In early May 2025, First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko signed a historic agreement with the United States of America that established a reconstruction investment fund on behalf of Ukraine. This document went through several stages of preparation and withstood many rounds of discussion. Its content was widely discussed in numerous Ukrainian and foreign media channels, so we decided to talk to the Chairman of the Verkhovna Rada of Ukraine Committee on Environmental Policy and Environmental Management, Oleh Bondarenko, about how the mineral agreement will affect the development of the Ukrainian economy, what risks it carries, and what our country needs to do to make this partnership successful.
Why does the US need a subsoil agreement with Ukraine?
– In the current geopolitical climate, this agreement represents a political move on our part. It confirms that the United States is our top partner in the democratic world. At the same time, for the US, Ukraine remains a country that, despite the war, is developing and has significant potential now as well as after peace is restored. That is why the US has entered into such an exclusive agreement, which no other country has. Additionally, the USA is a pragmatic nation and aims to reduce its reliance on imports, particularly from China. Therefore, the US is seeking raw material suppliers that can replace those imports. Naturally, the US prefers to work with civilized countries, including European nations, which definitely includes Ukraine.
– One of the most explored subsoil resources in our country are titanium deposits. Titanium is used in the aerospace, automotive, medical (implants, prosthetics, cosmetics), and defense industries, as well as in the production of household, computer, and mobile appliances. And since these areas have become very active in the United States, of course, minerals such as titanium, lithium, graphite, rare earth metals, and uranium are what the US economy requires.
On economic prospects for Ukraine.
– Of course, the agreement is a huge boost for the development of our subsoil industry as a whole. We will not stop at the extraction of minerals. Our goal is the extraction of minerals with their subsequent enrichment and processing, and therefore the creation of critical raw material supply chains to foreign markets. We understand that this is not only a matter of attracting investment, but also of connecting our economy with the economies of other countries. And first of all, of course, this is the economy of the United States of America.
– At the moment, it is too early to give any assessment of the agreement’s impact on Ukraine’s GDP, on the investment climate, or other macroeconomic indicators. The extent to which the agreement will help create new mechanisms for the extraction and processing of minerals and for attracting foreign investment in this and related industries, which will give impetus to the development of related production sectors, for the ability to attract qualified personnel to these areas, for the development of territories and, accordingly, how it will affect the development of the economy as a whole, can only be seen when the agreement comes into effect.
– And in order for it to work, we must evaluate it not only as an agreement between two countries, but as a tool through which we can develop. Accordingly, we are talking about forecasting for many years ahead. And in this forecasting, of course, all positive factors and possible risks must be taken into account.
About environmental risks.
– We need to remember that we are progressing toward the European Union. Yes, we can make agreements with everyone, but we are adapting to European conventions, including environmental standards. The EU has repeatedly stressed that our compliance with environmental standards, the attraction of investment to develop a circular economy, and ensuring waste reuse are conditions for joining the European Union.
Our legislation already includes effective European mechanisms to prevent excessive environmental impact from certain sectors, including extractive industries. Recently, we introduced an integrated two-tier permit system, which allows businesses to obtain permits for emissions and discharges, while also requiring the reconfiguration of processes or creation of new facilities using the best available technologies and methods from the European Union. Naturally, this legislation still needs to be finalized. We must develop a regulatory framework that fully harmonizes mineral extraction and attracting large investments with the restrictions imposed by our internal regulations and legislation agreed upon with the EU. So, there’s still much work to be done.
On obstacles to the agreement’s implementation.
– I will immediately address the issue of dormant licenses, which, in my personal opinion, is somewhat overstated. Why? Because dormant licenses mainly concern oil and gas fields. Of course, hydrocarbons are a part of this agreement, but still, international investors are primarily interested in extracting minerals that require further processing, enrichment, and the production of finished products. Therefore, I believe we should focus not so much on dormant licenses, but on regulating our legislation more effectively.
– For example, currently we have a problem in which businesses first obtain the right to extract minerals through an auction or a production sharing agreement, and only afterward, according to the terms of our legislation, do they seek an opinion on the environmental impact assessment. As a result, when buying a license businesses are not certain that they will be able to extract minerals in those territories. This practice is also used in Europe, and we have already begun negotiations with the EU to develop a mechanism to obtain a preliminary opinion before the license is put up for auction. This way, businesses won’t proceed blindly, saving time and money. Additionally, we face major issues regarding mineral extraction on lands that already have owners. There are many challenges overall. I’ve only briefly highlighted those directly related to starting mineral extraction. There are also infrastructure issues and the need to provide electricity for extraction and processing, as this is a very energy-intensive industry.
How can Ukraine ensure the agreement’s effectiveness?
The agreement will not implement itself. It will only be successful when our subsoil use market and legislation are fully prepared for the execution and implementation of major projects. The agreement itself can serve as a catalyst for us to, first, process and digitize geological information, and to create new opportunities for attracting companies capable of conducting geological exploration at the highest level. In the practical sense, this issue remains in the same state as it was in the middle of the last century. Ultimately, this will help us resolve all of the current controversial issues for subsoil users, including land issues, deforestation concerns at mineral resource sites, and environmental impact assessments.
I also recommend conducting further due diligence on our legislation regarding the implementation of this agreement. We already have several tools that enable investors to access markets and utilize certain opportunities. Our laws concerning investor participation in subsoil use have been significantly improved; they are transparent and offer investors certain long-term guarantees. We are also developing mechanisms such as concessions and public-private partnerships. Since 2022, a state support mechanism for large-investment projects has been in place.
However, the question remains: is all this relevant to major projects under the agreement with the US? Therefore, we encourage the DFC, our partners, and potential investors to collaborate in understanding our legislation, engaging with government authorities, and identifying the most accessible mechanisms for attracting investment and supporting investor activity. At the same time, ongoing reforms in areas like the rule of law and legal protection for investments in courts and law enforcement agencies are essential.
How will economic cooperation with the US provide security guarantees for Ukraine?
The first guarantee has already been given to us. By concluding this agreement, we made it clear to everyone, especially to the aggressor country, that we have a dependable partner with whom we are prepared to finalize such complex deals quickly, even during difficult times. This serves as a signal that provides reassurance us we will continue receiving support, particularly through the agreement’s framework. After all, under its terms the United States can supply us with funds, weapons, and any equipment that is necessary for our survival.
– If we are talking about the long-term perspective and the possibility of attracting investment in mineral extraction, then it must be said that no investor enters this industry if they are not sure that the political and military situation is favorable enough to provide protection for their investment in the country where the extraction is carried out. Therefore, I am convinced that as soon as the first investor from the United States comes to us within the framework of this agreement (and, as you know, large entities with large lobbies, including in the countries of origin, invest in minerals), then new lobbyists will appear in the United States, in Congress, in the Senate, in the White House administration, who will demand that all US institutions provide Ukraine with more aid, more weapons, more political support. These are absolutely interconnected things, and I am sure that this is the only way it can work.
Economics or politics?
Of course, in the short term (one, two, five years) this is primarily a political agreement. However, it is important to consider it from a long-term perspective. Only a long-term outlook will help us build new economic sectors. We are talking about new sectors now, not only in terms of mineral extraction but also in creating supply chains for semi-finished and finished products abroad. So, in the long run this is definitely an economic agreement. It is an agreement that will help create a completely new country – one with a developed economy and new industrial sectors that complement existing industries in other nations. Of course, the global economy is not only growing but also transforming. We know that some industries that were previously highly profitable are now declining, while more technological industries are emerging to take their place.
– This agreement focuses on supporting our country and its interactions with other states in the economic sector. Most importantly, I do not want this agreement to lead to excessive exploitation of our subsoil through gas and oil drilling. Equally, I want any mineral extraction that occurs as we develop this sector to follow environmental standards. We must be responsible to future generations, so mineral extraction must align with environmental protection. I also hope that within 10 years this agreement will lead to the creation of new enterprises in the country, providing a significant boost not only to the mining sector but also to processing industries. This can serve as a catalyst for the growth of various economic and social sectors in our country.