Ukraine is embarking on a significant overhaul of its minerals sector, aiming to attract substantial investment from a recent deal with the US, reported Reuters, citing sources.
The country, which has been affected by three years of military conflict, holds deposits of 22 of the 34 minerals considered critical by the EU.
These minerals are essential for various industries including defence, high-tech appliances and green energy.
The overhaul is a response to the sector’s underdevelopment resulting from outdated bureaucracy and a lack of investment.
After prolonged negotiations, Ukraine and the US reached an agreement in April, endorsed by US President Donald Trump. This deal established a fund, operational since 23 May, to channel proceeds from new mining licences in Ukraine into mineral projects.
Ukraine’s Ecology Minister, Svitlana Hrynchuk, expressed the country’s aspirations for the fund to significantly enhance the mineral industry’s potential, acknowledging that mineral extraction is a capital-intensive and prolonged endeavour.
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By GlobalDataThe initiative is also part of Ukraine’s broader strategy to align with the EU, which it aims to join by 2030.
Hrynchuk detailed ongoing collaborations with the European Commission and the European Bank for Reconstruction and Development to digitise a substantial portion of Soviet-era geological data, with approximately 40% of the work completed.
Additionally, the government is reviewing around 3,000 mining licences, with an estimate that 10% may be inactive.
The minister emphasised the government’s intention to revitalise dormant assets that are valuable to the state.
The licence review process is expected to be completed within the next two years. Despite wartime obstacles, the government has continued to auction mining licences, raising Hrv2.4bn ($57.72m) from 120 licences last year and awarding 32 licences this year, predominantly for construction materials.
Domestic investors have shown the most interest, particularly in oil, gas and minerals like titanium, graphite and manganese.
The US minerals deal, which Treasury Secretary Scott Bessent described as a full economic partnership, grants the US preferential access to Ukrainian mineral agreements and supports the country’s reconstruction efforts.
Although the final documents for the joint investment fund were only recently exchanged, Ukrainian officials anticipate that projects will take time to develop.
