EBA highlights contentious issues in the audit of strategic minerals

10/ 04/ 2026

On 28 January 2026, the Cabinet of Ministers of Ukraine adopted Resolution No. 121, expanding the powers of state supervisory (control) authorities to conduct inspections. Following this, the State Service of Geology and Subsoil Resources of Ukraine launched an audit of “dormant” and problematic special subsoil use permits. In particular, unscheduled inspections were initiated for 38 valid permits issued for the exploration and development of strategic and critical minerals, as well as oil and gas-bearing subsoil. Member companies of the Subsoil Use Committee of the European Business Association support the need to enhance the effectiveness of state control in the sector. At the same time, they draw attention to a number of issues that have arisen during the inspections. In particular, based on inspection results, state geological control authorities have been recording in their reports alleged non-fulfilment of works stipulated in the Work Programmes — annexes to subsoil use agreements, which form an integral part of special permits. At the same time, the Subsoil Code of Ukraine explicitly provides for the automatic extension of: the validity periods of special permits that were in force at the time martial law was introduced, or those that expired during its application; the deadlines for the completion of works defined in subsoil use agreements — for the duration of martial law and for three months following its termination. According to the Association’s experts, this provision means there are no legal grounds to consider the deadlines for completing works as having been violated, since they are subject to automatic extension. Subsoil users emphasise the need for clear and consistent application of legislation during the audit of strategic minerals. Formalistic or ambiguous interpretation of legal provisions may lead to companies being labelled as “non-compliant”, creating significant risks for business. Such a status negatively affects companies’ business reputation, complicates cooperation with financial institutions and partners, and effectively blocks the attraction of international investment. At a time when the development of the strategic and critical minerals sector requires substantial capital inflows, such regulatory approaches may undermine the industry’s investment attractiveness. The Association’s experts also note that the automatic extension of deadlines was introduced precisely in view of the real challenges of martial law — including security risks, constant shelling, labour shortages, and logistical constraints. Hostilities directly affect the ability to carry out operations regardless of the location of deposits. The European Business Association remains open to constructive dialogue with public authorities and stands ready to provide expert support in developing balanced solutions and addressing problematic issues in the subsoil use sector.

Member companies of the Subsoil Use Committee of the European Business Association support the need to enhance the effectiveness of state control in the sector. At the same time, they draw attention to a number of issues that have arisen during the inspections.

In particular, based on inspection results, state geological control authorities have been recording in their reports alleged non-fulfilment of works stipulated in the Work Programmes — annexes to subsoil use agreements, which form an integral part of special permits.

At the same time, the Subsoil Code of Ukraine explicitly provides for the automatic extension of:

the validity periods of special permits that were in force at the time martial law was introduced, or those that expired during its application;
the deadlines for the completion of works defined in subsoil use agreements — for the duration of martial law and for three months following its termination.

According to the Association’s experts, this provision means there are no legal grounds to consider the deadlines for completing works as having been violated, since they are subject to automatic extension.

Subsoil users emphasise the need for clear and consistent application of legislation during the audit of strategic minerals. Formalistic or ambiguous interpretation of legal provisions may lead to companies being labelled as “non-compliant”, creating significant risks for business.

Such a status negatively affects companies’ business reputation, complicates cooperation with financial institutions and partners, and effectively blocks the attraction of international investment. At a time when the development of the strategic and critical minerals sector requires substantial capital inflows, such regulatory approaches may undermine the industry’s investment attractiveness.

The Association’s experts also note that the automatic extension of deadlines was introduced precisely in view of the real challenges of martial law — including security risks, constant shelling, labour shortages, and logistical constraints. Hostilities directly affect the ability to carry out operations regardless of the location of deposits.

The European Business Association remains open to constructive dialogue with public authorities and stands ready to provide expert support in developing balanced solutions and addressing problematic issues in the subsoil use sector.