$400 mln investment for implementing BGV graphite project: financial incentives and prospects for Ukraine’s global leadership in CRM

During the annual Mining Day conference, BGV Group Management discussed the current progress of its flagship project, BGV Graphite, the investment challenges facing the mining sector, and examples of financial incentives that could greatly benefit the industry's growth in the country. Specifically, Serhii Voitsekhovskyi, a member of BGV Group Management's board of directors, mentioned that the company is actively involved in its BGV Graphite project, aiming to establish Ukraine as a top supplier of spherical graphite for modern battery production in Europe and the USA.

So far, as part of the graphite project, Gennadii Butkevych's company has invested nearly $10 million into the PFS (Pre-Feasibility Study) and PEA (Preliminary Economic Assessment) stages. This includes expenses for a special permit, drilling, related activities, laboratory testing, operating costs, and the PFS report itself. The team aims to finish the feasibility stage by next year and start construction by the end of 2025.

Serhii Voitsekhovskyi pointed out that the competition in the extraction industry, specifically in critical raw materials (CRM), is between countries rather than individual companies. The global CRM market is highly competitive, so it is crucial for domestic investors to receive considerable support from the government, including financial incentives, streamlined regulations, and further effective efforts to promote Ukraine in sales markets.

According to the BGV Group Management team's calculations, the BGV Graphite project for graphite production and spheronisation will cost around 400 million dollars. This includes an investment of 120 million dollars in the design and construction of a mining processing plant and producing concentrate, and 250-280 million dollars for constructing a graphite spheronisation and high purified graphite production facility. With such significant project funding, this becomes a tale of collaboration with influential international financial institutions, funds, or major industry companies.

During the discussion, the BGV company also brought up the topic of preferential energy tariffs, which can serve as a helpful financial incentive in the initial stages of the project. "Electricity makes up over half of the production costs for spherical graphite [SpG – ed.]. BGV is constructing a facility that will produce 19,000 tons of SpG annually, requiring 180.6 million kW of electricity per year — roughly equivalent to a small city's annual usage. This means our company must establish and maintain an independent energy infrastructure for this hypothetical city, which is a significant investment of time and money for the investor," Serhii Voitsekhovskyi summed up.

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The European Business Association hosted a Mining Day event on October 21, which brought together top subsoil consumers, industry professionals, government officials, and global partners. BGV Group Management Investment Group was a partner for the event and participated in the panel discussion on "Financial incentives in subsoil exploitation: opportunities and challenges." The event attendees talked about the industry's present and future, specifically the upcoming implementations in subsoil utilization, incorporating artificial intelligence, forming partnerships with the EU, and recognizing the strategic significance of subsoil in Ukraine's Victory Plan. At the event, they also shared the findings of the survey "Utilization of subsoil during war and potential for growth." Of the surveyed subsoil consumers, 78% view the industry as promising for investment, and 71% persist in investing in Ukrainian subsoil despite the ongoing war.