Ukraine’s Zelensky cautious on new minerals deal, says past US aid was not a loan

KYIV – President Volodymyr Zelensky said Ukraine would not accept any mineral rights deal that threatened its integration with the EU, but said it was too early to pass judgment on a dramatically expanded minerals deal proposed by Washington.

He told reporters that Kyiv’s lawyers needed to review the draft before he could say more about the US offer, a summary of which suggested the US was demanding all of Ukraine’s natural resources income for years.

He also said Kyiv would not recognise billions of dollars of past US aid as loans, though he did not say whether such a demand featured in the latest draft version received by a top government official.

Mr Zelensky did say, however, that the text was “entirely different” from an earlier framework deal that he had been set to sign with US President Donald Trump before

their talks descended into acrimony

in February.

“The framework has been changed. Let us study this framework and then we can talk,” he told a news conference in Kyiv.

The latest US proposal would require Kyiv to send Washington all profit from a fund controlling Ukrainian resources until Ukraine had repaid all American wartime aid, plus interest, according to a summary reviewed by Reuters.

Mr Zelensky, who has repeatedly stressed the need for strong relations with the US, appeared to be alluding to this last element when he said Kyiv did not view past assistance as something that now needed to be repaid.

Navigating an acceptable path forward on issues like this is a major challenge for Mr Zelensky, whose rift with Mr Trump in February saw

Washington cutting off flows of previously agreed military assistance

and stopping intelligence sharing.

It is also a highly sensitive diplomatic juncture, with Mr Trump trying to rapidly end the fighting with Russia while reorienting Washington’s policy towards endorsing Moscow’s narrative about its three-year-old war in Ukraine.

Ukrainian Deputy Prime Minister Yulia Svyrydenko told lawmakers that Kyiv would issue its position on the new draft only once there was consensus. Until then, public discussion would be harmful, she said.

Another Ukrainian source described the full document presented by the Americans as “huge”.

Revised draft

Mr Zelensky has repeatedly said he accepts the idea of signing a mutually beneficial minerals deal with the US, although he would not sign an agreement that would impoverish his country. On March 27, he said Washington was constantly changing the terms but that he did not want the US to think he was opposed in principle.

Three people familiar with the ongoing negotiations said Washington had revised its proposals. The latest draft gives Ukraine no future security guarantees and requires it to contribute to a joint investment fund all income from the use of natural resources managed by state and private enterprises.

According to the summary, it stipulates that Washington is given first rights to purchase extracted resources and recoup all the money it has given Ukraine since 2022, plus interest at a 4 per cent annual rate, before Ukraine begins to gain access to the fund’s profits.

Ukraine’s 2024 budget revenues included US$1.2 billion (S$1.6 billion) of rent payments for the use of sub-surface resources, US$1.8 billion in dividends and other payments from the state share in state-owned companies, and US$19.4 billion from profits at state-owned companies, Finance Ministry data showed.

The joint investment fund would be managed by the US International Development Finance Corporation and have a board of five people, three appointed by the US and two by Ukraine. Funds would be converted into foreign currency and transferred abroad.

An earlier version of the deal, which Ukraine agreed to in principle before Mr Zelensky visited the White House in February, had terms that appeared more favourable to Ukraine. It proposed a joint investment fund with Ukraine contributing 50 per cent of proceeds from future profits of state-owned natural resources.

Kyiv said that previous version had been only a framework deal that would lay the ground for a more detailed deal that would have to be agreed later.

Mr Zelensky’s visit on Feb 28 ended with Mr Trump berating him in the Oval Office, later followed by several days during which Washington suspended all intelligence support and military aid to Ukraine.

Since then, Mr Zelensky has trodden carefully, repeatedly thanking the US for support.

Earlier in March, Ukraine agreed to a US proposal for a 30-day ceasefire, even though this was rejected by Russia.

Last week, Ukraine and Russia both agreed to pause attacks on energy infrastructure and at sea, but Moscow demanded international sanctions be eased before it accepted the maritime truce.

US Treasury Secretary Scott Bessent has been spearheading negotiations on the minerals deal. In an interview with Fox News earlier this week, he said the US had “passed along a completed document for the economic partnership” and Washington hoped to “perhaps even get signatures next week”. REUTERS