Ukraine needs to update its legislation on critical minerals in order to exploit its existing resource potential and strengthen its competitiveness in the global market, participants in a thematic panel at the Ukraine Recovery Forum said. They stressed that without transparent rules of the game, specialized international partnerships, and a stable security environment, the implementation of large projects in the mining sector remains limited.
The panel was moderated by Vitaliy Radchenko, managing partner of CMS Ukraine and head of the energy and climate change practice. The discussion was joined by Volodymyr Tsabal, Secretary of the Verkhovna Rada Committee on Budget, Paul Coyier, Professor at the Institute of World Politics (USA), Ksenia Orynchak, Founder and Executive Director of the National Association of Extractive Industries of Ukraine, and Greg Swenson, Chairman of Republicans Overseas UK.
According to the speakers, Ukraine has significant reserves of critical raw materials, but the existing regulatory framework does not fully meet the requirements of international investors and specialized financial institutions. They emphasized the need for clear procedures for access to deposits, understandable risk-sharing mechanisms, and investment protection guarantees. “If Ukraine wants to occupy a prominent place in global supply chains for critical minerals, it needs modernized rules that are understandable to transnational companies and export credit agencies,” Tsabal said.
Separately, participants drew attention to China’s dominant role in the mineral processing segment, which poses significant risks to Western economies. In this context, the strategic partnership between Ukraine and the US, in their opinion, could become a tool for diversifying supply sources, as well as a channel for attracting capital and technology. “Cooperation with Ukraine makes it possible to reduce dependence on a limited number of suppliers and at the same time support the reconstruction of a country that is on the front line of the conflict,” Swenson emphasized.
At the same time, experts reminded that the implementation of projects in the extractive sector directly depends on the security situation. They noted that some of the territories rich in minerals are currently under Russian occupation, which complicates the planning and launch of new investment initiatives. According to the participants in the discussion, achieving lasting peace and creating a predictable security environment is a necessary condition for transforming Ukraine’s resource potential into real economic results.
The forum “Rebuilding Ukraine: Security, Opportunities, Investments” is being held on December 11-12 in Bucharest under the auspices of the Romanian Ministry of Foreign Affairs and the Ukrainian Ministry of Foreign Affairs and is organized by the New Strategy Center. According to the organizers, more than 30 panel discussions and parallel sessions are planned over two days with the participation of representatives of governments, international organizations, the private sector, financial institutions, and experts from Europe, North America, and Asia. The topics of the panels cover security and defense, infrastructure, financing and investment, green energy, digitalization, human capital, and cross-border cooperation.
Secretary of the National Security and Defense Council (NSDC) Oleksiy Danilov announced the determination of 137 types of raw materials, minerals, which will be under the special control of the Ukrainian state.
“Some 137 types of raw materials and minerals have been identified, which today will be under the special control of our government. These licenses will be issued more carefully by the government, because we see what is happening,” Danilov said at a briefing on the results NSDC meeting in Kyiv on Friday.
He said the companies have licenses for copper mining, but not a single kilogram of copper is mined in Ukraine.
“All this will be taken under control by this decision. In addition, certain processes will be strengthened, taking into account the fact that from January 1, 2021, children who were born should receive certain money after a certain period of time, when this system will work,” Danilov said.
Ukrainian metallurgical enterprises are expected to increase steel production by 4% by the end of the year compared to 2018, up to 21.895 million tonnes.
According to background documents of Economic Development and Trade Ministry available for Interfax-Ukraine, a total rolled steel output will see 3% rise by the end of 2019, up to 18.937 million tonnes, when pig iron will see 0.4% down, to 20.748 million tonnes.
Such forecast was made following the performance indicator of January-July 2019, the ministry said.
The agency’s source in the ministry also said that under ongoing trends scrap metals supplies to the enterprises would decrease by 3%, to 3.238 million tonnes.
Besides, pipe output in 2019 may grow by 19%, to 1.144 million tonnes, coke output will drop by 5%, to 10.305 million tonnes, metalware output will drop by 1%, to 186,000 tonnes.
Meanwhile, the metal and mining enterprise can increase iron ore extraction by 4%, to 76.095 million tonnes, iron ore concentrate output by 5%, to 63.568 million tonnes, ready iron ore raw materials may increase by 1%, to 53.696 million tonnes. Sinter cake output will remain on the level of previous year with 31.706 million tonnes, steel pellets output will increase by 3% reaching 21.989 million tonnes.
