Ukraine and the US have agreed to establish the United States-Ukraine Reconstruction Investment Fund, bringing months of tense negotiations to a close.

Under the economic partnership, the two countries will collaborate to develop Ukraine’s natural resources, including critical minerals, to support its recovery after the ongoing war with Russia. The pair began negotiations in February, which included a heated, televised discussion between Ukrainian President Volodymyr Zelensky, US President Donald Trump and Vice President JD Vance. 

Initially focusing on rare earths, the deal, which was signed on Wednesday and still needs to be ratified by Kyiv’s legislature, has now morphed into a broader reconstruction effort. Ukraine will retain exclusive ownership of all subsoil, territorial waters, and natural resources, and will be in charge of deciding the conditions and locations for resource development.

Kyiv will provide 50% of future revenues from royalties of newly issued licences to the US, although profits will be fully reinvested in Ukraine’s economy for the first 10 years. The US will contribute to the fund either through direct financial input or new military assistance, meaning previous contributions will not be accounted for – despite Trump previously calling for the repayment of military support with “the equivalent of like $500 billion worth of rare earths.”

The fund’s resources will be invested exclusively in Ukraine, either in extraction projects or infrastructure reconstruction. The deal includes technology transfer provisions and tax exemptions in both countries, Kallanish understands.

Ukraine is believed to hold major rare earth deposits – half of which are on territories occupied by Russia – but recoverable quantities remain unclear. Kyiv has also highlighted significant proven reserves of other minerals, such as graphite, copper, nickel, cobalt, manganese, and lithium.

According to Ed Verona, a non-resident senior fellow at the Atlantic Council, the agreement is “so onerous that it is tantamount to picking the pockets of an assault victim,” which may discourage “serious US investors” from backing future minerals projects.

“If it is ratified by a slim majority, then would potential investors be willing to commit to projects if a future government might abrogate a deal that was arguably imposed under duress?” he says. “The history of mineral resources deals offers ample reason to doubt that this one would stand up well over the period typically required to develop large and capital-intensive projects with lead times of up to a decade.”