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On April 30, 2025, the United States and Ukraine signed a long-anticipated economic partnership agreement establishing the US–Ukraine Reconstruction Investment Fund.
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On April 30, 2025, the United States and Ukraine signed a long-anticipated economic partnership agreement establishing the US–Ukraine Reconstruction Investment Fund. Touted by some as a landmark minerals deal and a geopolitical signal to Russia, and viewed by others as rather meaningless, the agreement has drawn outsized attention. But for all the headlines and rhetoric, a closer look reveals a deal that is more modest and complicated than these rival framings suggest.
At its core, the agreement sets up a jointly managed investment fund, financed through future revenues from licenses for new projects in critical materials, oil, and gas. Ukraine retains ownership of all its subsoil resources, and while it alone will determine what to extract and where, all investment decisions will be made jointly with the United States under a 50-50 decision-making setup. Fifty percent of the proceeds from these new licenses will then flow into the fund, which is intended to finance postwar reconstruction and attract foreign investment. Far from being limited to mining, the fund will invest in “critical sectors of Ukraine’s economy,” and its revenues will be tax-exempt and protected against changes in Ukrainian law.
At this stage, this is largely the extent of the deal. Rather than a resource handover, a mining concession, or a security pact, it is a financing vehicle—the success of which will depend entirely on whether and how it is filled, steered, and governed. Notably, the agreement also stipulates that US military assistance delivered after the effective date will count as a US contribution to the fund, tying the fund indirectly to the broader US–Ukraine defense relationship.
A Deal Shaped by Ambition, Not Reality
Among the most persistent myths surrounding this agreement as it was being negotiated is that it would give the United States a reliable new supply of critical minerals. The deal fits into a broader US strategy of securing upstream access to critical minerals, which has also been applied, at least rhetorically, to Greenland, the Democratic Republic of the Congo, and elsewhere. The idea is simple: gain control of the resource, gain control of the supply chain.
But this logic was borrowed from an older oil and gas mindset that does not apply to critical minerals today. When the US initiated the creation of the International Energy Agency after the oil embargo of 1973, it was interested in the raw material, the crude oil, because it had refineries at home. By contrast, refining capacity for battery materials and rare earth elements is overwhelmingly concentrated in China, not the US or Europe.
The specific case of Ukraine presents other complicating factors. The country does have mineral resources, including rare earth elements, titanium, graphite, manganese, and uranium, but few of its known deposits have been subject to modern exploration. Much of the existing geological data dates to the Soviet era, making it unreliable for serious investment decisions. Some of the most often-cited deposits, particularly of the much-hyped rare earth elements, are also located in Russian-occupied territories, which makes development even tougher.
Even in areas not controlled by Russia, many of Ukraine’s critical mineral projects are in early-stage exploration or prefeasibility. Given that the global average discovery to production timeline for critical minerals is 16 years, developing these projects into producing mines could easily take a decade or more. And this would be under ideal conditions. Needless to say, the ongoing war, political uncertainty, infrastructure damage, and governance risks in Ukraine are far from ideal. These factors will extend both the time and the infrastructure investment needed to bring assets into production.
Moreover, critical minerals markets are currently in a downturn. With prices falling across the board, investors are even more hesitant to commit capital to high-risk greenfield projects in unstable jurisdictions. This is not unique to Ukraine; it is a global trend. But it makes the Ukrainian proposition even harder to sell. Simply having reserves to extract doesn’t mean the resources will be cost competitive. They may very well be uncompetitive.
Beyond the minerals themselves, many have invested symbolic value in the agreement. The US Treasury has framed the deal as part of a long-term commitment to a “free, sovereign and prosperous Ukraine,” and as a message to Russia that the US and its allies will not abandon Ukraine. The deal explicitly states that the US and Ukraine share a long-term strategic alignment.
But this symbolism masks a critical absence: the agreement contains no binding security guarantees of the kind President Zelenskyy has long sought from Washington. In this sense, the agreement may offer political comfort, but it does not change the military equation on the ground. The costs of future US military support do, however, count as a contribution to the fund, so this could be considered aspiring to implicit security support.
The Promise and Peril of the Fund
The most tangible aspect of the agreement is the creation of the investment fund. The fund can, in principle, invest in postwar reconstruction and serve as a catalyst for cofinancing, derisking private capital, and offering concessional finance for high-impact projects. The agreement also contains far-reaching legal protections for the fund, including currency convertibility guarantees, non-discriminatory treatment, and tax exemptions—important signals for foreign investors if implemented properly. Having such an investment vehicle can be helpful in a postwar context and serve as a platform for US engagement beyond the military sphere.
But for any of that to happen, the fund must first be stocked with proceeds—meaning hard cash. And those proceeds depend on the successful licensing, development, and profitability of new resource projects, most of which don’t yet exist and will cost a whole lot of capital. Moreover, the fund will need to be managed with realism, strategic focus, and good governance. But who will manage it? What safeguards are in place? What are its investment criteria? None of this has been clarified yet. The agreement does indicate that investment opportunity rights and offtake rights will be granted to the fund and the US partner, including preferential access to financial information and market-based offtake negotiations, but only when projects seek capital, and within the bounds of Ukraine’s EU obligations.
In terms of the US, if Washington is serious about reducing dependency on China or building resilient supply chains, it will likely need to invest not just in mines abroad, but also in midstream and downstream capacity at home and abroad where there is the most comparative advantage given the high capital intensity of processing and refining. This includes investing in and building up capacity for metallurgical processing, refining, recycling, and advanced materials research. The current policy ecosystem is not fit for that purpose.
In short, the agreement is a potentially meaningful development, but it is important to resist the temptation to oversell it. This is not a shortcut to mineral self-sufficiency, nor a geopolitical masterstroke. It is a fund. A first step. And like all first steps, what matters most is the one after.
Foundations and Individual Donors Anonymous Anonymous Aphorism Foundation the bedari collective Children’s Investment Fund Foundation David Leuschen Mike and Soa Segal Kimberly and Scott Sheffield Bernard and Anne Spitzer Charitable Trust Ray Rothrock
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