Implementing the US-Ukraine resource deal faces major challenges

According to TASS news agency on May 4, logistical and economic barriers will make it difficult to implement the mineral agreement between the US and Ukraine. This is the content mentioned by the Washington Post in a conversation with American experts.

As noted, the deal is unlikely to materialize quickly: real supplies of titanium, graphite, and lithium will only begin in the distant future, and the outlook for the oil and gas industry is limited.

“There are a number of factors that could make US companies wary of oil and gas in Ukraine. I don’t think large companies that operate globally will find Ukraine competitive in terms of investment. It’s probably smaller independent companies that will want to take the risk,” said Ben Cahill, an energy expert at the University of Texas.

"We're having a hard time finding funding to develop natural resources in the United States, Canada and Australia. Imagine how hard it would be to find money to do the same thing in Ukraine," Ashley Zumwalt-Forbes, a former US Department of Energy official, told the Washington Post.

The signing of the agreement between Ukraine and the United States on rare earth mineral resources was announced on May 1. The Ukrainian Parliament is expected to vote on the document on May 8. According to the report of First Deputy Prime Minister and Minister of Economy of Ukraine Yulia Svyrydenko, under the agreement, Kiev contributes 50% of all income from rents for new land and new licenses for mineral extraction in new areas to the bilateral investment fund – the so-called “Fund for the Reconstruction of Ukraine”, which is being created. The United States and Ukraine will have equal rights in managing the fund.

The agreement does not provide for Ukraine's direct debt obligations to the United States, nor does it include any security guarantees from Washington.