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Ukraine Business Roundup — US, Ukraine agree on minerals deal

The following is the Feb. 25, 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.

After weeks of back-and-forth, during which U.S. President Donald Trump lobbed insults at Ukrainian President Volodymyr Zelenksy, as well as public outcry over leaked details on the deal, Kyiv and Washington have reportedly agreed to a deal on Ukraine’s mineral resources, the Financial Times and Ukrainian media outlet Ekonomichna Pravda reported late on Feb. 25 after obtaining access to the deal.

Ukrainian officials told the FT that Kyiv is ready to move forward with a deal to develop Ukraine’s mineral resources — including oil and gas — after the U.S. agreed to drop a demand for $500 billion in rights in potential revenue from developing the resources.

The deal does not, however, contain any security guarantees for Ukraine — a not-so-minor detail that was reportedly the reason why Zelensky refused to sign the first couple of versions of the agreement.

The officials say the terms of the agreement are more favorable than the original versions of the deal, and according to the FT, see the deal as an important way to deepen their country’s relationship with the U.S.

Here’s what’s reportedly in the final version of the deal: The agreement will establish a fund to which Ukraine will contribute 50% of proceeds from the "future monetization" of state-owned mineral resources, including oil, gas, and related logistics. The fund will invest in projects within Ukraine.

Interestingly, the deal excludes resources that already contribute to Ukraine's state budget, meaning it will not cover operations by Naftogaz and Ukrnafta, the country's largest oil and gas producers. This piece right here caused a lot of alarm when it became known to the public that a deal could possibly include the state-owned oil and gas giants.

The updated agreement also removed a provision that would have given the United States 100% control over the fund.

The joint ownership of Ukraine and the U.S. over the fund will be calculated according to the countries' actual contributions to it, according to EP.

What’s next: The agreement still has to be signed by U.S. Secretary of State Marco Rubio and Ukrainian Foreign Minister Andriy Sybiha. Ukraine’s parliament will also have to ratify the deal. Specific details of the agreement will still have to be finalized in future negotiations.

Speaking of details, in an op-ed published yesterday, titled “Trump’s Ukraine rare earths deal: 'The art of the steal’,” Edward C. Chow, non-resident senior associate at the Center for Strategic and International Studies, points out that “the devil is in the details when assessing how such a deal might work.”

Firstly, Chow writes, the U.S. doesn’t directly invest in mining projects, especially overseas. If the U.S. envisions the American private sector extracting Ukrainian resources, those investments can take five to 10 years to even secure financing.

“It is difficult to estimate how long this would take in a war-torn country whose territorial integrity is under attack,” he writes.

Will those who left ever return?

The number of refugees who are planning to return to Ukraine after fleeing abroad due to Russia’s full-scale invasion continues to decline, according to a new report by the Kyiv-based Center for Economic Strategy.

For the first time, the share of refugees planning to come home fell to below half of respondents in a poll conducted by the think tank.

“Many who previously expressed a definite or likely intention to return have now reconsidered, shifting towards staying abroad,” CES wrote in its report.

According to CES, the key factors discouraging refugees from returning are ongoing security risks and uncertainty, destroyed housing, low living standards, and challenges in finding employment in Ukraine.

If the war does end this year as both President Volodymyr Zelensky and President Donald Trump have said is the goal, attracting Ukrainians back to the country will be crucial to getting Ukraine’s economy on stable footing.

Walkie-talkie revolution

One Ukrainian startup has rebuilt the humble walkie-talkie to weather the waves of modern electronic war with Russia. With thousands of Ukrainian soldiers already using their handheld comms devices, NATO is tuning in, reporter Kollen Post writes in his latest.

Himera, the walkie-talkie startup in question, is about to get a new layer of encryption that founder Misha Rudominsky says will guard their devices against the impending arrival of quantum computing on the battlefield — a technological threat that is rattling wartime communications experts worldwide.

More immediately, $1.2 million in fundraising, active EU manufacturing, U.S. Air Force testing, and a distribution deal with a Canadian firm are putting Himera on the threshold of selling to NATO and the U.S. Defense Department itself.

Himera is one of Ukraine’s first startups born in response to Russia’s 2022 invasion to get a shot with the broader world’s biggest armies.

Read the full profile here.

What else is happening

Europe announces tranche of aid as the U.S. pulls back

Ukraine will receive a new tranche of 3.5 billion euros ($3.7 billion) from the European Union in March, European Commission President Ursula von der Leyen announced on Feb. 24 at the international Support Ukraine summit in Kyiv. In 2025, the EU is expected to provide Ukraine with 35 billion euros ($36 billion) in financial assistance under the G7 Extraordinary Revenue Acceleration (ERA) credit initiative and the Ukraine Facility program. "Thanks to our Ukraine Facility and the G7 loan, we have closed Ukraine's budgetary gap for the entire year 2025," she stressed. Meanwhile, the EU paid more for Russian fossil fuel imports than it gave to Ukraine in financial aid last year.

Ukraine will need even more help from partners for at least a decade

The cost of reconstruction and recovery in Ukraine after three years of Russia's full-scale invasion will be $524 billion over the next decade, the U.N. said on Feb. 25, citing data from Ukraine's government, the World Bank, the European Commission, and the U.N. The required reconstruction costs are 2.8 times higher than Ukraine's nominal GDP for 2024. Direct losses in Ukraine reached $176 billion at the end of December 2024 compared to $152 billion in February last year.

First Ukraine-born business joins global entrepreneur network

Educational technology company Headway became the first Ukraine-born business selected to join Endeavor, a global network of entrepreneurs. The membership gives Headway access to Endeavor's network of 2,800 entrepreneurs and potential funding through Endeavor Catalyst, the organization's investment fund that can invest up to $2 million in member companies. "This is a powerful signal for Ukrainian startups: Our companies are visible to the whole world and have a great chance of entering global markets," said Digital Transformation Minister Mykhailo Fedorov, noting that Endeavor's network includes companies like Glovo, Amazon, and Netflix.

Ukraine moves to nationalize oligarch-owned mining company

Ukraine's State Bureau of Investigation and Justice Ministry are preparing to nationalize Poltava Mining, a subsidiary of London-listed Ferrexpo, which is majority-owned by oligarch Konstantin Zhevago, the SBI announced on Feb. 20. The lawsuit seeks to transfer 49.5% of Poltava Mining and its assets to state ownership, including 541 properties, 172 land plots, and over 2,300 railway cars with tracks. Ukraine's National Security and Defense Council (NSDC) recently announced sanctions and criminal proceedings against a number of Ukrainian businessmen and former high-ranking officials, including Zhevago.