In April 2025, after months of contentious stop-start negotiations, the US and Ukraine signed an anticipated Mineral Resources Agreement which could provide US investors with preferential access to Ukraine’s vast mineral reserves, as well as oil, gas and other hydrocarbons after the war. While lacking substantive detail, the agreement offers potential strategic benefits for both countries: while the US pursues options to diversify its critical minerals supply, Ukraine secures a pathway for US assistance and investment. But, for investors weighing the opportunity, much remains uncertain. Even if fighting ceases, a combination of continued security concerns, major operational challenges, and political uncertainty could result in higher risks, and several years before companies see returns on their investments.

A deal without a deterrence

Although the agreement adopts stronger rhetoric around the US’ commitment to supporting Ukraine against Russia’s “full scale invasion,” the lack of formal US security guarantees suggests it may have little direct bearing on the conflict, with the US administration remaining largely averse to putting boots on the ground. While the agreement does signal the US may be (informally) willing to discuss further military assistance – with US President Donald Trump reportedly approving the first export of USD 50 million in US military equipment to Ukraine shortly after the deal’s signing – without guarantees, even this assistance is not assured.

Meanwhile, there has been little indication that the deal has deterred Russia, which continues ground offensives in eastern Ukraine and airstrikes on major cities including Kyiv. With Russia maintaining demands for a peace agreement that Ukraine cannot accept – such as the recognition of occupied territories and Ukrainian demilitarisation – the status quo shows little sign of shifting.

Too early for optimism?

While the agreement seems a tantalising opportunity for the US minerals sector, it hinges on several uncertainties, from sustained political will among US and Ukrainian officials, to securing a lasting ceasefire. But, even if these conditions are met, other challenges persist. Amid continued uncertainty around whether Ukraine will remain stable enough to support large-scale mineral ventures, investors would benefit from monitoring the trajectory of certain developments:

• Geopolitical and security challenges: Many mineral-rich areas are located in eastern Ukraine, either close to or within Russian-occupied territory. With Russia’s strategic objectives unlikely to change significantly under President Putin, a peace agreement will not necessarily facilitate or ensure a stable operating environment. Although mining sites will likely have a substantial security presence, there is still potential for Russia to attempt to expand territorial control, or disrupt Ukrainian and US economic interests by targeting such projects or the region’s infrastructure. The overhanging potential for resumed insecurity could present a persistent long-term threat to operators.
• Operational and regulatory risks: Much of Ukraine’s energy and transportation infrastructure has suffered heavy damage in the war. Challenges include an unstable power grid amid the loss of about 30 percent of its electricity generation, and significantly reduced capacity at ports, railways and other systems needed to transport minerals. Redevelopment will require substantial time, labour and funding, and it will likely be years before infrastructural capabilities are able to offset the risk of power and supply chain disruptions. Meanwhile, Ukraine’s mineral resource valuations are based on outdated geological surveys. Greenfields exploration is costly, and, without comprehensive and modern assessments showing the true scale of mineral reserves, their financial viability remains unclear.
  Modernising Ukraine’s mining sector requires strengthening capacity within relevant policy and regulatory frameworks, which were underdeveloped even before the war. Public institutions, meanwhile, suffer from endemic corruption and bureaucratic inefficiency, which could delay licensing, pose compliance challenges for operators, and hinder wider reconstruction efforts if funds and projects are mismanaged.

• Political and economic instability: Ukraine’s post-war political and economic climate is also likely to remain unsteady during and potentially after transitioning to a peacetime government. Economic recovery and reconstruction is estimated to require at least USD 524 billion over the next 10 years. And, since Ukraine’s contributions to the fund depend on future mineral resource revenues, the pace and scale of recovery largely rely on US funding and Ukraine’s willingness to take on new debt.
  Although elections are postponed indefinitely, there is potential for political jostling and associated unrest as key players – including Ukraine’s powerful oligarchs – try to position themselves advantageously for future elections or investment deals. Political uncertainty further obscures what the longer-term policy and regulatory landscape holds for the minerals sector and Ukraine’s investment climate – and whether incoming US or Ukrainian administrations will be as supportive of the agreement.