**U.S.-Ukraine Minerals Deal May Take a Decade to Deliver Returns**
The recently signed U.S.-Ukraine critical minerals agreement has been hailed as a significant step forward for both countries. However, industry experts are cautioning that the deal is unlikely to deliver significant financial returns for at least a decade.
According to Adam Webb, head of minerals at Benchmark Minerals Intelligence consultancy, the challenges to mining investment in war-torn Ukraine are major obstacles. “If anyone’s thinking suddenly all these minerals are going to be flying out of Ukraine, they’re dreaming,” he said. “It’s going to be difficult for people to justify investing money there when there are options to invest in critical minerals in countries that are not at war.”
The deal, inked on April 30, creates an investment fund and grants the United States special access to new projects developing Ukraine’s natural resources, such as oil and gas, lithium, graphite, and rare earth elements. However, experts point out that developing mineral deposits typically takes 10 to 20 years in established mining countries like Canada or Australia.
Ukraine faces steeper obstacles due to limited geological data on its mineral sites and the full-scale Russian invasion that has left key infrastructure, including transport and energy systems, in disrepair. The U.S. President Donald Trump had urged Ukraine to sign the agreement, arguing that the U.S. should gain more from its support to the country.
Despite the uncertainty, Ukrainian officials have touted the deal as a political milestone that could help revive U.S. support under Trump, particularly in the form of weapons and financial assistance. However, one key omission from the deal is a provision long sought by Kyiv – security guarantees that could help deter future Russian aggression after a ceasefire.
The level of investment expected to enter the fund also remains uncertain. Ukraine’s pace of issuing new mining licenses has historically been slow, with just a handful granted for key resources between 2012 and 2020. Out of 24 potential mining projects identified by Benchmark Minerals Intelligence, seven are located in areas currently occupied by Russia.
**Commentary**
The U.S.-Ukraine minerals deal is a complex issue that requires a nuanced understanding of the challenges involved. While the agreement may have political significance, it is unlikely to deliver significant financial returns for at least a decade.
One key concern is the lack of security guarantees, which could help deter future Russian aggression after a ceasefire. This omission is particularly worrying given Ukraine’s history of conflict with Russia.
Another issue is the level of investment expected to enter the fund. If the deal does not attract sufficient investment, it may struggle to deliver its intended benefits.
**Deeper Analysis**
The U.S.-Ukraine minerals deal highlights the complexities and challenges involved in international cooperation on critical mineral extraction. While the agreement may have political significance, it is unlikely to deliver significant financial returns for at least a decade due to the major obstacles facing mining investment in war-torn Ukraine.
Furthermore, the lack of security guarantees and uncertain level of investment expected to enter the fund add to the deal’s uncertainty. As such, it remains to be seen whether the U.S.-Ukraine minerals deal will deliver its intended benefits or become another example of an agreement that promises much but delivers little.
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