New U.S. mineral deal may complicate Ukraine’s path to EU

Ukrainska Pravda reported the information, citing the European Pravda article.

The article states that in February, a key issue in the agreement by U.S. Treasury Secretary Scott Bessent was the demand that U.S. companies would have exclusive rights to new development of Ukraine's minerals: from ore to natural gas.

It was noted that only if a mineral deposit does not interest any American investors, Ukraine has the right to offer a license to Ukrainian and European businesses. However, even then, 50% of the license and royalties value would 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 made its way back.

The new agreement includes severe restrictions that greatly impact Ukraine's economic sovereignty, granting US companies exclusive rights to develop Ukrainian subsoil and key infrastructure projects.

The March agreement grants U.S. companies priority rights to future investments in Ukraine's natural resources and infrastructure. If they decline, Ukraine can offer participation to other investors but must share all negotiation details with the U.S. Additionally, Ukraine cannot offer better terms to other investors for one year after a U.S. refusal.

A clause in the agreement requires Ukraine to include a ban on selling "critical minerals" to buyers from countries identified by the US Development Finance Corporation (US DFC) as strategic competitors in its extraction licenses.

This creates a risk that the European Union could be classified under this definition, setting a precedent where Ukraine, aspiring to EU membership, would be forced to limit trade with its European partners.

The most controversial clause of the agreement strips Ukraine of control over the Fund, which will reimburse the US for its assistance. 

• The DFC will appoint the Fund’s general partner without Ukrainian approval, and US representatives will hold a majority on the board, enabling decisions without Ukrainian consent. 
• Ukrainian board members can only attempt to break the quorum, with their candidacies subject to DFC approval. 
• Fund operations will be US-based, with taxes paid in the US rather than Ukraine, despite being financed by Ukrainian resources.

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.