Mining Day dedicated to mineral extraction held in Kyiv

Ukraine needs a strategic vision for the development of the subsoil use industry. This was announced by business representatives who gathered at the first Mining Day discussion meeting organized by the European Business Association.

This was reported by Rubryka, whose reporter attended the event.

What is the problem?

Ukraine has sufficient reserves of minerals and a sufficient level of expertise, but its subsoil exploitation is not yet properly developed: it is not a player in the global industry market.

Also, there is no systemic vision of the state, and no policy for developing the subsoil use industry has been developed. This was noted by the participants of Mining Day.

In addition, the study conducted by the European Business Association among its members, 39 representatives of the subsoil extraction industry, showed that the regulatory environment in subsoil use is rated satisfactory by the majority of enterprises, namely 63% estimate it satisfactory, 11% — good, 26% consider it unsatisfactory. The reform of the subsoil use industry received a score of 6.26 from the entrepreneurs on a ten-point scale.

What is the solution?

Ukraine is implementing a reform of the subsoil extraction industry. In particular, in 2022, the profile law On Amendments to Certain Legislative Acts of Ukraine on Improving Legislation in the Field of Subsoil Use was adopted. The main directions of the reform are digitalization and deregulation.

At the same time, many points still need to be improved, and the authorities are ready for a constructive dialogue with business in these matters. This was noted by the participants of the discussion on the part of the state: the Minister of Environment Protection and Natural Resources of Ukraine, Roman Strilets and his deputy Yevhenii Fedorenko, the head of the specialized parliamentary committee Oleh Bondarenko, and the head of the State Geology and Subsoil Service of Ukraine Roman Opimakh.

How does it work?

As the EBA study showed, 74% of surveyed companies continue to invest in the Ukrainian subsoil during the war, 18% have not yet made an investment decision, and only 8% are currently not investing.

Figures from the state authorities are also encouraging. In particular, Roman Strilets informed that in 2023, businesses had already been granted 31 special permits for subsoil use, which brought the state ₴1.8 billion. This is 21% more than in 2021 and 74% more than last year, the first year of the war. That is, the reform has already worked. In particular, the event participants praised the launch of electronic auctions and the movement towards digitization of geological data.

At the same time, Dmytro Kashchuk, head of the subsoil use committee at the European Business Association, emphasized that the state should adopt a conscious policy on subsoil use with the definition of development priorities and ways to achieve them. This should be determined at the strategy level.

In the photo: Regional Director of NEQSOL Holding Ukraine, Volodymyr Lavrenchuk, Deputy Director of Investments of Umgi, Mykola Shevchenko, Member of the Board of Directors of BGV Group Management, Serhii Voitsekhovskyi, and Chairman of the Subsoil Use Committee at the European Business Association, Dmytro Kashchuk

Ukraine, as a state, should decide what place it wants to occupy in the world mineral market — a raw material appendage or a state with deep processing of raw materials, the discussion participants emphasized.

"It is necessary to understand that today the competition is not linear, but ecosystemic," noted Serhii Voitsekhovskyi, a member of the board of directors of BGV Group Management, talking about the Balakhivka Graphite Project.

It is necessary to attract foreign investors to the industry, and it will not be so much a competition as a joint raising of the level of Ukraine as a player in the world market. For investors, it is essential to have insurance against war risks, the rule of law, and the predictability of state decisions above all.

Another common idea of the participants of the discussion, voiced by Valentyn Kharlov, the director of relations with state authorities and international relations of Avellana Gold, is that there should be three equal players in decision-making regarding the development of subsoil use: the state, business and the public.

By the way, many similar ideas were expressed by the participants of the round table "Critical mineral raw materials in Ukraine — how to make it a magnet for investments, not corruption," about which Rubryka reported the other day.