Ukraine should be allowed to focus on a green recovery rather than fighting an exploitative and humiliating resource-grab from the USA
This week, Ukraine representatives will travel to the US, hoping to negotiate a better minerals deal for the country still at war with Russia.
The last draft deal, proposed by Trump in late March, demanded half of Ukraine’s revenues raised by all new oil, gas and mining projects in the country, now and forever.
This put $353 billion of Ukraine’s oil and gas money at risk of being seized by the US – plus estimated billions more from mining projects – according to new analysis by Global Witness.
The issues with that deal are manifold. Trump’s plan to create a US-Ukraine "Reconstruction Investment Fund" is a seemingly benevolent gesture that belies further attempts to enrich the US at Ukraine’s expense.
This arrangement would mean half of the revenues from new oil, gas and mining projects in Ukraine would end up in this fund, plus half the revenues from any new infrastructure that’s connected to these projects – like pipelines and ports.
Alarmingly, the US would have overall control of the fund. And there is no apparent mention of the money being spent on rebuilding Ukraine’s schools, hospitals, or other essential public services – only that it would help the US to recoup its “war debt”.
But it’s not just oil and gas Trump has his eyes on. Trump’s proposal would allow Washington to stop Ukraine from selling its minerals to any country that the US decides it doesn’t want to have these supplies.
These are far from the only hyper-exploitative parts of the deal, which has been described as “unprecedented in the history of modern diplomacy and state relations”.
The US-controlled investment fund would also have the right of first refusal on all new projects to develop Ukraine’s oil, gas and mineral reserves. This likely means that companies from other countries would not be allowed to invest in these projects unless the US had first turned down the opportunity.
It would allow Washington to cherry pick the most lucrative prospects and pave the way for US companies to take over a huge slice of Ukraine’s resource riches.
In case this wasn’t humiliating enough, the draft deal requires Kyiv to present investment opportunities in oil, gas and mining projects to the fund, so its US managers can size up their profit-making potential.
Ukraine’s government would have to disclose resource projects’ business plans, geological reports and financial projections – potentially commercially sensitive information – as well as “any other material that is reasonably available.”
This applies to both new and existing projects, according to the Wall Street Journal.
Trump, you could say, is forcing Ukraine to hold a beauty pageant for its natural resources, to be ranked by US judges.
Yet even if Ukraine had full access to its oil, gas and coal revenues to fund reconstruction, this would take it down a path of nature destruction, dirty air and climate damage, instead of using the country’s bountiful stores of green energy and breaking its dependency on fossil fuels.
Russia’s invasion of Ukraine hasn’t just caused death and destruction in the country. It’s had a huge environmental impact, damaging biodiversity and polluting water sources.
But some plans to rebuild the country have focused on a sustainable future, rather than an ongoing reliance on exactly the oil and gas that Trump is hoping to take.
As Svitlana Romanko, a leading Ukrainian climate campaigner, says in Rolling Stone: “Ukraine’s future should be built on fair trade, environmental protection, and a just transition for workers and communities – not the neocolonial plundering of our natural resources.”
Ukraine should be able to focus on a green reconstruction, not fighting the world’s richest country for its resources while battling Russia on the front lines. It’s time we built a global energy system that puts people and planet first.
