Canadian mining company Black Iron Inc. with assets in Ukraine intends to submit an updated proposal to the Cabinet of Ministers of Ukraine as part of an investment agreement on the Shymanivske iron ore project.
According to the company’s press release on Thursday, it has received a response from the Ministry of Economy under its investment support agreement, explaining that the legislation is now expiring and Black Iron will be required to update and resubmit the application.
“Black Iron understands that the Ukrainian government’s main focus is on the war. Unfortunately, those not directly involved in the war effort are not working in a more constructive and timely manner with investors, as Black Iron understands that to date no investment has been made with the signing of the agreement,” the statement reads.
The signing of investment agreements with Black Iron and other significant investors is important for improving the living standards of ordinary Ukrainians by supporting foreign direct investment needed to rebuild Ukraine and revitalize its war-torn economy.
In addition, it is emphasized that the constantly changing composition of ministers, coupled with the fact that it took more than two years to finalize the law on investment agreements, makes it difficult for companies to invest in Ukraine’s recovery. As such, it is imperative that Ukrainian government officials not directly involved in the fighting focus on actively working with engaged large investors, such as Black Iron, to develop practical solutions to rebuild the country.
“Black Iron’s management has been informed that the updated legislation on investment support agreements is under final review and should be published within the next few weeks. Upon publication of this law, Black Iron intends to update its Investment Agreement application and supporting documentation for resubmission, hoping to be more directly and timely involved in finalizing the Investment Agreement for submission to the Cabinet of Ministers of Ukraine for approval,” the company concludes.
As reported earlier, Black Iron Inc. continues to promote the Shymanivske iron ore project, having prioritized the conclusion of an investment agreement with the government of the country. The main issue is obtaining a land plot under the jurisdiction of the Ministry of Defense. Discussions with the ministry have led to an agreement on the preliminary amount of money that Black Iron will have to pay as compensation for obtaining this land plot for its use.
The company also announced that it is considering new potential projects.
In October 2010, Black Iron acquired a Cypriot subsidiary from the EastOne investment group of Ukrainian businessman Victor Pinchuk Geo-Alliance Ore East Limited along with its licenses for $13 million, then renamed it BKI Cyprus. The main assets are 99% in Shymanovske Steel and Zelenivske Steel (both in Dnipro).
In July 2013, after a number of problems with the project, Black Iron Inc. announced an agreement with the largest Ukrainian mining and metallurgical group Metinvest to develop its iron ore assets. Metinvest B.V. paid $20 million to Black Iron Inc. and acquired a 49% stake in BKI Cyprus. However, Metinvest later withdrew from the project.
The Shymanivske iron ore deposit is surrounded by five other operating mining companies, including ArcelorMittal’s iron ore complex. According to Black Iron, the existing infrastructure, including access to electricity, railways, and port facilities, will allow the project to be implemented quickly to the production stage.
According to a presentation from May 2021, the expected capital investment in the launch of the first stage is estimated at $452 million, and the second – $364 million. The project envisaged the construction of a factory for the production of premium iron ore with an iron content of more than 68% with a capacity of 4 million tons per year in the first stage and 8 million tons per year in the second.
