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Tuukka R @sopuli.xyz

The text of the Minerals Deal between Ukraine and USA

The text manages to be quite surprising to me.

There was talk about USA wanting a share of Ukraine's mineral wealth, but this agreement looks more like an agreement about funding of Ukraine's reconstruction. It says that half of all income that Ukraine will free from the Russia will have to be put in this fund, but if the fund will be used for reconstructing Ukraine, how does this benefit USA?

Maybe it can be used for building mines for American companies, for them to use for free? Or maybe the fund can be liquidated and the money shared between Ukraine and USA?

But, my untrained eye cannot really recognize whatever shenanigans there might be hidden in the text.

5 comments

  • My understanding is that the US maintains control over the fund. As such, IMO, it is likely they plan to spend the money on US contractors helping to rebuild UA. At first glance this may seem mutually beneficial, but it still means the funds are getting pulled away from UA instead of being spent towards UA contractors doing the rebuilding.

    I'm just guessing though. I'm keeping an eye out for any analysis articles published by a reputable news agency for clarity.

    • That could be worse. I could see how Zelensky might think this is capable of contributing to a PR win without being an actual major material loss for Ukraine if that's the case.

      Still uneasy, and doubtful that it'll make a difference, but considering that shithead supreme came out talking about how it was about repayment, and doubtlessly would've forced it to be so if he could have, I feared something much worse than "Some mineral profits will be used to reconstruct Ukraine, but the US decides what the fund prioritizes."

      I suppose it depends on

      More detailed terms pertaining to the Fund’s governance and operation will be set forth in a subsequent agreement (the Fund Agreement) to be negotiated promptly after the conclusion of this Bilateral Agreement.

  • If Ukraine has agreed to this in good faith, and not because they were coerced, the following things that stood out to me might not be as concerning as I think they are. I am also not a contract lawyer and am responding based on how the current administration sees things and reading the text as a layperson.

    The maximum percentage of ownership of the Fund’s equity and financial interests to be held by the Government of the United States of America and the decision-making authority of the representatives of the Government of the United States of America will be to the extent permissible under applicable United States laws.

    Sounds like the US will be seeking a disproportionate percentage of the fund.

    The Government of Ukraine will contribute to the Fund 50 percent of all revenues earned from the future monetization of all relevant Ukrainian Government-owned natural resource assets (whether owned directly or indirectly by the Ukrainian Government)

    This is not tied to the shares, so even if Ukraine's percent is extremely small they still have to fork over 50% of revenues from the listed resources. This also incentivizes the fund to push for exploiting resources in areas that may currently be off limits for environmental reasons, because that increases the amount of resources.

    The Fund, in its sole discretion, may credit or return to the Government of Ukraine actual expenses incurred by the newly developed projects from which the Fund receives revenues.

    The fund gets to offload expenses onto Ukraine. There is no matching text for offloading expenses to the fund or to the US. Sounds pretty shitty to me.

    The Fund's investment process will be designed so as to invest in projects in Ukraine and attract investments to increase the development, processing and monetization of all public and private Ukrainian assets

    Let's get external companies involved in reconstruction so they can benefit at the expense of Ukraine and make money off of it. Sounds like it wants to suck as much money as possible out of Ukraine.

    The Fund Agreement will provide, inter alia, an acknowledgment that both the Fund Agreement and the activities provided for therein are commercial in nature.

    So, the US government is running a business here and not an arm of the government. This is most likely designed to allow companies and billionaires to have all the power in the agreement so they can abuse Ukrainian resources for their own benefit. It also looks permanent, not a temporary situation to get Ukraine back to normalcy.