Executive summary:
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An instrument of strategic entanglement: While publicly framed as a reconstruction tool, the United States–Ukraine Reconstruction Investment Fund (RIF) is better understood as a platform for geopolitical influence, commercial access, and long-term alignment between Ukraine and the US.
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Hybrid legal architecture: The Fund is established through a dual framework — a sovereign treaty and a commercial limited partnership — granting the US legal supremacy over conflicting Ukrainian laws without offering investor-state dispute settlement mechanisms.
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Preferential access for American investors: The Agreement grants US-backed entities preemptive rights to strategic assets and offtake contracts under favorable terms, challenging Ukraine’s EU accession obligations regarding market neutrality and equal treatment.
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Geoeconomic focus on critical minerals: The RIF prioritizes access to lithium, titanium, graphite, REEs, and uranium in regions critical for global supply chains – many of which are located in high-risk conflict zones.
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Security and infrastructure risks: Extraction projects face grave operational threats from Russian hybrid warfare, infrastructure sabotage, and unresolved local instability. Physical access does not guarantee commercial viability.
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Controversial revenue model: Ukraine’s contribution is structured as a future revenue pledge, effectively creating a shadow budgeting mechanism that commits strategic income streams to a partially foreign-controlled entity.
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Asymmetric governance and EU tensions: The Fund’s structure may strain U.S.–EU relations, as it bypasses earlier EU-Ukraine frameworks and creates parallel governance with preferential U.S. treatment in resource access.
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No guarantee of sustained US involvement: The RIF is not a binding commitment, but a geopolitical memorandum of understanding whose effectiveness depends on future follow-through and political will.
Introduction
On April 30, 2025, the governments of the United States and Ukraine signed the Agreement on the Establishment of a United States–Ukraine Reconstruction Investment Fund (“Agreement”). While publicly framed as a post-conflict development initiative, the Agreement should be more accurately understood as a layered instrument of geopolitical positioning and geoeconomic restructuring. It reflects a bilateral commitment at the sovereign level to create a new kind of strategic entanglement, where reconstruction is not merely a process of aid, but a platform for influence, market access, and alignment. As such, the Agreement exhibits the potential for redirection of some crucial global supply chains of increasingly and universally coveted critical minerals. This analysis examines the Agreement itself and its implications across legal, strategic, economic, and procedural dimensions, drawing on precedent, case studies, and structural critique. It concludes with a list of five variables which will determine its fate.
I. Legal architecture: contractual sovereignty vs. investment supremacy
Pursuant to the Agreement, the Reconstruction Investment Fund (“RIF” or “Fund”) is established through a dual-layered legal architecture comprising a sovereign-level treaty and a commercial partnership contract: the former being the intergovernmental Agreement itself, and the latter being the Limited Partnership Agreement (“LP Agreement”), concluded between the United States International Development Finance Corporation (DFC) and Ukraine’s State Agency on Support of Public-Private Partnership («Агентство з підтримки державно-приватного партнерства»). While the Agreement provides the legal and political foundation – guaranteeing sovereign support, regulatory adaptation, and the primacy of its provisions over conflicting Ukrainian law – the LP Agreement operationalizes the Fund as a commercial entity. It defines the institutional structure, capital flows, investment rules, and governance arrangements through which the RIF will function in practice.
The Agreement thus represents an unusual legal hybrid: a state-to-state framework that gives rise to a private law investment vehicle governed by a limited partnership agreement. It draws on elements familiar from bilateral investment treaties (BITs) and stabilization clauses found in oil and gas contracts, but without offering investor-state dispute settlement (ISDS). Article II.3 asserts that the provisions of the agreement shall prevail over any inconsistent domestic legislation, effectively creating a zone of contractual supremacy. This stabilizing function is critical to investor confidence in unstable jurisdictions, yet it also raises profound constitutional and political questions for Ukraine, particularly in light of its EU accession aspirations. EU legal doctrine requires that market access, competition, and state aid regimes remain neutral and non-discriminatory. The RIF structure, however, gives US-backed investors a formalized preemptive right to access investment opportunities and offtake contracts for key assets, subject only to “market-based” commercial terms that are not materially worse than those offered to third parties. This could challenge both the EU’s acquis communautaire, which needs to be implemented before Ukraine joins the EU, and the principles of equal treatment under Ukraine’s public law.
Moreover and crucially, the agreement lacks binding arbitration provisions. Article IX provides only for dispute resolution through consultation, a notable departure from most international economic agreements that grant third-party adjudicative ISDS competence, usually through ICSID or UNCITRAL mechanisms. While this may be a politically calculated move to avoid perceptions of neocolonialism or investor overreach, it introduces ambiguity and reduces enforceability in the event of contested contract interpretation, expropriation, or regulatory change. In legal terms, the Fund exists in a gray zone: a highly empowered actor with extraterritorial reach, but one shielded from many typical forms of legal challenge.
II. Geoeconomic intent: access to critical minerals and resource sovereignty
The primary function of the RIF, beyond reconstruction, is to secure long-term access for US and allied investors to Ukraine’s vast but underdeveloped reserves of critical minerals. While the agreement does not enumerate specific resources, the text refers repeatedly to “Natural Resource Relevant Assets”, with investment priority rights and offtake clauses embedded in licensing procedures (Article VII–VIII). These clauses function as strategic procurement guarantees, allowing the Fund to obtain early commercial intelligence and to negotiate preferential deals on lithium, titanium, graphite, rare earth elements (REEs), manganese, and uranium. Indeed, Ukraine’s geological potential is significant. The Shevchenkivske and Polokhivske lithium deposits alone are among the largest in Europe, and the Zavalivske graphite deposit in Kirovohrad is the largest in the continent. Ukrainian titanium production, concentrated in the Irshansk and Vilnohirsk mines, was pre-2022 among the world’s top five. The presence of these minerals aligns precisely with the strategy of the US to reshore and diversify supply chains away from China, which currently dominates global refining of lithium, REEs, and graphite.
However, most of these critical mineral assets remain either undeveloped or non-operational. Ukraine’s geological surveys are largely outdated, with many based on Soviet-era cartographic and geological data sets. This necessitates a fundamental re-mapping and verification of resource estimates before any large-scale investment can be responsibly deployed. Modern exploration and feasibility studies, conducted in accordance with international reporting standards such as JORC or NI 43-101, are expensive, time-consuming, and logistically intensive. Furthermore, Ukraine’s permitting procedures and environmental impact assessments, while nominally reformed in recent years, are under-resourced and often delayed by bureaucratic fragmentation, limited regional capacity, and conflicting legislative frameworks. These structural issues will pose non-trivial obstacles even in peaceful regions.
More critically, the majority of Ukraine’s most promising critical mineral deposits are concentrated in its eastern and southern oblasts, specifically Dnipropetrovsk, Donetsk, Zaporizhzhia, and Kherson. These territories have borne the brunt of Russian military offensives and have become theaters of long-term kinetic, cyber, and psychological warfare. Even if a formal ceasefire is reached, these oblasts will remain highly vulnerable to Russian hybrid operations. Russia has a well-documented history of sustaining influence through proxy sabotage, disinformation campaigns, and infrastructure disruption in contested borderlands, as seen for instance in Moldova’s Transnistria and Georgia’s South Ossetia. In Ukraine’s case, Russia should be expected to seek destabilization of strategic economic projects in Ukraine – particularly those involving Western capital or defense-linked supply chains – through a spectrum of non-military tools.
Critical infrastructure such as power lines, rail corridors, and road networks near these sites can become perpetual targets of electronic warfare, sabotage, and subversion. Reconstruction of these corridors will be capital-intensive, and maintaining secure supply routes from mine to port will require not just rebuilding but persistent protection. Additionally, many of these areas have high concentrations of Russian-speaking or politically ambivalent populations, who may become targets of manipulation aimed at sowing unrest or local resistance to extractive operations seen as, say, “Western looting”. These dynamics risk creating micro-insurgencies or industrial insecurity that cannot be addressed solely through formal security sector reform.
Moreover, Russian intelligence capabilities in these regions are deeply entrenched, particularly in Donetsk and Zaporizhzhia oblasts where Moscow operated extensive covert networks long before 2014. These networks have not been fully dismantled and could be reactivated to disrupt permit issuance, coerce local officials, or foment labor unrest. Investors considering long-term involvement in Ukraine’s extractive industries will therefore need more than standard political risk insurance. They will require multi-layered operational security frameworks, including community stabilization programs, counter-intelligence partnerships with Ukrainian agencies, and on-site security from private or state-supported entities.
III. Procedural mechanics: revenue pledging and investment sovereignty
Unlike traditional reconstruction funds or sovereign wealth platforms, the RIF is not capitalized by Ukraine with cash. Rather, Ukraine’s 50% contribution is a future revenue pledge, drawn from natural resource licensing income and remitted to a ring-fenced special fund within the state budget. This structure resembles Angola’s oil-backed debt contracts or the Democratic Republic of Congo’s resource-for-infrastructure arrangements with Chinese consortia, albeit with more transparency and governance guarantees. The revenue flow is codified in Article VI, with an irrevocable right to receive these funds passed to the Fund’s Ukrainian arm, backed by legislation and automatic transfer mechanisms.
This innovation has both stabilizing and destabilizing potential. It de-risks Ukrainian fiscal outlay by tying contributions to actual revenues, but it also creates a form of shadow budgeting, in which strategic state revenues are pre-committed to a partially foreign-controlled entity. In a postwar scenario of financial distress or political turnover, such arrangements may be challenged by domestic constituencies. The exclusion of third-party arbitration may become problematic precisely in such situations, as disputes over contractual performance, currency convertibility (Article V), or expropriation will lack neutral adjudicative forums.
IV. Security and technical feasibility: extractive risk in a war-prone territory
Any large-scale mining or infrastructure development in Ukraine in the coming decade will depend primarily on security. Ukraine’s critical mineral deposits are heavily concentrated in areas still threatened by Russian military activity. Kryvyi Rih, home to Black Iron’s Shymanivske iron ore project, remains within range of Russian missile systems. Although Black Iron has recently signed a land lease and secured a royalty-based offtake agreement with Anglo American, the company has acknowledged that project development remains contingent on a major improvement in the security environment. Landmine clearance, reconstruction of rail and port links, and site electrification are all needed.
Similarly, the Nikopol manganese basin and the energy transmission corridors for potential rare earth exports have suffered repeated damage. Even in theoretically secure zones, environmental degradation, lack of labor, and infrastructural gaps render the rapid development of export-grade mining operations improbable without extensive parallel investment. The RIF’s charter allows for reinvestment in enabling infrastructure, but there are no explicit safeguards or triggers to guarantee that infrastructure development precedes extractive licensing. Without coordination, the Fund may become trapped in a loop of underperformance, in which asset control exists without operational returns.
V. Strategic consequences: between guarantees and conditionalities
The RIF is a strategic instrument, not merely an economic one. It locks the United States into the political economy of Ukraine’s resource sector and binds Ukrainian assets to a Western-oriented framework. From a deterrence perspective, this may prove stabilizing: as the United States deepens its economic involvement in Ukraine’s resource sector, any attempt to destabilize the region—be it through military aggression, cyberattacks, or political interference—would risk US economic interests, thereby increasing the strategic costs for potential aggressors. However, the Agreement also binds Ukraine into a path-dependent logic of alliance-based economic development. The Fund explicitly excludes any participation by entities from states “that have acted adversely to Ukraine” during the war – an indirect reference to Russia, Belarus, and likely China. This exclusion may limit Ukraine’s diplomatic flexibility in Global South fora or its potential to engage in multi-aligned investment strategies, especially if Kiev one day wishes to open up its mining to Chinese investors.
The Agreement also has implications for EU–US relations. European firms are formally eligible to participate, but they do not benefit from the same preferential offtake rights and market access preferences as the US. This could spark tensions, especially as the EU implements its Critical Raw Materials Act and Clean Industrial Deal. This asymmetry raises concerns about fair competition and resource governance, especially given the pre-war, 2021 EU-Ukraine Strategic Partnership on Raw Materials and Batteries, which aimed to integrate Ukraine into the EU’s Critical Raw Materials Action Plan across the entire value chain while aligning its regulatory framework with EU ESG standards. The RIF’s legal supremacy clauses, which subordinate Ukrainian law to its bilateral obligations with the US are likely to clash with EU rules on competition neutrality, market access, and state aid. This dual-track governance risks making Ukraine a site of strategic rivalry between Western allies, undermining the cohesion of the West and Ukraine’s ability to fully leverage its resource wealth. Eventually Europe may find itself competing with the US for access to Ukraine’s resources.
For Ukraine, the Fund offers a vital pathway to reconstruction, international capital inflow, and closer integration into Western political-economic frameworks, but at the cost of partial conditionality. It entails binding legal limitations on domestic policy autonomy, preferential access for US-linked investors, and long-term pre-commitment of revenues from strategic resource sectors. Yet this is not a technocratic arrangement – it is the product of a deep geopolitical calculation made by Ukraine’s leadership in wartime conditions. Faced with limited fiscal capacity, the near exhaustion of international donor mechanisms, and the need to build structural deterrence against future Russian aggression, its government has sought to entrench US economic interests directly into the core of Ukraine’s recovery model. The thinking is strategic and forward-looking: if the US becomes commercially embedded in Ukraine’s postwar economy, it may be more likely to act as a guarantor – politically, if not militarily – of Ukraine’s long-term sovereignty. But the Agreement is by no means a silver bullet. It offers no binding guarantee of sustained US involvement and should be seen less as a concrete commitment than a geopolitical memorandum of understanding – a platform whose real weight will depend on follow-up: future projects, risk-sharing instruments, political continuity, and actual mining performed. Whether this is an acceptable price for sovereignty preservation through alliance is not only a question of external leverage, but of domestic legitimacy and elite consensus about the kind of state Ukraine aspires to be in the decades to come.
VI. Conclusion: a deal of strategic ingenuity at the edge of precarity
The RIF is more than a financial instrument. It is a structural intervention, and arguably the most far-reaching US imprint on Ukraine’s sovereign economic architecture since 1991. Its true significance lies in its potential to recast the postwar order in Eastern Europe: not through treaties alone, but through legal mechanisms, capital leverage, and resource pre-commitments that reach deep into the policymaking core of a wartime ally. Strategically, it embeds the US structurally into Ukraine’s sovereign decision-making in ways previously unachieved by bilateral military or political agreements. This is both the Fund’s promise and its peril.
Granting early legal access to Ukraine’s mineral and infrastructure assets positions the RIF as a gateway to the country’s economic future. But legal access is not operational control. Nor does it guarantee continuity, viability, or even safety. The Fund rests on the assumption that capital, legal guarantees, and institutional partnerships can overcome deep physical, security, and political uncertainties. Yet these cannot substitute for a durable security settlement or robust counter-hybrid defense mechanisms. Without both, the Fund’s assets may remain exposed to sabotage, contested control, or political disruption. Extractive timelines may be thrown off by missile strikes, disputed permits, or mined logistics corridors. Infrastructure may be funded but never connected to global markets. And investor confidence may wither beneath the weight of asymmetric risk. Russia will certainly exploit each and every opportunity which these vulnerabilities create.
The Fund’s success will hinge on five converging variables, any one of which could become a fault line.
First, Ukraine must sustain coherent legal and regulatory reform under war conditions and amid domestic political flux.
Second, the Fund must synchronize extractive and infrastructure development, avoiding the trap of upstream promises without downstream viability.
Third, Western allies must manage emerging frictions – especially between the US and EU – over preferential access and supply chain ownership.
Fourth, projects must internalize modern geological and environmental standards to be globally bankable, particularly as environmental criteria become non-negotiable for institutional capital.
And fifth, the entire framework must command political legitimacy within Ukraine: not only among its political elite, but across a society weary of sacrifice and alert to the appearance of sovereignty traded for capital.
If these elements can be brought into alignment, the RIF may perhaps prove to be a new geoeconomic archetype: a post-conflict platform that replaces short-term aid with embedded strategic partnerships, offering recipient states access to capital while giving donor states structural incentives to remain engaged. In doing so, it could provide a model for rebuilding shattered states without fostering dependency, and thus an answer, however imperfect, to the failures of both the Washington Consensus and China’s extractive diplomacy.
If these conditions cannot be met, the RIF risks becoming a cautionary tale. A case study in how high-trust, high-stakes instruments can falter when applied to low-trust, high-volatility environments. A reminder that legal precision does not equal strategic depth, and that access without control is merely paper.
In its form, the RIF is a geoeconomic memorandum of understanding dressed in institutional gravitas. Its future will be written not by the clauses it contains, but by the world that surrounds it: the next battles on Ukraine’s frontlines, the next electoral cycles in Washington and Brussels, and the next rounds of political negotiation inside Kyiv. Its legacy will depend not on its design, but on its durability.
Sources:
Governmental sources
Industry analyses
- Bradley, C. A., Goldsmith, J., & Hathaway, O. A. (2025, May 6). The U.S.-Ukraine agreement: Legality and transparency. Just Security. https://www.justsecurity.org/112981/us-ukraine-mineral-agreement-legality-transparency/(Just Security)
- Baskaran, G., & Schwartz, M. (2025, May 1). What to know about the signed U.S.-Ukraine minerals deal. Center for Strategic and International Studies (CSIS). https://www.csis.org/analysis/what-know-about-signed-us-ukraine-minerals-deal(CSIS)
- E3S Web of Conferences. (2024). Prospects for the lithium deposits development in Ukraine. https://www.e3s-conferences.org/articles/e3sconf/pdf/2024/56/e3sconf_sep2024_01001.pdf(e3s-conferences.org)
- Mindat.org. (n.d.). Zavalye graphite field, Holovanivsk Raion, Kirovohrad Oblast, Ukraine. https://www.mindat.org/loc-193357.html(Mindat)
- UMCC-Titanium. (n.d.). Vilnohirsk Mining and Metallurgical Plant. https://www.umcc-titanium.com/en/vilnohirsk-mining-and-metallurgical-plant/(umcc-titanium.com)
- UMCC-Titanium. (n.d.). Irshansk Mining and Processing Plant. https://www.umcc-titanium.com/en/irshansk-mining-and-processing-plant/(umcc-titanium.com)
- Meduza. (2025, April 1). The Ukrainian mineral deposits Trump is after. https://meduza.io/en/feature/2025/04/01/kyiv-s-buried-treasure(Meduza)
- Benchmark Minerals. (2025, February 12). Ukrainian graphite mine hopes for Trump deal, but says returns won’t be instant. https://www.reuters.com/markets/commodities/ukrainian-graphite-mine-hopes-trump-deal-say-returns-wont-be-instant-2025-02-12/(Reuters)
Press
Mountain_Pass_Rare_Earth_Mine_&_Processing_Facility
Autor foto: Public domain
Strategic and geoeconomic implications of the 2025 United States-Ukraine Reconstruction Investment Fund: A critical analysis
May 8, 2025
Author: Maciej Filip Bukowski
Mountain_Pass_Rare_Earth_Mine_&_Processing_Facility
Autor foto: Public domain
Strategic and geoeconomic implications of the 2025 United States-Ukraine Reconstruction Investment Fund: A critical analysis
Author: Maciej Filip Bukowski
Published: May 8, 2025
Executive summary:
An instrument of strategic entanglement: While publicly framed as a reconstruction tool, the United States–Ukraine Reconstruction Investment Fund (RIF) is better understood as a platform for geopolitical influence, commercial access, and long-term alignment between Ukraine and the US.
Hybrid legal architecture: The Fund is established through a dual framework — a sovereign treaty and a commercial limited partnership — granting the US legal supremacy over conflicting Ukrainian laws without offering investor-state dispute settlement mechanisms.
Preferential access for American investors: The Agreement grants US-backed entities preemptive rights to strategic assets and offtake contracts under favorable terms, challenging Ukraine’s EU accession obligations regarding market neutrality and equal treatment.
Geoeconomic focus on critical minerals: The RIF prioritizes access to lithium, titanium, graphite, REEs, and uranium in regions critical for global supply chains – many of which are located in high-risk conflict zones.
Security and infrastructure risks: Extraction projects face grave operational threats from Russian hybrid warfare, infrastructure sabotage, and unresolved local instability. Physical access does not guarantee commercial viability.
Controversial revenue model: Ukraine’s contribution is structured as a future revenue pledge, effectively creating a shadow budgeting mechanism that commits strategic income streams to a partially foreign-controlled entity.
Asymmetric governance and EU tensions: The Fund’s structure may strain U.S.–EU relations, as it bypasses earlier EU-Ukraine frameworks and creates parallel governance with preferential U.S. treatment in resource access.
No guarantee of sustained US involvement: The RIF is not a binding commitment, but a geopolitical memorandum of understanding whose effectiveness depends on future follow-through and political will.
Introduction
On April 30, 2025, the governments of the United States and Ukraine signed the Agreement on the Establishment of a United States–Ukraine Reconstruction Investment Fund (“Agreement”). While publicly framed as a post-conflict development initiative, the Agreement should be more accurately understood as a layered instrument of geopolitical positioning and geoeconomic restructuring. It reflects a bilateral commitment at the sovereign level to create a new kind of strategic entanglement, where reconstruction is not merely a process of aid, but a platform for influence, market access, and alignment. As such, the Agreement exhibits the potential for redirection of some crucial global supply chains of increasingly and universally coveted critical minerals. This analysis examines the Agreement itself and its implications across legal, strategic, economic, and procedural dimensions, drawing on precedent, case studies, and structural critique. It concludes with a list of five variables which will determine its fate.
I. Legal architecture: contractual sovereignty vs. investment supremacy
Pursuant to the Agreement, the Reconstruction Investment Fund (“RIF” or “Fund”) is established through a dual-layered legal architecture comprising a sovereign-level treaty and a commercial partnership contract: the former being the intergovernmental Agreement itself, and the latter being the Limited Partnership Agreement (“LP Agreement”), concluded between the United States International Development Finance Corporation (DFC) and Ukraine’s State Agency on Support of Public-Private Partnership («Агентство з підтримки державно-приватного партнерства»). While the Agreement provides the legal and political foundation – guaranteeing sovereign support, regulatory adaptation, and the primacy of its provisions over conflicting Ukrainian law – the LP Agreement operationalizes the Fund as a commercial entity. It defines the institutional structure, capital flows, investment rules, and governance arrangements through which the RIF will function in practice.
The Agreement thus represents an unusual legal hybrid: a state-to-state framework that gives rise to a private law investment vehicle governed by a limited partnership agreement. It draws on elements familiar from bilateral investment treaties (BITs) and stabilization clauses found in oil and gas contracts, but without offering investor-state dispute settlement (ISDS). Article II.3 asserts that the provisions of the agreement shall prevail over any inconsistent domestic legislation, effectively creating a zone of contractual supremacy. This stabilizing function is critical to investor confidence in unstable jurisdictions, yet it also raises profound constitutional and political questions for Ukraine, particularly in light of its EU accession aspirations. EU legal doctrine requires that market access, competition, and state aid regimes remain neutral and non-discriminatory. The RIF structure, however, gives US-backed investors a formalized preemptive right to access investment opportunities and offtake contracts for key assets, subject only to “market-based” commercial terms that are not materially worse than those offered to third parties. This could challenge both the EU’s acquis communautaire, which needs to be implemented before Ukraine joins the EU, and the principles of equal treatment under Ukraine’s public law.
Moreover and crucially, the agreement lacks binding arbitration provisions. Article IX provides only for dispute resolution through consultation, a notable departure from most international economic agreements that grant third-party adjudicative ISDS competence, usually through ICSID or UNCITRAL mechanisms. While this may be a politically calculated move to avoid perceptions of neocolonialism or investor overreach, it introduces ambiguity and reduces enforceability in the event of contested contract interpretation, expropriation, or regulatory change. In legal terms, the Fund exists in a gray zone: a highly empowered actor with extraterritorial reach, but one shielded from many typical forms of legal challenge.
II. Geoeconomic intent: access to critical minerals and resource sovereignty
The primary function of the RIF, beyond reconstruction, is to secure long-term access for US and allied investors to Ukraine’s vast but underdeveloped reserves of critical minerals. While the agreement does not enumerate specific resources, the text refers repeatedly to “Natural Resource Relevant Assets”, with investment priority rights and offtake clauses embedded in licensing procedures (Article VII–VIII). These clauses function as strategic procurement guarantees, allowing the Fund to obtain early commercial intelligence and to negotiate preferential deals on lithium, titanium, graphite, rare earth elements (REEs), manganese, and uranium. Indeed, Ukraine’s geological potential is significant. The Shevchenkivske and Polokhivske lithium deposits alone are among the largest in Europe, and the Zavalivske graphite deposit in Kirovohrad is the largest in the continent. Ukrainian titanium production, concentrated in the Irshansk and Vilnohirsk mines, was pre-2022 among the world’s top five. The presence of these minerals aligns precisely with the strategy of the US to reshore and diversify supply chains away from China, which currently dominates global refining of lithium, REEs, and graphite.
However, most of these critical mineral assets remain either undeveloped or non-operational. Ukraine’s geological surveys are largely outdated, with many based on Soviet-era cartographic and geological data sets. This necessitates a fundamental re-mapping and verification of resource estimates before any large-scale investment can be responsibly deployed. Modern exploration and feasibility studies, conducted in accordance with international reporting standards such as JORC or NI 43-101, are expensive, time-consuming, and logistically intensive. Furthermore, Ukraine’s permitting procedures and environmental impact assessments, while nominally reformed in recent years, are under-resourced and often delayed by bureaucratic fragmentation, limited regional capacity, and conflicting legislative frameworks. These structural issues will pose non-trivial obstacles even in peaceful regions.
More critically, the majority of Ukraine’s most promising critical mineral deposits are concentrated in its eastern and southern oblasts, specifically Dnipropetrovsk, Donetsk, Zaporizhzhia, and Kherson. These territories have borne the brunt of Russian military offensives and have become theaters of long-term kinetic, cyber, and psychological warfare. Even if a formal ceasefire is reached, these oblasts will remain highly vulnerable to Russian hybrid operations. Russia has a well-documented history of sustaining influence through proxy sabotage, disinformation campaigns, and infrastructure disruption in contested borderlands, as seen for instance in Moldova’s Transnistria and Georgia’s South Ossetia. In Ukraine’s case, Russia should be expected to seek destabilization of strategic economic projects in Ukraine – particularly those involving Western capital or defense-linked supply chains – through a spectrum of non-military tools.
Critical infrastructure such as power lines, rail corridors, and road networks near these sites can become perpetual targets of electronic warfare, sabotage, and subversion. Reconstruction of these corridors will be capital-intensive, and maintaining secure supply routes from mine to port will require not just rebuilding but persistent protection. Additionally, many of these areas have high concentrations of Russian-speaking or politically ambivalent populations, who may become targets of manipulation aimed at sowing unrest or local resistance to extractive operations seen as, say, “Western looting”. These dynamics risk creating micro-insurgencies or industrial insecurity that cannot be addressed solely through formal security sector reform.
Moreover, Russian intelligence capabilities in these regions are deeply entrenched, particularly in Donetsk and Zaporizhzhia oblasts where Moscow operated extensive covert networks long before 2014. These networks have not been fully dismantled and could be reactivated to disrupt permit issuance, coerce local officials, or foment labor unrest. Investors considering long-term involvement in Ukraine’s extractive industries will therefore need more than standard political risk insurance. They will require multi-layered operational security frameworks, including community stabilization programs, counter-intelligence partnerships with Ukrainian agencies, and on-site security from private or state-supported entities.
III. Procedural mechanics: revenue pledging and investment sovereignty
Unlike traditional reconstruction funds or sovereign wealth platforms, the RIF is not capitalized by Ukraine with cash. Rather, Ukraine’s 50% contribution is a future revenue pledge, drawn from natural resource licensing income and remitted to a ring-fenced special fund within the state budget. This structure resembles Angola’s oil-backed debt contracts or the Democratic Republic of Congo’s resource-for-infrastructure arrangements with Chinese consortia, albeit with more transparency and governance guarantees. The revenue flow is codified in Article VI, with an irrevocable right to receive these funds passed to the Fund’s Ukrainian arm, backed by legislation and automatic transfer mechanisms.
This innovation has both stabilizing and destabilizing potential. It de-risks Ukrainian fiscal outlay by tying contributions to actual revenues, but it also creates a form of shadow budgeting, in which strategic state revenues are pre-committed to a partially foreign-controlled entity. In a postwar scenario of financial distress or political turnover, such arrangements may be challenged by domestic constituencies. The exclusion of third-party arbitration may become problematic precisely in such situations, as disputes over contractual performance, currency convertibility (Article V), or expropriation will lack neutral adjudicative forums.
IV. Security and technical feasibility: extractive risk in a war-prone territory
Any large-scale mining or infrastructure development in Ukraine in the coming decade will depend primarily on security. Ukraine’s critical mineral deposits are heavily concentrated in areas still threatened by Russian military activity. Kryvyi Rih, home to Black Iron’s Shymanivske iron ore project, remains within range of Russian missile systems. Although Black Iron has recently signed a land lease and secured a royalty-based offtake agreement with Anglo American, the company has acknowledged that project development remains contingent on a major improvement in the security environment. Landmine clearance, reconstruction of rail and port links, and site electrification are all needed.
Similarly, the Nikopol manganese basin and the energy transmission corridors for potential rare earth exports have suffered repeated damage. Even in theoretically secure zones, environmental degradation, lack of labor, and infrastructural gaps render the rapid development of export-grade mining operations improbable without extensive parallel investment. The RIF’s charter allows for reinvestment in enabling infrastructure, but there are no explicit safeguards or triggers to guarantee that infrastructure development precedes extractive licensing. Without coordination, the Fund may become trapped in a loop of underperformance, in which asset control exists without operational returns.
V. Strategic consequences: between guarantees and conditionalities
The RIF is a strategic instrument, not merely an economic one. It locks the United States into the political economy of Ukraine’s resource sector and binds Ukrainian assets to a Western-oriented framework. From a deterrence perspective, this may prove stabilizing: as the United States deepens its economic involvement in Ukraine’s resource sector, any attempt to destabilize the region—be it through military aggression, cyberattacks, or political interference—would risk US economic interests, thereby increasing the strategic costs for potential aggressors. However, the Agreement also binds Ukraine into a path-dependent logic of alliance-based economic development. The Fund explicitly excludes any participation by entities from states “that have acted adversely to Ukraine” during the war – an indirect reference to Russia, Belarus, and likely China. This exclusion may limit Ukraine’s diplomatic flexibility in Global South fora or its potential to engage in multi-aligned investment strategies, especially if Kiev one day wishes to open up its mining to Chinese investors.
The Agreement also has implications for EU–US relations. European firms are formally eligible to participate, but they do not benefit from the same preferential offtake rights and market access preferences as the US. This could spark tensions, especially as the EU implements its Critical Raw Materials Act and Clean Industrial Deal. This asymmetry raises concerns about fair competition and resource governance, especially given the pre-war, 2021 EU-Ukraine Strategic Partnership on Raw Materials and Batteries, which aimed to integrate Ukraine into the EU’s Critical Raw Materials Action Plan across the entire value chain while aligning its regulatory framework with EU ESG standards. The RIF’s legal supremacy clauses, which subordinate Ukrainian law to its bilateral obligations with the US are likely to clash with EU rules on competition neutrality, market access, and state aid. This dual-track governance risks making Ukraine a site of strategic rivalry between Western allies, undermining the cohesion of the West and Ukraine’s ability to fully leverage its resource wealth. Eventually Europe may find itself competing with the US for access to Ukraine’s resources.
For Ukraine, the Fund offers a vital pathway to reconstruction, international capital inflow, and closer integration into Western political-economic frameworks, but at the cost of partial conditionality. It entails binding legal limitations on domestic policy autonomy, preferential access for US-linked investors, and long-term pre-commitment of revenues from strategic resource sectors. Yet this is not a technocratic arrangement – it is the product of a deep geopolitical calculation made by Ukraine’s leadership in wartime conditions. Faced with limited fiscal capacity, the near exhaustion of international donor mechanisms, and the need to build structural deterrence against future Russian aggression, its government has sought to entrench US economic interests directly into the core of Ukraine’s recovery model. The thinking is strategic and forward-looking: if the US becomes commercially embedded in Ukraine’s postwar economy, it may be more likely to act as a guarantor – politically, if not militarily – of Ukraine’s long-term sovereignty. But the Agreement is by no means a silver bullet. It offers no binding guarantee of sustained US involvement and should be seen less as a concrete commitment than a geopolitical memorandum of understanding – a platform whose real weight will depend on follow-up: future projects, risk-sharing instruments, political continuity, and actual mining performed. Whether this is an acceptable price for sovereignty preservation through alliance is not only a question of external leverage, but of domestic legitimacy and elite consensus about the kind of state Ukraine aspires to be in the decades to come.
VI. Conclusion: a deal of strategic ingenuity at the edge of precarity
The RIF is more than a financial instrument. It is a structural intervention, and arguably the most far-reaching US imprint on Ukraine’s sovereign economic architecture since 1991. Its true significance lies in its potential to recast the postwar order in Eastern Europe: not through treaties alone, but through legal mechanisms, capital leverage, and resource pre-commitments that reach deep into the policymaking core of a wartime ally. Strategically, it embeds the US structurally into Ukraine’s sovereign decision-making in ways previously unachieved by bilateral military or political agreements. This is both the Fund’s promise and its peril.
Granting early legal access to Ukraine’s mineral and infrastructure assets positions the RIF as a gateway to the country’s economic future. But legal access is not operational control. Nor does it guarantee continuity, viability, or even safety. The Fund rests on the assumption that capital, legal guarantees, and institutional partnerships can overcome deep physical, security, and political uncertainties. Yet these cannot substitute for a durable security settlement or robust counter-hybrid defense mechanisms. Without both, the Fund’s assets may remain exposed to sabotage, contested control, or political disruption. Extractive timelines may be thrown off by missile strikes, disputed permits, or mined logistics corridors. Infrastructure may be funded but never connected to global markets. And investor confidence may wither beneath the weight of asymmetric risk. Russia will certainly exploit each and every opportunity which these vulnerabilities create.
The Fund’s success will hinge on five converging variables, any one of which could become a fault line.
First, Ukraine must sustain coherent legal and regulatory reform under war conditions and amid domestic political flux.
Second, the Fund must synchronize extractive and infrastructure development, avoiding the trap of upstream promises without downstream viability.
Third, Western allies must manage emerging frictions – especially between the US and EU – over preferential access and supply chain ownership.
Fourth, projects must internalize modern geological and environmental standards to be globally bankable, particularly as environmental criteria become non-negotiable for institutional capital.
And fifth, the entire framework must command political legitimacy within Ukraine: not only among its political elite, but across a society weary of sacrifice and alert to the appearance of sovereignty traded for capital.
If these elements can be brought into alignment, the RIF may perhaps prove to be a new geoeconomic archetype: a post-conflict platform that replaces short-term aid with embedded strategic partnerships, offering recipient states access to capital while giving donor states structural incentives to remain engaged. In doing so, it could provide a model for rebuilding shattered states without fostering dependency, and thus an answer, however imperfect, to the failures of both the Washington Consensus and China’s extractive diplomacy.
If these conditions cannot be met, the RIF risks becoming a cautionary tale. A case study in how high-trust, high-stakes instruments can falter when applied to low-trust, high-volatility environments. A reminder that legal precision does not equal strategic depth, and that access without control is merely paper.
In its form, the RIF is a geoeconomic memorandum of understanding dressed in institutional gravitas. Its future will be written not by the clauses it contains, but by the world that surrounds it: the next battles on Ukraine’s frontlines, the next electoral cycles in Washington and Brussels, and the next rounds of political negotiation inside Kyiv. Its legacy will depend not on its design, but on its durability.
Sources:
Governmental sources
Industry analyses
Press
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