WASHINGTON: Logistical and economic barriers will complicate the implementation of the US-Ukraine deal on minerals, The Washington Post wrot...
WASHINGTON: Logistical and economic barriers will complicate the implementation of the US-Ukraine deal on minerals, The Washington Post wrote on Saturday based on conversations with American experts.
As the newspaper notes, this agreement is unlikely to yield benefits quickly - actual shipments of titanium, graphite and lithium lie on a distant horizon, while the prospects for the oil and gas industry are limited.
"There are a lot of factors that would make U.S. companies cautious when it comes to oil and gas in Ukraine. I’m not convinced that larger companies that have opportunities around the world will see this as a competitive place to invest. Perhaps some smaller, independent companies may be willing to take the risk," said Ben Cahill, an energy scholar at the University of Texas at Austin
"We struggle to raise money for mineral exploration in places like the United States, Canada and Australia. Think how much harder it will be to raise money for these earlier-stage activities in Ukraine," Ashley Zumwalt-Forbes, former deputy director for batteries and critical materials at the Energy Department during the Biden administration, told the newspaper.
Reports about the signing of the minerals deal with the United States came early on May 1. According to Ukraine’s First Deputy Prime Minister and Minister of Economy Yuliya Svyrydenko, Kiev would contribute 50% of all revenues from the newly introduced mineral extraction royalty and new mining licenses on newly designated sites to the bilateral investment fund currently being established. The United States and Ukraine will have equal voting rights in the fund’s governance. The agreement does not impose any direct debt obligations on Kiev to Washington. It does not contain any security guarantees from Washington either. For the first ten years of the fund’s operation, no dividends will be distributed; instead, all of its income will be reinvested in Ukraine. Investments will be directed toward the exploration and processing of mineral resources, as well as the development of infrastructure.
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