Ukraine says mineral deal not final; summary shows US demands more income

KYIV/WASHINGTON (Reuters) -The terms of a mineral deal between Ukraine and the U.S. have not yet been finalised, a senior Ukrainian official said on Friday, after a summary of Washington's latest offer showed it demanding all of Ukraine's natural resources income for years.

The latest U.S. proposal would require Kyiv to send Washington all profit from a fund controlling Ukrainian resources until Ukraine had repaid all American wartime aid, plus interest, according to the summary, reviewed by Reuters.

Mykhailo Podolyak, a senior official in President Volodymyr Zelenskiy's office, told Reuters there was no finalised draft for now and that discussions around it continued.

"Consultations are still happening at the level of the various ministries," he said, declining to elaborate further.

The Trump administration, which has reoriented Washington's policy towards endorsing Russia's narrative about the three-year-old war in Ukraine, has been pressing Kyiv for weeks to sign a deal giving Washington a stake in Ukraine's resources.

Zelenskiy has repeatedly said he accepts the idea, although he would not sign an agreement that would impoverish his country for decades. On Thursday, he said Washington was constantly changing the terms of the proposal, but that he did not want the U.S. to think he was opposed in principle.

Three people familiar with the ongoing negotiations said Washington had revised its proposals. The latest draft gives Ukraine no future security guarantees and requires it to contribute to a joint investment fund all income from the use of natural resources managed by state and private enterprises across Ukrainian territory.

According to the summary, it stipulates that Washington is given first rights to purchase resources extracted under the agreement, and recoup all the money it has given Ukraine since 2022, plus interest at a 4% annual rate, before Ukraine begins to gain access to the fund's profits.

The joint investment fund would be managed by the U.S. International Development Finance Corporation and have a board of five people, three appointed by the U.S. and two by Ukraine. Funds generated would be converted into foreign currency and transferred abroad.

The updated proposal was first reported by the Financial Times.

An earlier version of the deal, which Ukraine agreed to in principle before Zelenskiy visited the White House last month, had terms that appear to have been more favourable to Ukraine. It proposed a joint investment fund with Ukraine contributing 50% of proceeds from future profits of the extraction of state-owned natural resources.

Zelenskiy's visit on February 28 ended with Trump berating the Ukrainian leader in the Oval Office in front of world media, followed by several days during which Washington suspended all intelligence support and military aid to Ukraine.

Since then, Zelenskiy has trod carefully, repeatedly thanking the United States for support and seeking not to anger the White House.

Earlier this month Ukraine agreed to a U.S. proposal for a 30-day ceasefire, even though this was rejected by Russia, which began a full-scale invasion of Ukraine in February 2022.

Last week, Ukraine and Russia both agreed to pause attacks on energy infrastructure and at sea, but Moscow demanded that international sanctions be eased before it accepted the maritime truce, and Washington said it would help seek sanctions relief.

Treasury Secretary Scott Bessent has been spearheading negotiations on the mineral deal. In an interview with Fox News earlier this week, he said the U.S. had "passed along a completed document for the economic partnership" and Washington hoped to "perhaps even get signatures next week."

Trump has said a minerals deal will help secure a peace agreement by giving the United States a financial stake in Ukraine's future.

He also sees it as America's way of earning back some of the tens of billions of dollars it has given to Ukraine in financial and military aid since Russia invaded. Most of the aid funds were spent in the United States.

The proposal summary makes no mention of the U.S. taking ownership of Ukraine's nuclear power plants, another proposal Trump had discussed.

PUTIN SAYS KYIV GOVERNMENT SHOULD BE REPLACED BY

National Security Council spokesperson James Hewitt declined to confirm the terms of the latest proposal, but said the deal would strengthen the relationship between the U.S. and Ukraine.

"The mineral deal offers Ukraine the opportunity to form an enduring economic relationship with the United States that is the basis for long term security and peace," said Hewitt.

After years during which the U.S. firmly backed Ukraine in resisting Russia's invasion, Trump says Washington is neutral and just wants to end the war. He and his officials say they believe Russian President Vladimir Putin wants to make peace.

But so far Moscow has not stepped back from its maximalist demands, which include that Ukraine be disarmed and rendered neutral, and that it withdraw from all territory that Moscow has claimed since its invasion.

In his latest demand, Putin said on Thursday that Ukraine's government should be replaced by a temporary administration that would end the war and hold elections. He praised Trump, and said Russia was prepared for peace but winning on the battlefield.

"In my opinion, the newly elected president of the United States sincerely wants an end to the conflict for a number of reasons," Russian news agencies quoted Putin as telling sailors on a visit to a port.

Russia is in favour of "peaceful solutions to any conflict, including this one, through peaceful means, but not at our expense", Putin said. "Throughout the entire line of military contact, our troops are holding the strategic initiative."

A White House National Security Council spokesperson, asked about Putin's remarks on a temporary administration for Ukraine, said governance in Ukraine was determined by its constitution.

(Reporting by Pavel Polityuk in Kyiv and Gram Slattery, Erin Bano and Andrea Shalal in Washington; writing by Peter Graff; editing by Mark Heinrich)