in the field of critical mineral resources — a document capable of determining who will have access to Ukrainian subsoil and under what conditions. It is not just about licenses or investments, but about strategic influence on one of the spheres where Ukraine has strategically important resources. The agreement with Washington can be a breakthrough in the development of this sector or lead to a new distortion, when control over them will gradually pass from the outside – under the guise of a partnership. The document has not yet been made public, but its content is already known. What this means for the Ukrainian economy, subsoil users, state sovereignty and the future energy transition is a question that requires serious analysis.
From Scandal to Ultimatum: A Chronicle of the Minerals Agreement
Long-term negotiations related to the Ukrainian subsoil are no accident: back in 2024, Zelenskyi presented the US with a victory plan, one of the points of which referred to the strategic use of Ukrainian resources. The initiative provided for the conclusion of agreements on joint protection and investment in the field of minerals with key partners – the USA and the EU. In the US, this idea was supported, in particular, by Republican Senator Lindsey Graham, who estimated the reserves of Ukrainian minerals in controlled territories at $2-7 trillion. Up to $12 trillion are reserves that are currently under Russian occupation. According to the SecDev study for 2022, the total value of all mineral resources of Ukraine is estimated at $26 trillion.
Donald Trump’s interest in Ukrainian minerals arose immediately after his inauguration on January 20. He publicly stated that Ukraine can “repay the debt” for military and financial aid to the USA precisely because of access to its subsoil. According to him, the USA has already spent $350 billion on Ukraine and should get back at least $500 billion. At the same time, Trump does not recognize the fact that most of this aid was provided in the form of grants. At the same time, the former British Prime Minister Boris Johnson compared this agreement with Lend-Lease in 1941, noting that the USA also made good money from it. Donald Trump, in turn, said that this agreement is beneficial to both parties, but Ukraine “can forget” about joining NATO.
On February 12, after Trump’s phone conversation with Putin, US Treasury Secretary Scott Bessent arrived in Kyiv and handed over to Zelensky the text of the agreement, which provided for US ownership of half of Ukraine’s minerals — including oil, gas, ports and infrastructure. Zelensky was given one hour to study and sign the document. The president refused. The reasons are the complete lack of security guarantees and unacceptable conditions that would oblige future generations of Ukrainians to pay for current decisions. The initial version of the agreement between Ukraine and the USA provided for the creation of an investment fund for the reconstruction of Ukraine, which both parties were to manage jointly. It was planned that Ukraine would contribute to the fund 50% of the revenues from the future monetization of the state’s mineral resources, including oil, gas and related infrastructure. But from the very beginning, the agreement was directly linked to the topic of security guarantees, and without them, the Ukrainian side refused to consider it separately.
On February 23, Zelenskyy publicly confirmed the refusal, calling the demand to recognize grant aid as debt a dangerous and unacceptable precedent. According to him, this paves the way for similar demands from other partners. Against the background of news from Washington, there have been speculations that the European Union is allegedly preparing a similar “no-loss deal” for Ukraine regarding critical resources. But the European Commission quickly denied this, explaining that since 2021 there is already a Memorandum of Understanding with Ukraine regarding such materials — there was no new initiative.
In the end, Kyiv managed to agree on a more balanced version of the agreement. The new text consists of 11 points. The main idea is to create a joint fund, where Ukraine will contribute income received from licenses, rents, dividends from infrastructure facilities related to the extraction of minerals. The agreement launches a new structure with the famous name – the American-Ukrainian Investment Fund for Reconstruction and Development (hereinafter – the Fund), while the main role in this architecture will be played by the International Development Finance Corporation of the USA (DFC – International Development Finance Corporation): it will receive the key levers of the Fund’s management, make appointments, control the flow of funds and generally determine the financial policy of the project. However, what is even more important is not who will dispose of the money, but how Washington changed the rules of the game around the Ukrainian subsoil. The USA actually rewrote the principles of “joint management” of minerals, centralizing this process in their hands as much as possible. At the same time, security guarantees sought by Ukraine are mentioned, but without specifics — only in the general context of support from the United States.
On February 28, the parties were already one step away from signing the agreement – after difficult, sometimes emotional negotiations, the Ukrainian and American delegations reached a compromise on key conditions. The document was ready – it was planned to be approved in Washington in the presence of both presidents. But the ceremony turned into a scandal. In the Oval Office, instead of a ceremonial signing, a public verbal fight took place between Volodymyr Zelenskyi and Donald Trump. The negotiations were cancelled, and the agreement was hanging in the air.
However, they recovered, and during the talks in Jeddah on March 11, the Ukrainian side proposed that the United States immediately sign a separate agreement on rare earth minerals, but then the American delegation took a break. Subsequently, the President of Ukraine suggested that Washington probably wants to conclude not a framework, but a detailed, full-fledged agreement. And already on March 25, he stated that the USA handed Ukraine an updated version of the agreement, which provides for immediate ratification in the Verkhovna Rada and is not part of the previous framework agreement. At the same time, on March 27, Volodymyr Zelensky announced that the final version of the document is still not available, although Washington is already openly preparing for its signing.
The new agreement on minerals: consequences for Ukraine and Zelenskyi
On March 27, the government of Ukraine received from the US a draft of a new agreement on the use of Ukrainian subsoil with stricter conditions — a 58-page document. About this reported people’s deputy Yaroslav Zheleznyak, as well as Financial Times, Вloomberg and other foreign mass media. This document has already caused a sharp reaction in some expert circles. The conditions proposed by the Americans too deeply affect the economic sovereignty of Ukraine and provide for strict restrictions in the field of access to the subsoil, which is why this document was at the center of geopolitical bargaining. The text of the draft agreement is currently being analyzed by the Ukrainian side, but is not made public, although it is about resources that, according to Article 13 of the Constitution of Ukraine, are the property of the entire nation.
One of the main points of the agreement is Ukraine’s demand to compensate for all military, financial and humanitarian aid provided by the US after the start of a full-scale war. The amount of this debt has not yet been fixed, but according to estimates by the Institute of World Economics in Kiel, it is about $123 billion. It is this assistance that the United States considers its “contribution” to the future joint fund, through which control over Ukrainian minerals will be implemented. The agreement provides for the creation of such a fund, which, despite the formal commonality, will actually be controlled by the American side. Of the five members of the board, three are US representatives, who will have the right of veto and can make decisions without the participation of Ukrainians. At the same time, no decision will be made without the consent of these persons. At the same time, the general partner, who will be responsible for all operational activities, is also appointed by Washington. As a result, the fund, which is formally created for Ukraine and financed with its own resources, legally looks like an American structure. He will pay all taxes in the USA, and all disputed issues will be heard in New York courts.
Also, according to the terms of the new agreement, Ukraine must provide the fund with full information about all new mining projects, including private ones. At the same time, the American side receives the priority right of access to such projects, the primary right to purchase resources, a ban on their sale to countries that the US considers competitors, as well as special conditions for American companies, even in the private sector. New infrastructure projects must also first be submitted to the fund, where the US will decide whether to join them.
That is, in fact, it is not about the transfer of Ukrainian resources as such, but about the transfer of the right to profit from them. Ukraine retains formal ownership, but undertakes to guarantee the fund’s profitability. In other words, to avoid delays, and in case of losses or failures to compensate for losses. Moreover, it is not only about state companies: the agreement covers the entire resource base of the country, including private mining enterprises. As for ports, there is no direct mention of them in the agreement, but the concept of “infrastructure investment projects” (Infrastructure Investment Projects) appears, and its interpretation is quite broad. Theoretically, it can also include seaports, if the fund considers such projects attractive for investment.
Moreover, Ukraine undertakes to submit all new infrastructure initiatives to the fund for consideration. If in the future it is about the reconstruction or modernization of ports, the Fund will have the first right to participate in such projects. However, only energy resources — oil, gas, minerals — are listed in the list of sources of income that make up the Ukrainian contribution to the fund. Revenues from port or logistics infrastructure are not currently included in this list.
The draft agreement also defines a revenue-sharing mechanism, which provides that the US will first recover its aid plus 4% per annum. The rest of the profit can be either reinvested or transferred to Ukraine — but only after full settlement. All payments are made in US dollars and transferred to the fund’s foreign accounts under the control of the American side, transaction service costs, commissions, taxes are also borne by Ukraine.
In addition, the fund will receive 50% of all income from new licenses and rent payments. It is also mentioned that the US claims half of the profits from infrastructure facilities related to mining, but these provisions are not detailed at this time. The document talks about Royalty Interest — that is, participation in profits arising from the commercial use of Ukrainian resources, regardless of who exactly will extract them — the state or private business. At the same time, the current activities of Naftogaz and Ukrnafta are not included in the agreement, but all new fields are subject to it. Even investment projects that will be financed in the future were not an exception – the fund will have the right to receive 50% of the profits from the state revenues that these projects will generate.
It should be noted that reinvestment of funds in Ukraine is foreseen, but will be carried out only with the agreement of the American side and only partially. Under the guise of a “bilateral partnership”, Ukraine is actually taking on multi-year obligations, the amount of which will increase every year – by the same 4% provided by the agreement as an incentive for the fastest possible compensation.
Separately, it is worth noting an extremely important detail – the new text of the agreement does not mention any specific security guarantees for Ukraine. Although Ukraine previously insisted that the discussion of access to minerals is possible only in a package with security agreements, this clause in the final draft looks declarative and blurred. Instead, Ukraine’s obligations are clearly spelled out — financially, institutionally, and politically.
A very important point is that the signing of this agreement automatically opens the door for the claims of other partners of Ukraine. If Washington succeeds in obtaining compensation for the aid, it is possible that there will be politicians in European capitals who will make the same demands – given the electoral cycles and populism. The consequences are the cancellation of any plans to write off EU loans and the political burial of the bailout issue. According to the project, American companies get exclusive access to any new deposits — from metals to gas. Ukrainian or European businesses can join only if the US officially abandons the project, and even then half of the revenues go to the fund. This contradicts both the current agreements with the European Union and the basic principles of its competition policy. In the previous, February version of the agreement, this point was removed. In the new edition – returned.
According to other requirements of the agreement, Washington requires priority access to any future investment project in the areas of natural resources and related infrastructure. Ukraine can negotiate with others only after the American side refuses. At the same time, he undertakes to provide full access to the details of such negotiations, including confidential information. Also, the Ukrainian government will not have the right within a year after the refusal to make any other party a better offer than the one the US received.
If the document is signed, the United States will receive a real instrument of influence on almost all investment processes in Ukraine: subsoil, logistics, energy, infrastructure. All this at a time when Ukraine is trying to integrate into the EU. This concentration of American powers is already causing serious concern in Kyiv and Brussels. After all, a candidate country cannot guarantee strategic priority to a state that is not a member of the European Union. This threatens not only to complicate the negotiation process with the EU, but also to weaken the unity of the West in supporting Ukraine.
A separate innovation of the agreement is a direct ban on selling critical minerals to buyers who have their headquarters in a country defined as a “strategic competitor of the United States” by the DFC decision. Given the current confrontation between the USA and Europe, there is a danger that even the EU may be recognized as such a competitor. This contradicts the very logic of Ukrainian European integration, but the authors of the document do not seem to be bothered by this.
A particularly noticeable feature of the agreement is its style. It is written as a business contract between private companies, not as a full-fledged intergovernmental agreement. There is no mention of ratification by the parliament, despite a warning from Ukraine. On the contrary, a provision appeared in the text that transfers responsibility to Ukraine — Kyiv guarantees that this agreement does not contradict its obligations to the EU and the Constitution. That is, it is not the document itself that must be brought into line with the laws, but the state must adapt to its requirements. These legal formulations suggest that the text was not created by specialists in international law, but by lawyers who were used to accompanying corporate transactions.
Sign or refuse?
Rejecting the agreement on subsoil or agreeing to its signing — both options carry serious risks for Ukraine. After Volodymyr Zelenskyi’s scandalous visit to Washington on February 28, the Trump administration treats Kyiv with particular mistrust, moreover, a decision was made to make the terms of the agreement more rigid and disadvantageous for our country. At the same time, the President of Ukraine has many times publicly confirmed his readiness to sign an agreement on minerals, so now a direct refusal to sign it will be perceived in the US as an even greater manifestation of unreliability and political démarche.
In addition, officials close to Trump have long expressed dislike for Ukraine and may use this refusal as a pretext for “punishment”, which Washington will easily arrange for a domestic audience. The administration has enough levers of pressure at its disposal, from stopping the supply of weapons to restrictions in the sphere of intelligence or even political negotiations with Moscow without the participation of Kyiv. It is useless to rely on moral safeguards in such a situation.
At the same time, the refusal to sign will not find support in Europe either. Despite the growing defense ambitions of the EU, they are well aware of their dependence on the US. And that is why partners have repeatedly advised the Ukrainian side not to escalate relations with Trump, even if his behavior looks humiliating.
Kyiv’s position now boils down to an attempt to maintain a pause. After the details of the agreement were leaked, Zelensky publicly appealed to the Americans with the assurance that Ukraine is not abandoning the idea of an agreement in general. But it will not be possible to remain silent for long: Trump demands the signing as early as next week, and there is no time left for maneuvers.
An attempt to correct the current draft of the document also seems unrealistic. It is not about separate wordings, but about the entire logic of the text, which has nothing to do with intergovernmental agreements – neither in structure nor in legal content. Editing it will not solve the problem. In fact, it is a set of commercial requirements, not suitable for ratification by the parliament. Even abstracting from the risks for the state, the political price of its adoption is too high. It is almost impossible to find 226 deputies who are ready to put their names under such a document. No faction will want to associate itself with conditions that will be perceived as a loss of control over national resources.
The only way in this situation is to create an alternative agreement, from scratch, returning to the parameters that were agreed in February. This is probably what the government team can do now. But even if it is possible to prepare a new version, there are objectively few chances for its quick approval. And if they decide in Washington that it is impossible to reach a compromise, it is important that it is announced there. Kyiv’s open refusal to negotiate is the worst scenario for us.
However, whatever the decision is regarding this agreement, it threatens Zelensky with certain political losses. If the document is signed, an acute internal crisis will begin – with protests in the parliament and distrust in society. If not, the resumption of arms supply will be in question, and negotiations on ending the war may take place without the participation of Ukraine. The opposition has already publicly accused the president of the fact that it was his behavior in Washington that provoked both the blocking of aid and the appearance of the current version of the agreement. These are real political losses, which will only increase after the adoption of any of the unpleasant decisions.
So, the new draft agreement proposed by the USA actually deprives Ukrainians of control over their own resources, and the state itself – of economic sovereignty. It is not only about access to the subsoil, but systemic intervention in domestic economic policy: from investments to the distribution of profits. The proposed terms are incompatible with the principles of sovereign governance and contradict Ukraine’s obligations to the EU. The transfer of the right of first choice, priority conditions and financial control is not a cooperation, but a unilateral model. Its adoption will have long-term catastrophic consequences for our state, in particular for legislative independence, fiscal policy and external trust.
You can’t refuse to sign – and the comma in this phrase today decides not grammar, but geopolitics. Ukraine is offered a choice without a choice, where any option carries losses. But whoever signs this agreement will bear full responsibility for its consequences in the future.
