Profits from the US minerals agreement expected in 10 years

The financial return on a Ukraine-US mining agreement is likely to be realized in 10 years or more.

It is noted that investors will face certain difficulties in its implementation. The development of strategically important minerals in countries with developed mining sectors, such as Canada and Australia, takes 10 to 20 years.

It should be understood that most fields in Ukraine have not been sufficiently explored. Ukraine had no plans to issue new production licenses before the full-scale invasion

Between 2012 and 2020, about 20 licenses were issued for oil and gas production, 1 for graphite, 1 for gold, 2 for manganese, and 1 for copper. In total, there are 3,482 valid licenses in Ukraine. And 7 out of 24 potential mining projects are located in the territories occupied by Russia. These include the extraction of lithium, graphite, rare earth minerals, nickel, and manganese.

The Government of Ukraine has already submitted to the Parliament a draft law “On Amendments to the Budget Code on the Implementation of the Agreement between Ukraine and the United States on the Establishment of an Investment Fund for Reconstruction”. It provides for the introduction of 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 investment fund for reconstruction. The sources of such revenues will be: 50% of the fee for new special permits for the use of subsoil; 50% of the proceeds from the sale of new special permits; 50% of the proceeds from the sale of some products owned by the state, etc. The money from the investment fund will be used for infrastructure restoration projects related to post-war reconstruction.

Recently, we wrote that the Ministry of Economy explained the essence of the agreement with the United States on minerals, so it is worth clarifying the details and learning more.