Ukraine passes Budget Code changes to implement US mineral deal

Ukraine's parliament approved key amendments to the Budget Code on June 4 to implement the landmark minerals agreement with the United States, lawmaker Yaroslav Zhelezniak announced.

The legislation, supported by 309 members of parliament, enshrines financial provisions critical to executing the U.S.-Ukraine deal signed on April 30 and ratified by Kyiv on May 8.

The agreement grants the U.S. special access to strategic mineral development projects in Ukraine, including lithium, titanium, and rare earth elements vital to defense, aerospace, and green energy industries.

The approved changes require Ukraine to contribute 50% of revenues from several sources to the fund. These include rent payments for mineral extraction from new licenses, fees from new subsoil use permits, and proceeds from state production shares under new production-sharing agreements.  

The funds will be collected in a dedicated budget account and transferred to the Reconstruction Investment Fund at the discretion of the fund's chief administrator. The fund will be co-managed by Ukraine and the U.S. under an equal partnership model.

Washington will be represented by the U.S. International Development Finance Corporation (DFC), while Kyiv will be represented by Ukraine's Public-Private Partnerships Agency.

The agreement marks a new phase in U.S.-Ukraine economic cooperation and has been months in the making. Protracted negotiations led to the removal of controversial provisions that Ukrainian officials feared could allow for exploitation of Ukraine's natural resources.

Prime Minister Denys Shmyhal said in April that future U.S. military aid could be counted as contributions to the fund, though previously allocated assistance will not apply.