**Ukraine’s Mining and Energy Boost May Take a Decade**
A recent investment agreement between Ukraine and the United States, championed by US President Donald Trump, aims to revitalize Ukraine’s mining and energy sectors. However, experts warn that this deal may not deliver results for at least a decade.
The main obstacles hindering project implementation include Russia’s ongoing war on Ukraine, damaged infrastructure, classified Soviet-era geological data, and the risk of corruption. Even more concerning is the contamination from unexploded ordnance in some areas.
**A Long and Challenging Road Ahead**
Industry leaders are cautioning that mining operations in Ukraine require a lot of time and private sector investment. Eric Rasmussen, former head of natural resources at the European Bank for Reconstruction and Development, stated that it may take 10-15 years to see significant progress.
Peter Bryant from advisory group Clareo noted that this deal does little to de-risk the supply chain in the next decade. Ukraine has a rich resource base, including iron ore, coal, lithium, graphite, and titanium-bearing ores. It’s also Europe’s third-largest gas producer. However, mining projects will face years of geological exploration before reaching feasibility stages.
**Ukraine Seeks Long-Term Investment**
While some investors remain optimistic about the deal, others are more cautious. Ukrainian Minister Yulia Svyrydenko acknowledged that profits from the joint “reconstruction investment fund” would not be distributed for at least a decade. The minister stated that instead of distributing profits, the funds will be reinvested.
TechMet, a US-backed company seeking to secure Ukrainian lithium, welcomed the deal but noted it would take time and money to develop sites. DTEK, Ukraine’s top private energy firm, confirmed talks with US companies and expressed enthusiasm for the signal that Ukraine was “open for business.”
**A Cautious Outlook**
However, some experts remain skeptical about the prospects of this agreement. One mining executive questioned the idea that there are vast resources waiting to be tapped, saying “this romantic idea is just not the case.” Despite optimism among some investors, others are more cautious.
In other news, Ukraine continues to invest in repairing and maintaining its energy system amidst ongoing Russian attacks. This includes a $550 million investment to prepare for the autumn-winter period of 2023-2024.
**Conclusion**
The investment agreement between Ukraine and the United States is ambitious, but it’s clear that implementing these projects will be a long and challenging process. With significant obstacles in place, investors should be cautious about their expectations. While some progress may be made in the coming years, meaningful results are unlikely to materialize for at least a decade.
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