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On September 22, the Mining Day took place\u2014an exclusive industry event organized by the European Business Association, bringing together key market players, government representatives, international partners, and industry experts for a discussion on the state and prospects of the industry. Topics included the progress of reform, the impact of military actions, and the necessary steps for ensuring the continued sustainable development of subsoil usage in Ukraine. Below are the main theses and conclusions from our conversation.<\/p>\n
\u00abThe reform of the subsoil usage sector is creating all the prerequisites for the industry to develop in line with the best European practices, offering investors attractive working conditions and market access, and providing effective public oversight. The reform is already yielding its initial results: this year, 31 special permits were sold at electronic auctions, generating 1.8 billion UAH in revenue for the state budget. This marks a 74% increase compared to the previous year and a 21% increase compared to 2021. Subsoil usage must be sustainable and strike a balance between economic interests and environmental protection. Our strategic goals include European integration and Ukraine’s inclusion in the EU’s raw materials strategy, according to Ruslan Strielets<\/strong>, the Minister of Environmental Protection and Natural Resources of Ukraine.<\/p>\n To establish transparent market rules based on EU principles, the industry reform will continue with a focus on digitalization, deregulation, modernization, and transparency. Companies can already submit documents through the online portal with just one click, registries are gradually transitioning to online platforms, 15 databases have been consolidated, an online map of mineral resources has been created, and plans include digitizing 60,000 geological reports. Thanks to deregulation, the time required to start extraction has been reduced threefold, duplicative approvals and permits have been abolished, their circulation has been liberalized, and the timeline for environmental impact assessment procedures has been reduced from over 240 days to 73 days. The permit process is now predictable and comprehensible, land allocation issues have been addressed, and project approval procedures have been streamlined\u00bb.<\/p>\n Oleh Bondarenko<\/strong>, Chairman of the Verkhovna Rada Committee on Environmental Policy and Nature Management, noted: \u00abThanks to fruitful cooperation between the relevant Verkhovna Rada Committee, the Ministry of Environmental Protection, the Ukrainian Geological Survey, experts, and businesses, today we can discuss not only the consequences of the war but also the initial results of the reform. The implemented changes have allowed the industry to persevere and continue its development. The fact that companies are investing in mineral extraction is an indicator of the success of these changes. However, the reform has only just begun, and in the near future, we need to address its weaknesses, including identifying which issues require additional legislative regulation and which necessitate proper compliance with the law by all parties involved. Therefore, in the coming months, the relevant parliamentary committee will assess the implementation of Law No. 2805-IX and examine practical cases of legislative shortcomings.<\/p>\n In addition to improving legislation in the field of subsoil usage, the parliamentarians’ top priority remains the implementation of European directives. We have made significant progress towards transparency, simplification, and clarity of business conduct rules, emphasizing responsible subsoil usage, taking into account the crucial aspect of environmental protection in this activity. At the same time, there are ongoing issues related to managing waste in the extractive industry, investment conditions for the development of strategic mineral resources, and access to land plots for subsoil users\u00bb.<\/p>\n The head of the Ukrainian Geological Survey, Roman Opimakh<\/strong>, asserts that the work of the Ukrainian Geological Survey as a service institution is currently focused on digitalization, modernizing legislation, and ensuring effective control over subsoil use. In the context of digitalization, there are several operational services that have already proven their efficiency, including electronic auctions, the State Geological Portal nadra.gov.ua, and the electronic subsoil user’s cabinet. For instance, the State Geological Portal currently contains information from 15 databases, including special permits, oil and gas wells, artesian wells, interactive maps of strategic and construction minerals, cadastral land division layers, administrative-territorial structure, and objects of nature reserves, and more. The subsoil user’s e-cabinet allows for reducing the number of rejections and expediting the approval process. In the past six months, 630 applications were submitted, each of which is processed within an average of 5 days. . Looking ahead to 2023-24, the Ukrainian Geological Survey has the following priorities: expanding the list of e-services, digitizing geological information, preparing new proposals for subsoil areas with deposits of strategic raw materials and other valuable minerals. Additionally, a separate task is the country’s recovery and determining the damage caused by russia’s aggression\u00bb, – said Roman.<\/p>\n \u00abThe future of the economy should be \u2018greener\u2019 and more sustainable, but a stable supply of raw materials is needed in this process. The European Union and Ukraine are strategic partners on raw materials, and Ukraine has all the necessary skills and resources to be a key player in the mining field. The EU is supporting Ukranian businesses in these difficult times by eliminating all remaining duties and by opening its trade routes to Ukrainian products. In the future, the mining sector will play an important role in the EU’s Ukraine facility, and will provide a great contribution to the reconstruction and recovery of the country and its economy\u00bb, – said Nikola Sibona, <\/b>Trade Manager at the EU Delegation to Ukraine.<\/strong><\/p>\n During industry panels, experts also discussed various aspects, opportunities, and challenges of the subsoil use market in Ukraine. For example, during the discussion panel “Investments in natural resources: prospects and opportunities,” the speakers, including Andri<\/strong>i <\/strong>Gorokhov<\/strong>, CEO of umgi, Mykola Shevchenko<\/strong>, umgi Deputy CIO, Den<\/strong>ys Al<\/strong>osh<\/strong>yn<\/strong>, Chief Strategy Officer ULM, Dmytro Kashchuk,<\/strong> CBDO of Geological Investment Group, Serg<\/strong>ii Vo<\/strong>itsekhovsk<\/strong>yi<\/strong>, Member of the BGV Group Management Board, Michel F<\/strong>oucar<\/strong>t<\/strong>, Associate Partner at McKinsey & Company, Oleg Prokhorenko<\/strong>, Associate Partner and Delivery Director at McKinsey & Company, and V<\/strong>olodym<\/strong>yr Lavrenchuk<\/strong>, Regional Director at NEQSOL Holding Ukraine, highlighted that Ukraine’s advantages in the field of subsoil use include access to geological information, transparent auctions, and low costs of land, electricity, and taxes compared to other countries. These factors make Ukraine an attractive destination for the mining industry and related sectors. The development of subsoil use can contribute to diversifying Ukraine’s industrial base, reducing dependence on traditional industries, and creating new economic opportunities.<\/p>\n The global demand for materials, especially in the context of the “green” economy and digitalization, opens up favorable opportunities for Ukraine to export its resources and products to international markets. Ukraine has the potential to become a key player in the supply of strategic materials, such as graphite, which is in high demand in industries like battery production. These opportunities highlight Ukraine’s potential as a significant player in the global subsoil market. However, realizing these opportunities requires coordinated efforts from the government, industry stakeholders, and investors to overcome challenges, implement strategic policies, and engage in sustainable and rational resource development.<\/p>\n Challenges and possible solutions in the field of subsoil use were discussed during the third panel discussion. Valent<\/strong>yn Kharlov<\/strong>, Director of Government Relations and Public Relations at Avellana Gold, Yuli<\/strong>ia Zubets<\/strong>, Development Director of KRYVYIRIGCEMENT, Cenk Gultekin<\/strong>, Country manager of Esan Eczacibasi in Ukraine, Yegor Perelygin,<\/strong> Member of Management Board of UMCC Titanium, Oleksandr Tolkach<\/strong>, Director of the Granite Quarry LLC and BGV Group Management, and Iryna Suprun<\/strong>, Founder and CEO of Geological Investment Group, highlighted the absence of a common national strategy in the field of subsoil use. Without a clear roadmap, it is challenging to attract investments and effectively coordinate efforts. Acquiring land plots for mineral extraction is also a problem. Lengthy processes and bureaucracy in obtaining land rights delay projects and increase costs.<\/p>\n In addition, the speakers highlighted the lack of access to essential project information, the presence of only one maritime sales channel, a shortage of labor in Ukraine’s mining industry, and resource depletion. Certain materials can be limited, making long-term planning and sustainable resource management extremely important. Structural imbalances in production and logistics costs were noted. Addressing these imbalances and optimizing supply chains is crucial for competitiveness in the global market.<\/p>\n The European Business Association, particularly the Subsoil Use Committee, expresses gratitude to all participants in this extremely important discussion for their participation and professional discourse. To representatives of government agencies, we extend thanks for implementing reform, bringing about positive changes, and digitizing the industry even during times of war. We would like to extend our special thanks to our partners for supporting the event – Geological Investment Group, NEQSOL Holding Ukraine, umgi, UkrLithiumMining LLC, BGV Group Management – and to our information partner, NADRA Info.<\/p>\n Event Partners<\/strong><\/p>\n![\"\"](\"https:\/\/eba.com.ua\/wp-content\/uploads\/2023\/08\/Geological_Investment_Group_ENG-300x97.jpg\")
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