TIERRA Y TECNOLOGÍA Nº 60 | DOI: https://dx.doi.org/10.21028/hl.2022.08.31 | Autora: Hanna Liventseva. Chairman of the Board of Ukrainian Association of Geologists.


This report is a short review of the regulatory and legislative environment in the geological and mining sector of Ukraine during the pre-war period and after the introduction of martial law.

It contains/includes information about potential investment opportunities in Ukrainian mining and geological exploration industry after the end of the war with Russia.

The purpose of this report is to help potential Spanish and European investors to understand Ukrainian legislative procedures in the field of subsoil use better.

The war undermined Ukrainian industry, led to the destruction of infrastructure and a sharp reduction in the population.

The GDP of Ukraine against the background of the war will decrease this year by approximately 45%.

The fall will depend on the duration and intensity of the war. Economic growth is expected to resume in 2023, but will be weak [1].

During martial law, the government significantly reduced the level of transparency of the extractive sector, changed the conditions of taxation and regulation in the field of subsoil use, related to the needs of defense and the order of martial law.

At the same time, Ukraine has already obtained the status of a candidate country for EU membership. Even though the announced simplified procedure, in order to acquire full membership, Ukraine has to go through the screening and synchronization of Ukrainian legislative and regulatory acts with EU legislation [2].

On February 24, 2022, as a result of an unprovoked and full-scale invasion of the Russian Federation, the President of Ukraine Volodymyr Zelenskyy introduced martial law on the territory of Ukraine by his decree №. 64/2022.

As a result, the government and the Verkhovna Rada adopted changes related to the functioning of the mining sector.

Purpose of the report:

  • Assess the possibilities of future investment of European investors in the geological and mining industries of Ukraine
  • Facilitate potential European investors better understand Ukrainian legislative procedures in the field of subsoil use


  • Short summary of the regulatory framework surrounding the mining industry of Ukraine
  • Characteristics of the main relevant laws in the industry
  • Short description the process for authorizing or obtaining a concession for mining activities
  • Environmental aspects
  • Financial features
UGSCross domestic products
EITIExtractive Industries Transparency Initiatives
PSAProduction Sharing Agreements
SGSSUState Geologic and Subsoil Survey of Ukraine, Ukrainian Geological Survey
CMUThe Cabinet of Ministers of Ukraine
EIAEnvironmental Impact Assessment
VATValue Added Tax


The main authorities involved in regulating the mining industry of Ukraine

  • The Cabinet of Ministers of Ukraine (CMU) approves procedures for certain aspects of mining activities, for example the rules for obtaining the special permit for subsoil use, the rules for storing and delivering the geological information, the rules for holding the electronic auctions.
  • The Ministry of Energy of Ukraine sets and exercises state policies in the energy sector, including mining of coal and peat. 
  • The Ministry of Environmental Protection and Natural Resources of Ukraine sets and exercises state policies in environmental protection and sets state policies in geological exploration and rational use of subsoil. It also executes state control of environmental protection and rational use, renewal, and protection of natural resources.
  • (State Geologic and Subsoil Survey of Ukraine (SGSSU, the «Ukrainian Geological Survey») is responsible for matters directly connected with the subsoil use. The Ukrainian Geological Survey  maintains records of the subsoil areas in use and chooses the subsoil areas to be presented at the electronic auctions. It issues the special permits for subsoil use and controls whether the special permit holders comply with the subsoil laws. It is also authorized to suspend or terminate subsoil use rights in cases defined by the Subsoil Code.
  • The State Commission of Ukraine on Mineral Resources (the «Resources Commission») inspects and evaluates the reserves of natural resources discovered after geological exploration of subsoil areas and inspects the programmes for further development of subsoil areas.
  • The State Environmental Inspectorate of Ukraine monitors and controls compliance with the environmental laws and requirements of the special permits.
  • The State Agency for Water Resources control the use of the water resources.
  • The State Labour Service grants mining allotments that are required for commercial development of most subsoil areas where the resources have been already explored

Short summary of the regulatory framework surrounding the mining industry of Ukraine

The main rules and principles applicable to the mining industry are defined in the laws of Ukraine adopted by the Ukrainian Parliament.

The main laws in the industry are:

  • Subsoil Code of Ukraine (the «Subsoil Code») [3];
  • Mining Law of Ukraine (the «Mining Law»)[4, 5];
  • Law of Ukraine «On Mining and Processing of Uranium Ores» [6];
  • Law of Ukraine «On Production Sharing Agreements» [7];
  • Law of Ukraine «On State Regulation of Extraction, Production and Use of Precious Metals and Precious Stones and Control over Operations with Them» [8];
  • Law of Ukraine «On Ensuring Transparency in Extractive Industries» (the «EITI Law») [9];
  • Law of Ukraine «On Environmental Protection» [10];
  • Law of Ukraine «On Environmental Impact Assessment» [11];
  • Law of Ukraine «On State Support of Investment Projects with Significant Investments» [12]

The rates of rent for the subsoil use, which is a special tax imposed on mining activities, are set by the Tax Code of Ukraine (the «Tax Code») [13].

Certain procedures relevant to mining planning, execution and reporting are set by resolutions approved by the state executive authorities.

The main regulatory legal act regulating the issue of rational use of subsoil is Subsoil Code of Ukraine (the «Subsoil Code»); The Code defines the types of minerals, the competences of state authorities and local governments, the rules for providing and conditions for subsoil use, the rights and obligations of subsoil users, the conditions for using geological information, accounting. Besides, the Sobsoil Code determines the types of subsoil use that require obtaining special permits.

In order to obtain the right to carry out subsoil use activities according to the types defined by the Code (Table 1), the business entity (future subsoil user) has to obtain a special permission for subsoil use; in certain cases specified by law, make a contract about Production Sharing Agreements (further – PSA) with the issuance of such a special permit.

An integral part of a special permission is an agreement on the conditions of subsoil use, which provides the following special conditions:

  • requirements for work efficiency;
  • modern technologies of mineral extraction and processing;
  • the order of mineral extraction, especially with the aim of preventing negative environmental consequences and ensuring the safety of built-up areas;
  • types, volumes and terms of execution of works on the subsoil area;
  • grounds for termination of activities related to the use of the subsoil area.

Table 1: Types of subsoil use that require special permits

Type of subsoil useType of permit documentResponsible authority
geological study, including research and industrial development of mineral deposits of national importancespecial permit for subsoil useState Geologic and Subsoil Survey of Ukraine
production of mineralsspecial permit for subsoil useState Geologic and Subsoil Survey of Ukraine
construction and operation of underground facilities not related to the production of minerals, including the underground oil, gas and other substances storage facilities and materials, disposal of chemical and hazardous waste, waste water dischargespecial permit for subsoil useState Geologic and Subsoil Survey of Ukraine
creation of geological territories and objects of important scientific, cultural, sanitary and reserves, natural monuments, medical and health facilities, etc.)special permit for subsoil useState Geologic and Subsoil Survey of Ukraine
performance of work provided for in the PSAState Geological Survey (control over the implementation of SPA – the Ministry of Energy of UkraineState Geological Survey (control over the implementation of SPA – the Ministry of Energy of Ukraine
geological study of amber-bearing subsoils, including exploratory and industrial development of deposits with subsequent production of amber (industrial development of deposits)special permit for subsoil useState Geologic and Subsoil Survey of Ukraine

Table 2: Other permit procedures in subsoil use

a) Approval/agreement from local self-government bodies/local authorities and executive authorities, which are provided for when obtaining a special permit

The subsoil is the exclusive property of the Ukrainian people and is provided only for the use.

The Ukrainian people exercise the right to own the subsoil through the Verkhovna Rada of Ukraine, the Verkhovna Rada of the Autonomous Republic of Crimea and local councils.

Granting of special permits for subsoil use, except for the cases of subsoil use under the terms of production sharing agreements which are concluded in accordance with the Law of Ukraine «On Production Sharing Agreements», is carried out after prior agreement with the relevant regional, Kyiv and Sevastopol city councils – for the use of subsoil areas for the purpose of geological study, development of mineral deposits of national importance, as well as for purposes that are not related to mineral extraction; the appropriate regional, urban and village/rural councils – for the use of subsoil plots that are containing minerals of local importance.

Subsoil users could be enterprises, institutions, organizations, citizens of Ukraine, as well as foreigners and stateless people, foreign legal entities. Subsoil is provided for permanent or temporary use. The use of subsoil without a predetermined term is recognized as permanent. Temporary use of subsoil can be short-term (up to 5 years) and long-term (up to 50 years).

b) Definition of mining lease (not for all types of subsoil use)

In addition, it is mandatory to obtain a mining permit prior to implementation of works on the subsoil area. Permits are issued by the State Labor Service.

The procedure of granting a mining right-of-way is determined by the Mining Law and the Regulation on the procedure for granting mining rights-of-way, approved by Resolution No. 59 of the CMU of January 27, 1995.

A part of the subsoil is allocated to the mining concession for the industrial development of mineral deposits and purposes not related to the extraction of minerals. Users of oil and gas- and amber-bearing subsoils who have received a special permit for the use of subsoils do not need a mining right-of-way.

c) EIA conclusion (environmental impact assessment)

Environmental impact assessment (EIA) is a procedure that involves the preparation of an EIA report by a business entity, public discussions, analysis, and issuance of an EIA opinion by an authorized body regarding to the admissibility of economic activity. EIA is carried out before the start of economic activity and is aimed at determining the possible results of the activity on the environment. The EIA process is regulated by the Law «On Environmental Impact Assessment», according to which, among other things, conducting an EIA and obtaining a corresponding opinion is mandatory for the extraction and beneficiation of minerals, except for minerals of local importance. All actions and stages of the ATS procedure were carried out with the help of sequential placement of documents in the Unified ATS register.

d) Geological information

According to the Procedure for Disposing of Geological Information, approved by CMU Resolution No. 939 dated 07.11.2018, geological information created or purchased with state funds is a state property and may be provided for use by juridical person and natural person. According to the above-mentioned Procedure, the manager of geological information, that is state-owned, is the State Geological Survey.

e) Production of uranium ores

For geological study, exploration and industrial development of the deposit and extraction of uranium ores, a special permit for subsoil use must be obtained from the State Geodesy in accordance with the procedure, which is described above. According to the Law of Ukraine «On Extraction and Processing of Uranium Ores», special permits are granted in agreement with the Ministry of Health.

In order to mine and/or process uranium ores, it is necessary to obtain a license from the State Nuclear Regulatory Inspectorate (as the part of the Law of Ukraine «On Permitting Activities in the Field of Nuclear Energy Use»).

f) Сlaim of land

Title document for a land plot — a state deed for the right of permanent use or a land plot lease agreement (Land Code of Ukraine)

Production Sharing Agreements

A separate element of acquiring the right to use subsoil, as well as the involvement of foreign investors in the development of Ukrainian subsoil, are production sharing agreements.

Such agreements are characterized by a number of special, favorable conditions for the investor, state guarantees about the stability of legal norms and a long term of validity.

According to the Law «On Agreements on the Distribution of Production», SPA is an agreement in which the state entrusts the investor holding of the search, exploration and extraction of minerals in a specified area (areas) of the subsoil and the conduct of work, related to the agreement for a specified length of time. Accordingly, the investor undertakes to perform assigned work at his own expense and at his own risk, with the subsequent compensation of expenses and receiving a reward in the form of part of the profitable products.

Investors could be juridical person and natural person, who are registered in Ukraine and abroad.

PSAs can be concluded in bilateral and multilateral format.

In accordance with the above-mentioned Law, the state is represented by the government (CMU), which creates and approves the composition of a special Interdepartmental Commission, which includes representatives of state bodies, local self-government and people’s deputies of Ukraine.

The interdepartmental commission submits the terms of the competition to the CMU for approval and announces, organizes and conducts the competition.

The law also defines the list of essential conditions that must be included in the product distribution agreement.

The SPA can be concluded without holding a competition by decision of the CMU, if the subsoil area has minor deposits of minerals, if the subsoil user already has a special permit for the use of subsoil or several special permits.

Necessary documents for obtaining special permits by participating in the auction for foreign legal entities:

  • the name of the foreign juridical person, the registered representative office of the foreign juridical person (if it isavailable);
  • location of the legal entity;
  • the code of the registered representative office of a foreign legal entity in accordance with the National State Registry of Ukrainian Enterprises and Organizations (if it is available);
  • surname, first name, patronymic (if  available) of the representative of the legal entity, series (if available) and number of the document certifying his identity;
  • a statement in an arbitrary form about the non-imposition of special economic and other restrictive measures (sanctions) on the applicant – a foreign legal entity or its officials (a manager, his deputies and people replacing them) or its founders (legal entities and individuals) in accordance with the Law of Ukraine «On Sanctions» and acts adopted according to the said Law;
  • details of the document that confirm the authority of the representative of the legal entity;
  • e-mail address for sending messages of the electronic bidding system for the sale of permits and the organizer (operator);
  • contact phone number;
  • details of the applicant’s account, to which the guarantee fee must be returned.

After completing the registration procedure and submitting the application, the applicant pays the guarantee fee at any bank institution on the basis of the account created by the organizer (operator) in the applicant’s personal account or directly on the electronic platform using payment systems, if the functionality of the electronic platform provides such an opportunity [14].

The subsoil user has to comply with the terms of the special permit and the subsoil use agreement, which usually contains work programs, which the subsoil user has to adhere.

The standard form of subsoil use agreement also sets requirements for annual reporting to Ukrainian Geological Survey, general terms as to complying with the Ukrainian laws, etc.

Usually the subsoil use agreement requires the subsoil to commit to using locally manufactured equipment or materials unless the foreign ones are better in terms of price, quality, economic or environmental effect.

Depending on the location of the subsoil area, the subsoil use agreement may contain requirements as to using certain technologies while mining, adhering to additional rules and standards, financially contributing to the development of the local communities on the regions where the subsoil area is located.

These additional requirements are set by the executive authorities and local councils that grant their approval for putting the subsoil areas on the electronic auctions

The subsoil user also has to:

  • ensure that the environmental impact assessment is performed and adhered to the requirements of the environmental impact assessment decision;
  • formalize the title to the land plots where the actual exploration and production will take place;
  • submit reports on progress of exploration and the resources that are discovered in the subsoil area to the relevant state authorities;
  • submit to the Ministry of Energy the reports on payments made to the state authorities as demanded by the EITI Law;
  • explore the subsoil to the fullest extent possible under the requirements of the special permit and the subsoil use agreement;
  • to comply with the environmental, water and forest, people health and safety laws and standards applicable in Ukraine;
  • pay the rent for the subsoil use;
  • reclaim the land plots, which were altered in course of mining.


Short description the process for authorizing or obtaining a concession for mining activities

To obtain mining rights subsoil user has to obtain a special permit. The special permit defines the area of subsoil granted for use, the natural resource it applies to, the type of subsoil use and its duration. The special permit is accompanied by a subsoil use agreement signed between the subsoil user and the Ukrainian Geological Survey , which defines the programme for works, duties of the subsoil user to utilize modern technologies and protect environment, rights of the Ukrainian Geological Survey  to control and request information on subsoil use, etc.

The subsoil user may obtain a special permit for one of the following subsoil uses, and the maximum duration of the special permit differs depending on the subsoil use:

  • geological exploration of subsoil areas bearing natural resources of local significance – for up to three years;
  • geological exploration and pilot commercial development of subsoil areas bearing natural resources of nationwide significance or amber – for up to five years;
  • commercial development of natural resources – for up to 20 years;
  • any works under production sharing agreements – for up to 50 years, etc.

Most mineral resources are classified as mineral resources of nationwide significance; this includes metallic ores and non-metallic resources and waters. Some non-metallic resources, for instance sand, gypsum, limestone, chalk, etc. may be classified as those of local significance by the Resources Commission.

Usually, the special permit is obtained by winning an electronic auction.

There are exemptions allowing to obtain a special permit outside an electronic auction, for example:

  • for geological exploration and commercial production of natural resources of local significance;
  • if the applicant has financed and performed the geological exploration on that subsoil area – within three years upon approval of the discovered resources by the Resources Commission;
  • to expand the subsoil area for not more that 50% of the initial area, if the potential deposits partially go beyond the boundaries of that initial subsoil area, etc.

Obtaining a special permit for subsoil use

Select/choose a subsoil area with coordinates for use

In fact, the list of types of subsoil use is wider

(+ construction and operation of underground facilities not related to the production of minerals, including the underground oil, gas and other substances storage facilities and materials, disposal of chemical and hazardous waste, waste water discharge;

+ creation of geological territories and objects of important scientific, cultural, sanitary and health importance (scientific training grounds, geological reserves, nature reserves, natural monuments, medical and health facilities, etc.);

+ performance of work provided for in the production sharing agreement),

but in 90% of cases we are talking about extraction or geological study+production.

Choose the type of subsoil use:

The permit is granted for the period, specified by the applicant, but no longer than:

three years – for geological study of subsoil areas of local significance;

five years – for geological study of mineral deposits and geological study, including experimental and industrial development of mineral deposits of national significance, and geological study of amber-bearing subsoils, including experimental and industrial development of deposits with subsequent production of amber (industrial development deposits);

20 years – for the production of minerals Geological study is an additional step, but then you can use Clause 8 of Resolution 615 and get a permit to production minerals without holding an auction, «if the applicant, on the basis of a special permit for the use of subsoil, has carried out a geological study of the subsoil area at his own expense and calculated mineral reserves, which were approved in accordance with the established procedure, and submitted documents for obtaining a special permit for the extraction of minerals from the corresponding deposit no later than within three years after the approval of the reserves.»

The electronic auctions for subsoil rights

The mining rights are received by obtaining a special permit. Usually, the special permit is obtained by winning an electronic auction.

The electronic auctions for subsoil rights are initiated by the Ukrainian Geological Survey  or other entities on their behalf. The Ukrainian Geological Survey  decides on which subsoil areas shall be put up for the electronic auction. While deciding on the list, the Ukrainian Geological Survey as well accounts for the proposals of potential electronic auctions participants.

The scheme for obtaining a special permit through the mechanism of electronic auctions is as follows

Obtaining a Special Permit (License) through E-auction [15]

The electronic auctions are announced and held online. Each auction item contains information about the subsoil area and the natural resources there, starting price and auction step, amount of security deposit which is 20% of the starting price, value of the geological information and the price of preparation of the auction file, which shall be reimbursed by the winner.

Both Ukrainian and foreign companies may participate in the auctions. To participate, a participant has to register with the auctions system by submitting the application and information online.

The applicant has to submit the following:

  • company name and identification number;
  • name and ID details for the company’s representative and the documents by which the representative shall act;
  • contact details: e-mail address and telephone number;
  • details of the bank account, to which the security deposit shall be returned after the auction is finished; and
  • a statement claiming that the company, its shareholders or participants, its director or deputy directors are not sanctioned per the Law of Ukraine «On Sanctions».

If the applicant is a foreign company, it additionally submits its address or address of its representative office in Ukraine, if there is any.

After registration, the applicant may apply for the auction and pay the security deposit. The application is submitted for each lot separately by using the online form available in the system.

The electronic auction is held in 50 days after the call for applications was published. During the auctions, the participants rise their prices and the highest price wins. If there is no winner in the first two auctions for a certain subsoil area, it will be sold at a Dutch auction where the price will decrease until a participant agrees to it or until the price reaches its lowest limit.

After the auction is finished, the auction minutes are formed and published online on the next business day after the auction. The winner has to sign the minutes, apply to the Ukrainian Geological Survey for signing the sale-purchase agreement for the special permit and then apply for obtaining the special permit. On different stages of this process, the winner has to pay the winning price for the special permit reduced by the security deposit, pay for the geological information, the system’s services, and the price of preparation of the auction file. The whole process of obtaining the special permit, after the electronic auction is finished, may take up to four months.


Before starting most of the actual mining works, the subsoil user has to ensure that the environmental impact assessment is performed.

The special permit usually contains a duty of the subsoil user to obtain the environmental impact assessment decision before starting the mining.

After the environmental impact assessment decision is obtained, the necessary changes have to be introduced to the special permit.

To perform the environmental impact assessment, the subsoil user has to send a notice to the state administration in the relevant region of Ukraine.

It has to contain a detailed information about the project, including:

  • type of activity;
  • its location, geographical positions of the facilities;
  • environmental rules and limitations of the project;
  • necessary ecological and engineering preparation of the territory;
  • sources and types of potential impact on the environment;
  • what has to be included in the environmental impact assessment report;
  • the procedure of holding the environmental impact assessment and involving the public, etc.

The subsoil user has to receive the comments from the public and prepare the environmental impact assessment report, which is also subject of public discussion.

The report shall include, among other things:

  • a description of the project, including the works to be done
  • land plots to be involved
  • what processes, resources and technologies will be used;
  • description of waste, emissions, pollution of water, air or soil entailed by the project;
  • description of the current state of environment in the area and how it shall be altered in the course of the project;
  • sources and types of potential negative impact on the environment;
  • intended measures to preclude, limit or remedy the negative impact on the environment, including possible compensations;
  • programs for controlling and monitoring the negative impact on the environment during and, if necessary, after the project is finished;
  • a list of all comments from the public and whether they were included or rejected in the environmental impact assessment report, etc.

The environmental impact assessment decision is issued by the Ministry of Environmental Protection and Natural Resources of Ukraine based on the environmental impact assessment report.

While mining, the subsoil user has to adhere to the requirements of the environmental impact assessment decision.

In general, the subsoil users have to act using the methods that do not have negative effect on subsoil, pollute the environment or have adverse effect on people.

Otherwise, the special permit may be terminated.

The detailed rules as to environmental matters are defined in the technical regulations, rules, and standards applicable in Ukraine.

They include:

  • regulations regarding labor safety protection;
  • rules for emissions, including emissions in residential areas;
  • rules for waste handling;
  • rules for construction;
  • standards for reclaiming the land;
  • national standards of Ukraine regarding rational use of subsoil.

Signing IEA

Documents entered into the Register by an authorized central body or an authorized territorial body have to be affixed with an electronic digital signature of responsible employees of such body.

The use of electronic digital signatures by responsible persons is carried out in accordance with the Procedure for the use of electronic digital signatures by state authorities, local self-government bodies, enterprises, institutions and state-owned organizations, approved by Resolution No. 1452 of the Cabinet of Ministers of Ukraine dated October 28, 2004 (Official Gazette of Ukraine, 2004 r., No. 44, Article 2894).

Production of minerals in especially protected areas (nature reserve)

Depending on the type of a protected area, the mining in either prohibited or restricted or must be done with additional care. The basic types of protected areas are described in the Law of Ukraine «On Nature Reserve Fund of Ukraine». Each protected area is established by a separate regulation, which defines the rules of any activity in its territory, which shall be considered while planning the project and preparing the environmental impact assessment [16].


The subsoil use fee includes:

  • Payment for the special permit, which is the price, won at the electronic auction for that special permit.  If the special permit is obtained outside the auction or if the subsoil area is expanded, the fee for obtaining the special permit is calculated by the authorities.
  • Auction payments, which are the auction system’s service fee and payment of the price of preparation of the auction file.
  • Payment for the geological information to reimburse the state’s expenses for obtaining that geological information.
  • Rent for the subsoil use, which is a special tax imposed on mining activities as defined by the Tax Code. It is paid every three months, or each month in case of oil, natural and some other gases.

To calculate the taxable base, the subsoil user has to define the value of the natural resources mined in the reporting period, which is based on the larger of the following: the price at which the natural resource was sold minus the costs for packing and delivery to the buyer or the calculated price of the natural resource, which is calculated as a sum of expenses for mining and processing the natural resource.

The rent payment is then defined by multiplying the volume of the mined resources, their value, the rent rate, and a special coefficient depending on the type of natural resource and manner of its mining.

In case of production sharing agreements, the subsoil user also has to deliver a portion of the extracted materials to the state [17].


Geological mapping in Ukraine is carried out exclusively by the state.

Mapping reports always pass the scientific and editorial board of enterprises and must meet the requirements of the instructional documents.

Currently, Only the Ukrainian Geological Company carries out mapping [18-21].


In the next few time will be created and ordered a new Subsoil Code.

Among other positive changes, it is expected to introduce a procedure for transfer of mining rights, to expand the list of natural resources of local significance (thus making obtaining special permits for them easier) and set clear reporting and control procedures applicable to mining.

Technological auctions. Currently, the electronic auctions for obtaining the special permits are based on the price criterion only. It is expected that some of the future auctions with have other criteria, for instance utilizing modern technologies or environmentally friendly methods, which shall attract new industry players.

Lithium deposits. Given the increasing interest in energy storage technologies, we may expect growing interest to Ukraine’s lithium deposits, which are considerable but not actively developed now. This may apply to other rare metals deposits as well.

The top recent mining development(s) in this jurisdiction:

Electronic auctions. In 2018, Ukraine started holding pilot electronic actions for the special permits. In 2020, they became the standard way of obtaining the special permit. It allows the applicants to win the special permit in an open and transparent procedure and opens the opportunities for the foreign investors since the auctions are held online.

Investment atlas. In 2019, the Geology Service has introduced an online investment atlas, which contains information on all subsoil areas listed for auctions. The Geology Service has also introduced several online services allowing for a single-window communication with the Geology Service, access to geological information, etc.

Significant investments law. In late 2020, the Law of Ukraine «On State Support of Investment Projects with Significant Investments» was adopted. It allows an investor in any mining activity, except coal mining, to conclude an agreement with the government.

The investor’s duty under the agreement would be to invest at least EUR 20 million in the project, and the government’s duties would be to provide the land plots necessary for the project, ensure exemption from VAT and import duties for the imported goods, and in some cases exemption from corporate profit tax.

EITI. Starting from year 2017, Ukraine started preparing and publishing the Reports on Ensuring Transparency on Extractive Industries per the EITI Law.

This has made Ukraine’s mining industry more open for the investors, who are not yet present in the country.

Deepening of the cooperation with the EU regarding critical minerals immediately after the end of martial law is a necessary condition for ensuring the national security of Ukraine and its defense industry.

The decree  the President of Ukraine approved the list of metallic and non-metallic minerals, which have a strategic importance for the sustainable development of the economy and defense capability of the state.

The list includes 37 minerals, including such «critical» minerals as lithium, cesium, uranium ores, etc.

Now it is difficult to fully determine exactly what damage the war has caused to the mining industries.

Currently, there are various estimates of damaged mining and energy infrastructure throughout Ukraine. The total losses of the economy since the start of hostilities, according to the calculations of the Ministry of Economy as of May 11, 2022, were estimated at about 564–600 billion dollars.

At this stage, the CMU envisages:

  1. Restoration of the energy and mining infrastructure with the help of modern technologies and the creation of modern infrastructure facilities that are more energy efficient and resistant to security challenges;
  2. Encouragement of projects on the integration of Ukrainian energy infrastructure, in particular gas infrastructure, with EU infrastructure; creation of a specific plan to increase the exploration of reserves of «critical» minerals, as it will need to be implemented immediately after the end of hostilities. Critical raw materials are the basis for the military-industrial complex. It is the initial element of the value-added chain in the development of Renewable Energy Sources, the production of batteries and semiconductors, and other sectors of the innovative economy.
  3. Activation of cooperation with the EU within the framework of the signed Memorandum on strategic partnership in the raw materials industry;
  4. Strengthening the communication campaign to attract foreign investors to the mining sector. First of all, those, who have joined the sanctions, left or lost their business in the Russian Federation. Ukraine has sufficient deposits of uranium, titanium, lithium, beryllium and other «critical» minerals, and, accordingly, the potential take a share of the Russian Federation in the world market over time.

In recent days, the government of Ukraine has amended the by-laws regarding the procedure for granting special permits without an auction, by conducting electronic auctions, determining the initial sale price of the permit and the value of geological information:

  1. Increased efficiency of electronic auctions

In order to avoid the disruption of trades by unscrupulous participants, a minimum guaranteed contribution of 0.5 to 10 million UAH was introduced, depending on the minerals (of national / local value).

Automated determination of the amount of state compensation for geological exploration without concluding separate agreements.

The contract for the purchase and sale of permits will be signed with the help of the electronic digital signature.

Reduced time for lot allocation in the Prozoro system.

Sales from 50 to 20 days for all minerals, except for oil and gas plots (90 days).

Replaced the Dutch model of bidding with an English auction with discounts (25 and 50%) with a reduction in the time for holding repeated rounds of bidding from 30 to 15 days.

In addition, after six months, the right to develop a local mineral will also be granted exclusively through auctions.

2. Submission of applications by subsurface users will also be carried out in electronic form through the electronic office.

The order of its functioning is being adjusted.

During the period of martial law, the deadlines for submitting an application for the extension of the validity of the permit are considered to be extended for such period, plus three months after the termination or cancellation of the special legal regime.

Permits and terms, established by the relevant agreements on the conditions of subsoil use, are considered to have extended their validity automatically for this period and for six months after its termination / cancellation.

  1. An exhaustive list of reasons for changing the terms of the work program with a mandatory additional right to revise them for 18+ months for reasons caused by the war has been approved.
  2. The amount of the fee for granting a special permit and calculating the cost of geoinformation is automated. This will allow you to make the calculation remotely, speeding up the procedure by at least 20 days.
  3. The requirement to inform about the final beneficial owner of the special permit has been introduced. This should increase the transparency and accountability of the sphere of subsoil use to society, as well as prevent the participation of sanctioned people in the development of Ukrainian subsoil.

Useful links:

List of sources used:

  1. https://www.worldbank.org/en/news/press-release/2022/04/10/russian-invasion-to-shrink-ukraine-economy-by-45-percent-this-year
  2. https://dixigroup.org/wp-content/uploads/2022/06/tb.pdf 
  3. https://zakon.rada.gov.ua/laws/show/132/94-%D0%B2%D1%80#Text
  4. https://cms.law/en/media/local/cms-cmno/files/publications/publications/the-international-comparative-legal-guide-to-mining-law-2017
  5. https://zakon.rada.gov.ua/laws/show/1127-14#Text
  6.  https://zakon.rada.gov.ua/laws/show/645/97-%D0%B2%D1%80#Text
  7. https://zakon.rada.gov.ua/laws/show/1039-14#Text
  8. https://zakon.rada.gov.ua/laws/show/637/97-%D0%B2%D1%80#Text
  9. https://zakon.rada.gov.ua/laws/show/2545-19#Text
  10. https://zakon.rada.gov.ua/laws/show/1264-12#Text
  11. https://zakon.rada.gov.ua/laws/show/2059-19#Text
  12. https://zakon.rada.gov.ua/laws/show/1116-20#Text
  13. https://zakon.rada.gov.ua/laws/show/2755-17
  14. https://wiki.legalaid.gov.ua/index.php/%D0%9F%D0%BE%D1%80%D1%8F%D0%B4%D0%BE%D0%BA_%D0%BD%D0%B0%D0%B4%D0%B0%D0%BD%D0%BD%D1%8F_%D1%81%D0%BF%D0%B5%D1%86%D1%96%D0%B0%D0%BB%D1%8C%D0%BD%D0%B8%D1%85_%D0%B4%D0%BE%D0%B7%D0%B2%D0%BE%D0%BB%D1%96%D0%B2_%D0%BD%D0%B0_%D0%BA%D0%BE%D1%80%D0%B8%D1%81%D1%82%D1%83%D0%B2%D0%B0%D0%BD%D0%BD%D1%8F_%D0%BD%D0%B0%D0%B4%D1%80%D0%B0%D0%BC%D0%B8
  15. https://www.geo.gov.ua/wp-content/uploads/2021/05/license-procedure.pdf
  16. https://www.kmu.gov.ua/npas/2939927
  17. http://ppk.org.ua/uk/node/325
  18. https://zakon.rada.gov.ua/laws/show/z0008-99#Text
  19. https://ukrgeol.com/en/
  20. http://search.ligazakon.ua/l_doc2.nsf/link1/REG3301.html
  21. https://www.geo.gov.ua/geologichna-galuz/geologichni-karty/