The financial benefit from the agreement between Ukraine and the USA regarding the extraction of minerals is likely to become possible only in 10 years or more. This is reported by Reuters. It is noted that investors will face certain challenges during the implementation of this agreement.
This is reported by Business • Media
The development of strategically important minerals in countries with a developed mining sector, such as Canada and Australia, takes between 10 to 20 years. In contrast, most deposits in Ukraine remain underexplored.
Before the full-scale invasion by Russia, Ukraine was not in a hurry to issue new extraction licenses. From 2012 to 2020, about 20 licenses for oil and gas extraction were issued, 1 license for graphite, 1 for gold, 2 for manganese, and 1 for copper. In total, there are 3,482 active licenses in Ukraine. Of these, 7 out of 24 potential mining projects concern territories occupied by Russia, including the extraction of lithium, graphite, rare earth minerals, nickel, and manganese.
Legislative Initiatives on Extraction
The Ukrainian government has already submitted a draft law to parliament titled “On Amendments to the Budget Code Regarding the Implementation of the Agreement between Ukraine and the USA on the Creation of a Reconstruction Investment Fund.” This draft law provides for a mechanism for transferring revenues from the use of natural resources to a special fund of the state budget of Ukraine for further allocation to the reconstruction investment fund.
The sources of such revenues are expected to include: 50% of the fees for new special permits for subsoil use; 50% of the funds from the sale of new special permits; 50% of the revenues from the sale of a portion of the state-owned production; and other sources. Funds from the investment fund are planned to be directed towards infrastructure restoration projects related to post-war reconstruction.