After signing a key agreement giving the U.S. a stake in Ukrainian mineral resources, Kiev is taking active steps to demonstrate to the Donald Trump administration the effectiveness of the partnership. On Monday, June 16, the Ukrainian government approved initial measures allowing private companies to start developing one of the country's largest lithium deposits - Dobra.
About it writes The New York Times, reported Dengi.ua .
It is noted that according to two government representatives, this project was the first to be approved under the agreement. This is about the Dobra field, located in central Ukraine. The government has agreed to develop recommendations for opening a tender among investors wishing to obtain the right to develop it. Lithium, the mining of which is planned at this site, plays a key role in the production of batteries for electric cars and other devices.
"Among the likely bidders is a consortium of investors that includes TechMet, an energy investment firm partly owned by the U.S. government, and Ronald S. Lauder, a billionaire friend of President Trump. The group has long expressed interest in the Dobra lithium deposit, urging Ukrainian President Volodymyr Zelensky to open bidding in late 2023," the publication reported.
At the same time, under the terms of the broader deal, half of Ukraine's revenues from mining will be directed to a joint investment fund with the US. These funds are planned to be reinvested in the development of the Ukrainian economy, while the US side will retain the right to part of the profits.
It is reported that it may take several weeks to work out the tender terms. So far, the Ukrainian government has not made an official statement on the possibility of launching the bidding, and the final decision may be revised.
Nevertheless, Monday's decision signals Ukraine's eagerness to show Washington that implementation of the agreement is gaining momentum - especially amid fears that the U.S. may distance itself from the war as cease-fire talks with Russia have stalled.
Washington, for its part, has shown a steady interest in Ukrainian mineral resources, seeing them as an alternative to supplies from China, which now dominates the global rare earth elements market. Beijing, in turn, has already used restrictions on the export of such resources as leverage in trade negotiations with Trump.
At the same time, analysts about the industry warn: most projects associated with the agreement will take at least a decade to reach full capacity. That means the real impact of the joint fund won't start soon - perhaps as soon as the end of Trump's presidential term.
Experts say the path to mining is fraught with challenges, among them:
- outdated geologic studies that could obscure the true value of Ukraine's subsurface;
- damaged power plants needed to extract the resources that need repairs;
- an ongoing war that makes any investment inherently risky;
- corruption, which has long haunted the sale of state assets.
"To mitigate the risks, TechMet and other investors are advocating for an investment tool known as a production sharing agreement, a contract that allows investors to extract minerals in exchange for sharing production with the Ukrainian government. This type of agreement is attractive to investors because it typically lasts for several decades, providing long-term stability, while also offering tax incentives and allowing disputes to be settled through international arbitration tribunals. The bidding that Ukraine launched on Monday for the Dobra lithium deposit was conducted under a production sharing agreement," the newspaper summarized.
