Ukraine revamps minerals sector

UKRAINE is overhauling its minerals sector, which has been pounded by three years of war, in the hope of unlocking potential and attracting billions of dollars of investment from a minerals deal with the US, its ecology minister said.

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The country has deposits of 22 of 34 minerals deemed as critical by the EU for industries such as defence, high-tech appliances and green energy, as well as ferro alloy, precious and non-ferrous metals used in construction, and some rare earth elements.

However, much of the sector is underdeveloped, weighed down by Soviet-era bureaucracy and lack of investment.

After months of fraught negotiations, Kyiv and the US agreed a minerals deal in April that was heavily promoted by US President Donald Trump. It created a fund, which became active on May 23, that will receive money from new mining licences in Ukraine and invest in minerals projects.

Ecology Minister Svitlana Hrynchuk said in an interview that Ukraine hoped the fund would significantly increase the mineral industry's potential, noting extraction was a capital-intensive and long-term task.

"Currently, our natural resources sector's share of gross domestic product is 4%, but the potential is much greater," she said this week, without giving projections.