A Billions-Dollar Deal Without the Billions: Why Haven't U.S. Investments in Ukraine's Natural Resources Materialized Yet?

Then, on May 1, 2025, Ukraine and the United States signed an agreement to establish a joint Reconstruction Investment Fund, which was intended to serve as a mechanism for attracting U.S. investment into Ukrainian projects, particularly in the critical minerals sector.

Since then, the fund has become operational, received seed capital, opened the application process for investments, and even made its first investment. However, no major U.S. investment project has yet been launched directly in the sector of critical mineral extraction or the construction of new processing facilities. “Shelter” investigated what is still holding back the flow of investment into the Ukrainian economy.

From Political Agreement to Investment Mechanism

“The goal for this year is to sign the first three investment agreements. These should be ‘strong, well-structured projects in priority sectors’ that will yield tangible results for recovery and be attractive to international investors,” said Oleksiy Sobolev, then Minister of Economy, Environment, and Agriculture of Ukraine, earlier this year.

The first year of the agreement’s implementation was focused on establishing the investment infrastructure itself. If we evaluate the results not by the number of mines opened or new quarries, but by institutional changes, then some progress has indeed been made.

Following the signing of the intergovernmental agreement, the countries established the Ukrainian-American Reconstruction Investment Fund (URIF—ed.), which is intended to serve as the primary financial instrument for attracting capital. Over the following months, the fund’s governing bodies were formed, investment policies were approved, and decision-making procedures and project financing mechanisms were established. Only after this preparatory work was completed did the fund actually begin its operational activities.

The fund’s initial capital consisted of contributions from the United States and Ukraine of $75 million each. “So far, we have seen only one investment in the extractive sector, worth $150 million. At that time, the Minister of Economy, together with the DFC (U.S. International Development Finance Corporation—Ed.), presented it to American partners as the first project to which these funds would be partially allocated. However, there has been no further public or detailed information regarding the implementation of this agreement.

A dedicated portal is currently operational through which companies can submit projects for funding. This applies not only to the extraction of critical minerals but also to energy, transportation infrastructure, defense technologies, and other sectors identified as priorities for post-war economic recovery.

Then-Prime Minister Yulia Svyrydenko reported that in just the first month of operation, the investment portal received over 60 applications, 37 of which were submitted by Ukrainian companies. As of today, according to the fund, approximately 300 potential projects are at various stages of development.

It is noteworthy that the first of three startups selected for investment in March of this year was Sine Engineering, a company that develops solutions in the field of autonomous systems, communications, and navigation for unmanned platforms.

“URIF’s first investment, Sine Engineering, is a pure dual-use project (technologies that can be used for both civilian and defense purposes—ed.), and this is our answer to the question of priorities, because our priority is, first and foremost, a high-quality project. If strong dual-use proposals prevail, the portfolio will reflect that. The fund evaluates quality,” explains Yegor Perelygin, Deputy Minister of Economy, Environment, and Agriculture of Ukraine, who coordinates the URIF initiative.

Experts add that technology companies require significantly less capital investment, have a shorter investment cycle, and carry a lower level of risk compared to large-scale extraction projects. At the same time, this demonstrates that the subsoil use sector has not yet become the primary area for the practical application of the fund’s mechanisms.

Investments During the War

Critics argue that large-scale U.S. investments in the extraction of critical minerals have not yet gotten off the ground for a number of reasons. For example, Ukraine’s mineral resources have remained insufficiently prepared for the influx of large-scale capital for decades.

For an international investor, it is not enough to know that Ukraine has deposits of lithium, titanium, or graphite; they need a modern geological assessment, reserves confirmed according to international standards, a feasibility study, environmental documentation, a clear ownership structure, and a financial model for the future enterprise. There are still very few such comprehensively prepared projects on the Ukrainian market.

However, other experts argue that this particular issue is not critical.

“If an investor has data from the 1980s, that’s not the worst data one could have. Yes, it does need to be updated to determine what equipment to use, where to mine, and the best method for extraction. But this is unlikely to change the investment decision itself. It’s unlikely that investors will take reserve data from the 1980s, conduct new geological exploration, and then find that a project which, based on preliminary data, was successful and attractive, suddenly turns out to be unsuccessful and unattractive,” explains Landa.

According to him, in most cases, this will not yield any fundamentally new negative data. There may be refinements regarding geological formations, locations, and more detailed mapping of deposits.

“However, the presence or absence of war is precisely the factor that directly affects investment. Moreover, even if these assets are located in the relatively safest regions of Ukraine—for example, somewhere in Zakarpattia or Volyn—an investor in such a conservative industry will still consider the risks to be significant. Because we’re talking about 5, 7, 10 years or more,” says Landa.

Experts note that a full-scale war has significantly increased the risks for any investor. Building a new mine or a mining and processing plant involves investments of hundreds of millions of dollars with a payback period of ten to fifteen years. Such projects require operational predictability, personnel safety, access to energy and transportation infrastructure, the ability to insure against risks, and stable government policy. Therefore, as long as the war continues, each of these factors significantly complicates the process of making investment decisions.

According to Volodymyr Landa, the main advantage of the agreement is that it proved to be mutually beneficial for both parties. The expert explains: if one of the parties did not see an economic benefit for itself, it would have found legal or practical mechanisms to effectively avoid fulfilling the agreement.

“A balanced agreement is an achievement. If one party feels it is not benefiting, it will find legal mechanisms to effectively avoid fulfilling it. Another issue is that, precisely because of its balance, the agreement is likely no longer as attractive to the American side, which initially greatly exaggerated the potential economic impact of this deal,” says the expert.

Landa points out that at the start of negotiations, extremely ambitious estimates of the value of Ukraine’s mineral resources were cited, but they did not correspond to the actual economic potential. According to him, even significant mineral reserves do not mean that they can be profitably monetized.

Therefore, the fund’s first year of operation has shown that the main criterion at present is not the industry but the quality and readiness of the projects. The first funds were allocated to a company in the dual-use sector, while the extractive industry has yet to receive any funding.

Therefore, according to analysts’ observations, in the coming years the fund will most likely invest specifically in the most well-prepared strategic projects, and the prospects for Ukraine’s mineral resources will depend on whether Ukraine can develop competitive deposits, establish transparent rules and predictable conditions for investors, and, of course, whether the war will end.