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Business requests initial prices for special permits based on market prices of commodity products

04/ 11/ 2024
  On October 17, 2024, the State Geological Service of Ukraine published approved prices for mining enterprise commodity units for Q4 2024 on its official website. Once again, these prices significantly exceed those of previous periods. Consequently, this has stalled any actions regarding certain permits for subsoil use that require payment (fees). For instance, the price of coal was UAH 4,246.30 per ton in Q1 2024, UAH 4,658.1 per ton in Q3, and now has risen to UAH 81,718.10 per ton in Q4. Prices for other minerals have increased by more than 26 times. The business community has previously highlighted the inadequacy of the current approach to setting unit prices for mining enterprise commodity products. Therefore, business representatives believe that a review of the methodology for setting the initial auction (electronic tender) sales price for a special permit for subsoil use, approved by CMU Resolution No. 1374, is necessary. The business sector insists that mineral prices should be based on actual sales prices for the corresponding mining enterprise commodity products from the most recent reporting period. This procedure would work similarly to the pricing model used for hydrocarbons. Following meetings and requests from the EBA, the Ministry of Environmental Protection and Natural Resources of Ukraine and the State Geological Service of Ukraine have developed a draft amendment to the methodology. Experts from the EBA’s Subsoil Use Committee express their gratitude to the government for considering the business communitys stance and support the proposed changes. The business sector hopes for a swift incorporation of these revised provisions into the methodology. EBA experts are confident that adopting these proposed changes will help unblock the sectors activities.

On October 17, 2024, the State Geological Service of Ukraine published approved prices for mining enterprise commodity units for Q4 2024 on its official website. Once again, these prices significantly exceed those of previous periods. Consequently, this has stalled any actions regarding certain permits for subsoil use that require payment (fees).

For instance, the price of coal was UAH 4,246.30 per ton in Q1 2024, UAH 4,658.1 per ton in Q3, and now has risen to UAH 81,718.10 per ton in Q4. Prices for other minerals have increased by more than 26 times.

The business community has previously highlighted the inadequacy of the current approach to setting unit prices for mining enterprise commodity products. Therefore, business representatives believe that a review of the methodology for setting the initial auction (electronic tender) sales price for a special permit for subsoil use, approved by CMU Resolution No. 1374, is necessary.

The business sector insists that mineral prices should be based on actual sales prices for the corresponding mining enterprise commodity products from the most recent reporting period. This procedure would work similarly to the pricing model used for hydrocarbons.

Following meetings and requests from the EBA, the Ministry of Environmental Protection and Natural Resources of Ukraine and the State Geological Service of Ukraine have developed a draft amendment to the methodology. Experts from the EBA’s Subsoil Use Committee express their gratitude to the government for considering the business community’s stance and support the proposed changes.

The business sector hopes for a swift incorporation of these revised provisions into the methodology. EBA experts are confident that adopting these proposed changes will help unblock the sector’s activities.

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