I’ll Give You the Sticks. You Give Me the Stones. 🤝

The Sunday Essay ☕️

May 04, 2025

The United States just struck a deal with Ukraine that, on the surface, looks like another effort to support the war-torn country. But beneath the political headlines, speeches about freedom, and talk of peace, this is something far simpler:

It’s trade. Weapons for minerals.

President Trump has said for years that giving money to Ukraine is a bad deal for the U.S. He thinks it’s wasteful and unfair. Meanwhile, Ukraine’s President Zelensky is desperate for military support to keep fighting the war against Russia.

Last week, U.S. Treasury Secretary Scott Bessent announced a shiny new agreement called the U.S.-Ukraine Reconstruction Investment Fund. It’s being sold as a building block for peace.

So what is this fund, and why does it matter?

At the top level, it's pitched as a 50/50 investment partnership to rebuild Ukraine’s economy—mainly around mining, energy, and infrastructure. That includes things like natural resource deposits, natural gas terminals, ports, and the roads and power systems that support them.

As per the public accord, the agreement aims to:

Lay the foundation for long-term peace
Deepen economic cooperation between the United States and Ukraine
Attract global investors to rebuild Ukraine’s energy and tech sectors

Sounds noble. But it’s also the blueprint for a much bigger playbook. Let’s break it down.

A 50/50 Deal—On Paper

In the agreement, Article 6, “Contributions to the Partnership”, outlines who puts money into the fund and how.

Both countries—Ukraine and the U.S.—agree to put in equal amounts of capital. Sounds fair, right? Like splitting the dinner bill.

But how they each pay their half is where the game begins.

Ukraine’s side of the deal: Instead of writing a check, Ukraine agrees to hand over 50% of the revenue from government-owned natural resource projects. That means half of all profits from oil, gas, lithium, titanium, and other valuable minerals must go into this fund for as long as the agreement lasts.

The U.S. side of the deal: Instead of putting in cash, the United States can pay its half by sending weapons, defence tech, and military supplies. Whatever the US sends to the frontline, Ukraine must match in hard dollars to the fund - no more, no less.

So what’s really happening here? Every time Ukraine asks for more weapons, it’s agreeing to hand over more mineral revenue in return. Military aid becomes a loan, paid back in rocks and oil.

Ukraine’s Resource Potential (and Why It Was Wasted)

Ukraine is believed to have vast reserves of natural resources, especially rare earth elements, which are critical for making everything from smartphones to fighter jets. Right now, China controls about 90% of the world’s supply.

That gives China enormous power. If Ukraine has even a fraction of what they claim—Kyiv says 5% of the global supply—that could be a game-changer.

Now, let’s be real: that 5% number is probably comically overhyped. But even if it’s 0.5%, it still matters.

Historically, foreign companies have tried to take advantage of this opportunity.

Shell and Chevron both signed massive energy deals with Ukraine in 2013—each worth around $10 billion. But by 2015, both had walked away.

Why?

Because doing business in Ukraine was like trying to build a factory in quicksand. The corruption was so deep, and the red tape so thick, that nothing moved forward.

As a consequence, Ukraine's mineral reserves are largely untapped.

The Money Maze (And Why That’s a Problem)

This history of corruption is important because, according to the agreement, Ukraine's resource profits won't go directly into the fund. Instead, they're going to take a bit of a winding path.

Here is how it will go:

The government will collect money from mining or energy projects.
The cash will then be transferred to a special account in the state budget.
From the state budget, it will be handed off to a domestic partner company.
The partner company will then deposit the money into the fund.

The agreement claims this process will be “clear and traceable.”

To me, it sounds like the setup for a shell game.

Let me tell you a quick story.

I was a bartender in my early twenties. At the end of each night, I’d count my sales, pocket my tips, and pass the sales cash to my supervisor. The supervisor gave the sales cash to the night manager. The night manager locked it in the safe. The day manager picked it up the next morning and took it to the bank.

Without fail, by the time my money hit the bank, it always came up short - the cash deposited was less than my sales number. And guess who got blamed? Me.

I quickly realized that everybody in that chain was skimming some money off the top. The day manager was skimming from the night manager, the night manager was skimming from the supervisor, and the supervisor was skimming from me. I had to decide whether I wanted to play the game and skim some for myself, or get taken for the fool.

I experimented with both, but eventually just quit, just like Shell and Chevron did.

The point? The more hands money passes through, the more likely it is to disappear. The same risk applies here.

The Golden Clause of the Agreement: First Dibs on Everything

However, once the money lands in the fund (or what's left of it), it’s co-owned by the U.S. and Ukraine. And here’s where the U.S. secured something very valuable.

According to Article 7, “Investment Opportunity Rights”, the fund gets first rights to invest in any new Ukrainian natural resource or infrastructure project.

This means that if a Ukrainian natural resource or infrastructure project is raising capital, it must first show the offer to the US fund.

First dibs on every new investment opportunity.

That kind of access is what elite investors fight for. In mining, it’s how billionaires like John Paulson or Thomas Kaplan built their empires. They got in early, when things were cheap, and exited after everyone else piled in.

It does not mean they will invest in every deal they see, but they are first in line to say yes or no.

The U.S. has contracted that privilege for every mine, oil field, or energy project in Ukraine.

Military Aid Becomes an Investment

And that’s what makes this deal so clever: because the U.S. can send weapons instead of money, and Ukraine has to match it in mineral revenue, every weapon sent becomes part of an investment portfolio.

So instead of just “giving” weapons to Ukraine, the U.S. is effectively buying ownership in Ukrainian industries with military hardware.

That’s not aid. That’s equity.

Now look - I am not here to debate the ethics, and this is not an endorsement of anything partisan. I am here to analyze the mechanics of the deal. The same as I would any transaction between two parties.

But if the above deal is advantageous, the next point was a masterstroke.

Article 8: Buying First, Blocking Others

Article 8 outlines “Offtake Rights”—this means that if Ukraine starts producing minerals, like lithium, oil, or uranium, a U.S.-chosen corporation gets the first right to buy them, and at the lowest available price.

Even more: if the US declines to purchase the minerals, they hold the authority to block the sale to anyone they deem undesirable.

So if another country comes knocking—China, for example—offering a better deal, Ukraine can’t say yes unless America gives the green light.

That’s control.

If Ukraine’s mineral reserves turn out to be as valuable as some hope, then this agreement gives the U.S. secure, locked-in access as if those minerals were sitting in Nevada, not Kyiv.

What’s in It for Ukraine?

This deal gives the U.S. big financial interests in Ukraine. And when you own something valuable, you protect it.

That’s how Ukraine hopes to get the defence guarantees it wants. If the U.S. co-owns the pipeline, the mine, and the refinery, then it has a reason to keep Ukraine safe.

But this isn’t a blank check. If Ukraine doesn’t produce the minerals? No minerals means no funding. No funding means no weapons. No weapons means no security.

That’s the real leverage.

Some might argue this creates a twisted incentive—that it’s actually in America’s interest to keep the war going, because the longer Ukraine needs weapons, the more minerals the U.S. gets in return.

But I think it’s the opposite. You can’t mine under missile fire. You can’t build refineries in a war zone. Peace makes the minerals flow, not war.

Even after the shooting stops, Ukraine will need weapons to defend itself. With no guarantee of American protection, their only ticket to safety will be to produce and sell more minerals.

The Bigger Picture: This Isn’t Just About Ukraine

This deal may be making headlines because of the war, but zoom out.

The U.S. isn’t just helping Ukraine. It’s creating a blueprint.

I would not be surprised if every country that benefits from the US military, especially resource-rich nations, will see a version of this deal coming their way.

Aid, in exchange for access. Weapons, in exchange for minerals.

Let’s not pretend. The United States has the biggest military and economy in the world. But real power—the kind that lasts—comes from controlling resources.

Right now, China holds a very strong hand. With 90% of the global rare earth supply, they have leverage over the entire world. If the U.S. wants to break that grip, it needs alternative sources.

That means locking down friendly governments with untapped mineral wealth, like Ukraine.

Because under the surface, it’s never been about politics or speeches. It’s never really been about democracy or peace.

It’s always been about control.

Resources are the game board. Everything else is just the packaging.

The supply and demand of natural resources will define the next era.

If you're curious how to build an investment portfolio in this sector, check out The Commodity University, where you'll find a catalogue of courses delivered by some of the best mining investors in the business.

Everything from the most basic terms and concepts to risk management and portfolio building.

If you're curious about gold, silver, copper, nickel, uranium, rare earths or more, you can't afford to miss The Commodity University. Hit the link below and enroll today.

👉 Click here to lock in your spot at The Commodity University.

That is all for today.

Have an epic Sunday,

Jay

If you appreciate my writing, please share it with someone!