Divine Intervention or a Whisper: US–Ukraine Mineral Agreement Signed
Whisper in Grandpa's Ear | Russian Response | Elusive Peace
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In last week’s BWR, I discussed the Trump and EU peace plans, what’s in them, and the challenging road toward a lasting peace. Putin’s grateful response has been a massive air attack on Ukraine.
In this week’s BWR, I discuss the US-Ukraine Minerals agreement. Divine intervention or a Whisper in Nero’s ear; a mineral deal was agreed. What is in the agreement, what is the Russian reaction, and who are the winners and losers?
Takeaways
PEACE NEGOTIATIONS — The minerals agreement benefits Ukraine in the peace negotiations and the post-peace period, when that time comes. It will be a long and difficult road to peace.
The Agreement
In relative calm, unlike the shouting match in the Oval Office between US President Trump and Ukrainian President Zelensky in February, a meeting of the minds appears to have occurred during the 20-minute face-to-face between the two men in the Vatican hours before Pope Francis’s funeral.
Whether due to divine intervention or simply the last person to whisper into Trump’s ear, we will not know; but the meeting eventually resulted in the official signing of “The Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund.” Although the agreement was not signed by Trump and Zelensky as initially planned in the Oval Office in February, it was finally signed by US Treasury Secretary Scott Bessent and Ukrainian First Deputy Prime Minister Yuliia Svyrydenko last week in Washington, DC.
The agreement is significantly more favorable for Ukraine than the previous draft agreements proposed by the Trump administration several months ago, and even more so than the one scheduled for signature by the two presidents in the Oval Office in February. For example, the first paragraph of the agreement states,
“WHEREAS, the United States of America has provided significant financial and material support to Ukraine since Russia's full-scale invasion of Ukraine in February 2022”
The previous draft referred to the war as the Russia-Ukraine conflict, avoiding placing blame for the war on Russia. Referring to the war as “Russia’s full-scale invasion of Ukraine” is a significant change that acknowledges Russia as the aggressor and is used multiple times in the agreement. Continuing the topic of financial support, the agreement does not mention any previous debt obligations; that is, previous US financial support is not framed as loans to be repaid, which can be interpreted as a forward-looking partnership. This is notable because Trump has been vocal about reimbursement of $350B in US military aid since the start of Putin’s second invasion, an amount inflated by 3X the actual aid provided and never documented as a debt. This represents a significant Ukrainian win.
The agreement commits the parties to establishing the United States-Ukraine Reinvestment Fund (Fund), which Ukraine and the US will jointly manage on an equal partnership basis. Ukraine will maintain full ownership and control of the country’s resources, and both signatories will determine what minerals will be extracted and where. Kyiv will contribute 50% of revenues from exploiting natural resources through new licenses for mining critical minerals, and oil & gas. The US contribution to the Fund, supported by the US International Development Corporation DF Agency, will be cash and/or the cash equivalent value of matériel and intelligence services. The latter is critical to Ukraine’s war effort, and only the US can deliver it. The US is positioning the Fund as a ‘security assurance’ and a vehicle for rebuilding Ukraine. Upon signing the agreement, Secretary Bessent said,
“The agreement signals clearly to Russia that the Trump administration is committed to a peace process centered on a free, sovereign, and prosperous Ukraine over the long-term…Both the United States and the Government of Ukraine look forward to quickly operationalizing this historic economic partnership for both the Ukrainian and American people."
Ukraine’s sovereign control over its resources and the locations of extractions is critically important, given that Russia occupies much of eastern Ukraine, where many mineral deposits are located. The illustration below provides an overview of mineral deposit locations. It should be noted that the estimates are based on Soviet surveys conducted in the 1980s and therefore do not afford the benefit of today’s cutting-edge surveying technologies.
The evolving US peace agreement proposes freezing the front lines and acknowledging Russian control of the Russian-occupied Ukrainian territories, which would make the Fund’s investment and mining in that region impossible. According to We Build Ukraine, a Kyiv-based think tank, as much as 40% of Ukraine’s mineral deposits are located in Russian-occupied Ukraine, with a value of $350B or more.
On the ‘security assurance’ aspect of the agreement, Trump described the agreement as,
“It's also good for them (Ukraine) because you'll have an American presence at the site…and the American presence will, I think, keep a lot of bad actors out of the country or certainly out of the area where we're doing the digging."
In the end, the agreement does not include any explicit security assurances or guarantees, but then again, its absence was anticipated. However, it does demonstrate a US economic interest in Ukraine, but is it enough to motivate the US to defend Ukraine and deter Russia from invading again? Unlikely on both counts.
The Ukrainian Cabinet of Ministers has approved the agreement, which will go to the Verkhovna Rada (Ukraine’s parliament) for ratification on 8 May 2025.
Russian Response
The Kremlin’s response to the minerals agreement has been mostly muted, but there are signs of concern about an emerging US-Ukrainian alliance driven by financial interests. One should remember that when Zelensky first proposed a US–Ukraine minerals deal in 2024, Putin followed up with a counter-offer to do the same, offering joint Russia-US extraction cooperation in Siberia and the Russian-occupied regions of Ukraine. The latter, even Trump’s disciples, would likely reject.
Vladimir Rogov, chairman of the commission of the Public Chamber of the Russian Federation on sovereignty, co-chairman of the coordinating council for the integration of new regions, said in an interview with RIA Novosti,
"Zelensky actually surrendered the territory of the post-Ukrainian space under his control into legally prescribed slavery in order to remain in power of any value… Ukraine embarked on the path of self-destruction as soon as its pseudo-elites abandoned the course of good-neighborly and partnership relations with Russia, selling themselves for beads and cookies to Western masters”
It should be noted that Rogov plays a central role in integrating the Russian-occupied Ukrainian provinces into the Russian state. He is a poster child of the Soviet man, and like many Kremlin senior government officials, he has never accepted Ukrainian sovereignty. His public comments and interviews about Ukraine are designed to dismiss Ukrainian sovereignty and Zelensky’s legitimacy as president.
Conclusion
The minerals agreement buys Ukraine time and strengthens its position in the peace negotiations, albeit at a high cost; however, it is significantly better than any alternative. The alternative is fighting Russia alone, which Ukraine will do regardless, because it does not have a choice - it is fighting for its life.
The agreement will take years to implement, and resource extraction will only commence when there is peace or, at a minimum, a ceasefire. In the meantime, the agreement provides Trump with a mechanism by which he can supply Ukraine with matériel and intelligence today, while also satisfying his constituents' demand for a return on investment.
Will the minerals agreement motivate the Kremlin to take the peace negotiations seriously? Unlikely. Will it stimulate the EU to commit to rebuilding its defense infrastructure? More likely. Putin is not yet motivated to end the war, and the EU knows the US is an unreliable partner.
The agreement is a step in the right direction toward achieving a fragile ceasefire, but a lasting peace remains elusive.
Additional Reading(s)
The Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of a United States-Ukraine Reconstruction Investment Fund (Government of Ukraine, 01 May 2025)
Treasury Announces Agreement to Establish United States-Ukraine Reconstruction Investment Fund (US Department of the Treasury, 30 Apr 2025)
Ex-CIA Chief: We Gave Ukraine Enough Weapons to Bleed, Not to Win (The Sunday Times, 03 May 2025)
Root Cause of Putin’s War: Sovereignty and Agency (Barbershop Whispers…Russia, 24 Mar 2025)
Ukraine - Europe’s Protector and Security Umbrella (Barbershop Whispers…Russia, 21 Apr 2025)
Putin’s Unconditional (With Conditions) Ceasefire Negotiations (Barbershop Whispers…Russia, 31 Mar 2025)
Bromancing to Peace (Barbershop Whispers…Russia, 17 Feb 2025)
The Curious Case of the Evolving Peace Strategy Over Ukraine (Barbershop Whispers…Russia, 06 Apr 2025)
Follow-ups & Quick Bites
Follow-ups
Ex-CIA Station Chief Speaks Out About Ukraine War
Ralph Goff, a former CIA chief of operations, says Biden’s White House did not give Kyiv the weapons to drive out Russia for fear of nuclear war. Based on Trump’s shouting match with Zelensky in the Oval Office, “You are playing with WW III”, and his envoy’s parroting of Russian narratives, Trump appears to have the same concern.
Additional Reading(s)
Ex-CIA Chief: We Gave Ukraine Enough Weapons to Bleed, Not to Win (The Sunday Times, 03 May 2025)
Quick Bites
Xi is Coming to Moscow for the Victory Day Parade
Chinese President Xi Jinping will visit Russia on May 7-10 and join Russian President Vladimir Putin at the 80th commemoration of the Allied victory against Nazi Germany, the Kremlin said on Sunday.
The Kremlin said the two presidents would hold bilateral talks on "developing partnerships and strategic ties" and "issues on the international and regional agenda".
"The governments and ministers... are expected to sign a series of bilateral documents," it added.
Putin has ordered a three-day truce in the war in Ukraine to coincide with Russia's Victory Day commemorations on 9 May.
Ukrainian President Volodymyr Zelensky has rightly dismissed Putin’s 3-day truce as theatrics.
Additional Reading(s)
Xi Comes for a Parade (The Moscow Times, 03 May 2025)
Vol 3, No 18 - BWR 04.05.2025
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