The prospect of implementing the Agreement on Mineral Resources with the US may be attractive for Ukrainian greenfield companies that already have special permits for deposits of minerals critical to the EU or the US, according to NADRA.info founder Volodymyr Boiko.
Among such companies, the expert named, in particular, the investment group BGV Group Management headed by Hennadiy Butkevych, as well as companies owned by Vitaliy Yakimenko and Oleksandr Nastenko.
“But at the same time, for some mineral extraction investors, such as Ferrexpo and Black Iron, the agreement will be a real test of strength. After all, against the backdrop of preparations for international agreements, officials have already announced another hunt for ‘dormant’ licenses,” Boiko commented on the situation to the Interfax-Ukraine news agency.
In his opinion, the redistribution of subsoil use rights is a very likely reality in the near future.
“We can only hope that the auditors will act wisely and not allow projects to be scrapped whose implementation has been delayed by objective circumstances beyond the control (or desire or intentions – IF-U) of subsoil users,” said the founder of NADRA.info.
He also believes that the agreement with the US could lead to a thorough audit of the previous activities of companies in the extractive industry.
“It can also be assumed that the agreement will trigger the start of an audit not only of ‘dormant’ special permits in private hands, but also a thorough public audit of all state-owned companies and enterprises in the extractive industry for each special permit, PSA or PSA (production sharing agreement, joint activity agreement – IF-U), for each well drilled or leased, for each management decision,” added Boiko.
As reported, Ukraine and the US signed a framework agreement on economic partnership on April 30. It was signed by First Deputy Prime Minister and Minister of Economy Yulia Svyrydenko and US Secretary of the Treasury Scott Bessent. It provides for the creation of a US-Ukraine recovery investment fund.
Ukrainian Prime Minister Denys Shmyhal expressed hope that the Verkhovna Rada would ratify the signed agreement by May 8. The “technical” agreements have not yet been signed or published.
In April, the National Security and Defense Council of Ukraine (NSDC) imposed economic restrictions (sanctions) on Pervomaiskyi Specialized Quarry, which holds a special permit No. 4310 for the extraction of granite from the Sofiyivske deposit in Mykolaiv region. NADRA.INFO reports.
The sanctions were imposed for a period of 10 years and include, among other things, the revocation or suspension of special permits for the use of subsoil. The decision of the National Security and Defense Council was put into effect by the Decree of the President of Ukraine Volodymyr Zelenskyy No. 219/1014 of 04.04.2024 (source). The sanctions were also imposed on SPMK-17 LLC, which owns 91.87% of Pervomaisky Specialized Quarry ALC (YouControl).
– The area of the Sofiyivske field is 39.2 hectares. Reserves (cat. A+B+C1) are more than 27 million cubic meters of granite (according to the Public Audit of Subsoil Use as of the fall of 2021).
NADRA.INFO wrote that in April 2021, the National Security and Defense Council imposed sanctions on Pervomaiskyi Specialized Quarry ALC for a period of three years. After that, the State Service of Geology and Subsoil of Ukraine suspended the special permit. Following this year’s decision on sanctions, the State Service of Geology and Subsoil updated the grounds for the suspension (download the order, annex).
– Pervomaiskyi Specialized Quarry ALC was founded in July 1995. The authorized capital is UAH 2 million. Registered in the village of. Migiya, Pervomaiskyi district, Mykolaiv region. The ultimate beneficial owner: Amirkhanyan Seda. Director: Volodymyr Baida.
As a reminder, in 2023-2024. The State Service of Geology and Subsoil of Ukraine suspended a number of mining and prospecting special permits for the use of subsoil to Ukrainian companies on the grounds that the business owners had previously been sanctioned by the National Security and Defense Council. For an overview of the consequences, please follow the link.
The European Business Association proposes to revise the sanctions policy in the field of subsoil use.
