A major US–Ukraine energy and minerals deal, set to be signed today (Friday), could have major economic and geopolitical ramifications for both countries and global markets.
While we await specifics on the deal, which could be worth as much as $500bn, Ukraine is set to give 50% of the profits from the extraction of natural resources to an investment fund in which the US would have significant, but not 100%, control.
The deal, likely to cover oil and gas as well as minerals, will be a “framework agreement”, meaning Ukraine and the US will have more time to settle potential disagreements.
Each party has vested interests. For the US and Trump, access to Ukraine’s minerals is ‘payback’ for defence spending during the three-year-old conflict, and the variety of minerals that could be extracted and exported – principally titanium, graphite and lithium – are key to defence and hi-tech economies, supporting his growth agenda.
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