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27 May 2025, Kyiv – Ukraine is actively reforming its mining sector, which has suffered significant losses due to three years of war, in a bid to attract billions of dollars in investment through a new deal with the United States. Ukraine’s Minister of Ecology Svitlana Hrynchuk said this in an interview with Reuters published on reuters.com.
New deal and the industry’s potential
Ukraine has deposits of 22 of the 34 critical minerals identified by the European Union as key to defence, high-tech and green energy, as well as ferroalloys, precious and non-ferrous metals used in construction, and some rare earth elements. However, the industry remains underdeveloped due to Soviet-style bureaucracy and lack of investment.
In April 2025, after difficult negotiations, Ukraine and the United States signed an agreement on cooperation in the mining sector, which was actively promoted by US President Donald Trump. On 23 May, a joint fund was launched that will be financed by new mining licences in Ukraine and will invest in mineral projects. According to Hrynchuk, this fund should significantly unlock the potential of the industry, which currently accounts for only 4% of the country’s GDP, although its potential is much greater.
Losses due to the war
The war has caused huge losses to the sector. About half of Ukraine’s mineral resources and a fifth of its territory are under Russian occupation. Most coal deposits have been lost, as well as some deposits of lithium, manganese and other minerals. According to Hrynchuk, the losses reach 70 trillion hryvnias ($1.7 trillion) due to the occupation and fighting along the 1,000 km frontline.
Reforms and investments
Ukraine updated its extractive sector development strategy at the end of 2024. The government is now focusing on:
- Improved access to geological data: A project to digitise up to 80% of Soviet-era geological data is underway jointly with the European Commission and the EBRD, with 40% of the project completed.
- Review of licences: The government is analysing 3,000 existing production licences, of which about 10% may be inactive. This process will be completed in 2025-2026.
- Reducing bureaucracy: The authorities are working to reduce administrative barriers and create lists of critical and strategic minerals.
These reforms are part of a broader strategy of rapprochement with the EU, which Ukraine hopes to become a member of by 2030.
Auctions and investor interest
Despite the war, Ukraine continues to hold auctions for production licences. In 2024, UAH 2.4 billion was raised from the sale of 120 licences, and this year the government plans to raise a similar amount. So far, 32 licences have been issued, mainly for construction materials (clay, sand, marble, granite) and amber. Investors, mostly Ukrainian, are interested in oil, gas, titanium, graphite and manganese.
Agreement with the US: economic partnership
The agreement with the US, which US Treasury Secretary Scott Bessent called a full economic partnership, gives the US priority access to new deals in Ukraine’s extractive sector. It will also help finance the country’s post-war reconstruction. The final documents for the joint fund were signed last week, but the implementation of projects will take time.
Challenges and prospects
Despite the difficulties caused by the war and the tense negotiations between Ukrainian President Volodymyr Zelenskyy and Donald Trump in February 2025, the agreement opens up new opportunities for attracting foreign investment. Hrynchuk emphasised that the government does not intend to confiscate assets with potential, but seeks to bring back into circulation valuable fields that have not been developed for years.
Ukraine hopes that reforms and cooperation with the US will revive the extractive industry, make it more attractive to foreign investors and contribute to the country’s economic recovery.
Source: Reuters
