Ukraine Business Roundup — Making sense of the minerals deal

The following is the May 6, 2025 edition of our Ukraine Business Roundup weekly newsletter. To get the biggest news in business and tech from Ukraine directly in your inbox, subscribe here.

As I’m sure you saw, the U.S. and Ukraine finally signed the minerals agreement after months and months of back and forth and tense negotiations. Most people are in agreement that this version of the deal is much fairer than earlier versions observers called “colonial” and “exploitative,” but that doens’t mean people are ready to celebrate.

Actually, the deal’s signing seems to have inspired more questions than answers, particularly, what this means for Ukraine’s long-term security (unclear), and what this means for investment (also unclear).

Not to mention the fact that President Volodymyr Zelensky and his team are being accused publicly in Ukraine over having lied about only signing the first of a series of agreements — the intergovernmental or “political” agreement on the joint investments — in D.C. last week. We’ll get into that a bit later.

On security: Kyiv was not able to secure any firm security guarantees as part of the deal, something Zelensky had kept pushing for throughout the negotiations. What the two sides did appear to agree on was that any future U.S. aid, including military assistance, could be counted toward the deal (instead of as repayment for past aid.)

So under this current deal, the U.S. will contribute to a joint fund either through direct payments or military assistance. Ukraine’s contribution will be 50% of future revenue with royalties from new licenses for critical minerals, gas, and oil exploration. More detailed information on the agreement here.

In other words, Ukraine offers up access to and revenues from its natural resources in exchange for potential future U.S. military aid that we aren’t even sure the U.S. (read: Donald Trump’s administration) is ready to provide.

As an editor from Ukrainian publication ZN.ua aptly pointed out today, the wording from the signed agreement tells us all we need to know: “If, after the Effective Date, the Government of the United States of America delivers new military assistance to the Government of Ukraine in any form (including the donation of weapons systems, ammunition, technology or training)...” Emphasis on the “if.”

Another argument on security that has been floating around (and that barely holds up) is that the mere presence of American companies in Ukraine is a security guarantee. When Russia launched its full-scale invasion in 2022, it didn’t seem to mind whatsoever that there were and have been for decades, many large American and multinational corporations operating in Ukraine.

On investment: There is one thing I think that needs to be made clear right up front. Without a secure Ukraine, investors will continue to stay away. As Ed Chow, a non-resident senior associate at the Center for Strategic and International Studies who knows Ukraine well, pointed out to our reporter, the signed deal the public has seen doesn’t include any provisions about providing risk insurance at a reasonable price that could attract investors.

The new deal is "warm words rather than real investment, Timothy Ash, an associate fellow at Chatham House's Russia and Eurasia Program, told our reporter. “I cannot see any big and meaningful investment in Ukraine until security is assured. And this deal does nothing there.”

And industry experts told Reuters that the deal is unlikely to deliver significant financial returns for at least a decade. And then there is also the issue of mapping out Ukraine’s critical minerals — something that, we’ve discovered in our reporting, remains completely elusive.

“Clearly there was work done in negotiations, but I still don’t see a really comprehensive agreement that, from an industry investor point of view, says, ‘Okay, this changes everything,’” Chow said.

Now onto the drama unfolding around the deal in Ukraine. As Economy Minister Yuliia Svyrydenko was on her way to D.C. to sign the deal, reports began to emerge that the U.S. was expecting Ukraine to sign three agreements: an intergovernmental agreement on resources, the “fund agreement,” and then a third “technical agreement,” with the latter two being the agreements that will govern the terms of the investments.

Given past leaked versions of the fund agreement had shocked the public for giving the U.S. unprecedented access to Ukraine’s resources, this caused quite a stir.

But when Svyrydenko announced the signing, it was done so in a way as to make it seem that only the first of the three was signed. Now, reporters and public commentators in Ukraine are coming out saying — citing their sources — that in fact all three have been signed. Svyrydenko herself today denied the reports, according to opposition MP Yaroslav Zhelezniak.

And not only that — but Ukraine’s lawmakers, who have to ratify the agreement, have apparently only been shown the first, “officially” signed agreement, but have been told verbally the contents of the others, according to ZN.ua.

To boot, Zelensky publicly called on the U.S. to cancel visas to Ukrainian lawmakers that don’t vote on ratification.

Drama aside — here’s where it’s all headed in the near future: Ukraine’s parliamentary committee on foreign policy today approved the deal for ratification. On May 6-8, Svyrydenko and other high level officials will meet with parliamentary factions to discuss the deal, and on May 8, it’ll get put up for a vote. According to Zhelezniak, they have the votes and “no one will disrupt it.” We shall see.

Reforming a broken law enforcement agency

If you’ve been reading this newsletter for a while, you might remember my frequent ramblings about Ukraine’s Bureau of Economic Security — infamous for its bust-down-the-door raids on businesses. Many in Ukraine saw the bureau’s behavior as intimidation tactics, or even attempts to extort Ukrainian companies for various reasons.

After several high-profile incidents involving the agency — including controversial raids and the arrest of businessmen — calls for reform ballooned and a selection process for a new head of the bureau was launched. That process is now nearing the finish line, with 16 candidates making it to the final round.

RFE/RL’s Schemes Investigative project reached out to the candidates with questions and published some of their responses, highlighting several red flags among the finalists.

Among them: the reported frontrunner, Ruslan Pakhomov, previously worked for a media company owned by Ukraine’s richest man, Rinat Akhmetov — and once had his bank account closed after the bank flagged it for suspected money laundering.

Stay tuned for more.

Opinion: Backroom deals and battlefield realities: Ukraine at the IMF Spring Meetings

At this year’s Spring Meetings of the International Monetary Fund and World Bank, the fund emphasized the familiar refrain: the need for stronger revenue generation and disciplined fiscal policy, Center for Economic Strategy Deputy Director Maria Repko writes in a recent op-ed for the Kyiv Independent. While essential, these prescriptions have become an almost ritualistic part of Ukraine’s dialogue with international lenders.

Meanwhile, concerns over Ukraine's debt sustainability continue to loom large, threatening to narrow the space for additional aid. True to form, both the IMF and the World Bank remain skeptical about confiscating frozen Russian assets. With new grants increasingly scarce and debt sustainability concerns limiting access to additional loans, advancing the effort to seize Russian assets remains a critical task Ukraine cannot afford to let slip.

Read the full opinion piece here.

What else is in the news

Ukrainian EdTech company Headway Inc. makes it to top 5 of Time Magazine’s Top EdTech Companies 2025 rating

Headway Inc. (until recently, just called Headway), an education tech phone application with over 150 million users worldwide, placed fourth on the global list, climbing more than 90 positions above popular apps Coursera, Duolingo, BetterUp in the ranking. The ranking takes into account financial strength and industry impact. Headway Inc. has several apps, including a book summary app that condenses and summarizes mainly self-improvement books that take anywhere from a few minutes to 15 minutes to read or listen to.

Son of ex-Motor Sich president detained in Monaco for $650 million asset theft

Oleksandr Bohuslayev, son of Motor Sich's former president Vyacheslav Bohuslayev, was detained in Monaco on fraud charges linked to a $650 million asset scheme, Ukraine's Security Service (SBU) announced on May 2. Vyacheslav Bohuslayev, the former president of Motor Sich, Ukraine's leading aircraft engine manufacturer, has been in custody since 2022 on charges of collaboration with Russia. Investigators claim Oleksandr Bohuslayev helped his father illegally obtain shares in the strategic defense manufacturer before selling them to third parties. He faces up to 12 years in prison.

Ukroboronprom posts $31.5 million profit as production triples

Ukraine's largest state-owned defense company Ukroboronprom reported a consolidated net profit of Hr 1.31 billion ($31.5 million) for the previous year, the company said on May 2. The company's enterprises tripled production volumes in 2024 compared to 2023, with a 36% increase in contracts. Almost all production (96%) consisted of new or upgraded military equipment in 2024. Ukroboronprom is a leading strategic manufacturer of weapons and military hardware in Ukraine.

In case you missed it

Luxury watches, a collection of 20th-century military uniforms, and a very expensive piano — these are just a few of the intriguing things revealed in the mandatory annual declaration of financial assets submitted by Ukrainian MPs last month. The Kyiv Independent took a look at the declarations of some of Ukraine's most well-known politicians, including President Volodymyr Zelensky himself, to see what they revealed. Read more here.