Mining in Ukraine 2025: Legal Overview

dburkovska
May 27, 2025
7 min read

Updated: Sep 16, 2025

1. Strategic Importance of the Mining Sector

Ukraine’s mining industry remains a cornerstone of its economy, contributing significantly to gross domestic product (GDP), export revenues, and regional development. The country’s substantial reserves of critical minerals — including lithium, titanium, and rare earth elements — position it as a strategic supplier in a global context increasingly focused on securing resilient and diversified raw material sources. In light of continued geopolitical disruptions, Ukraine’s mineral wealth is also central to the EU and broader transatlantic efforts to reduce dependence on high-risk jurisdictions.

Recently, Ukraine and the United States signed a landmark agreement establishing the United States–Ukraine Reconstruction Investment Fund. This fund aims to jointly develop Ukraine’s critical mineral resources and support the country's post-war reconstruction efforts. This cooperation — if further implemented — could play a pivotal role in attracting investment, modernizing extractive infrastructure, and integrating Ukraine into Western strategic supply chains.

2. Principal Mineral Resources

Ukraine is endowed with an extensive range of mineral resources. It ranks among the leading global producers of iron ore and manganese and possesses substantial reserves of coal, titanium (particularly ilmenite and rutile), uranium, graphite, kaolin, and emerging battery minerals such as lithium and rare earth elements. These resources are increasingly viewed as vital for the green energy transition and technological development.

3. Geographical Concentration of Mineral Resources and Reserves

Major reserves are concentrated in several key regions (oblasts):

Titanium, Zirconium: Zhytomyr, Kyiv, Vinnytsya, Cherkasy, Kirovohrad, Dnipropetrovsk, Zaporizhzhia, Donetsk, Kharkiv, Sumy, Kherson, Mykolaiv, Odesa;
Graphite: Khmelnytskyi, Kirovohrad, Odesa;
Iron ore: Kirovohrad, Dnipropetrovsk, Kherson, Poltava, Zaporizhzhia;
Lithium: Kirovohrad;
Manganese: Dnipropetrovsk, Zaporizhzhia;
Non-ferrous metals: Transcarpathia, Volyn, Zhytomyr, Kirovohrad, Mykolaiv, Dnipropetrovsk, Donetsk, Luhansk, Kharkiv;
Polymetallic: Transcarpathia, Odesa, Dnipropetrovsk, Donetsk;
Rare earths: Zhytomyr, Vinnytsya, Kirovohrad, Dnipropetrovsk, Donetsk, Zaporizhzhia;
Uranium: Mykolaiv, Kirovohrad, Dnipropetrovsk, Donetsk;
Coal: Donetsk, Luhansk, Dnipropetrovsk, Lutsk, Lviv;
Oil, gas: Lviv, Ivano-Frankivsk, Poltava, Chernihiv, Sumy, Kharkiv, Transcarpathia, Chernivtsi, Lutsk, Odesa, Crimea.

Significant prospective areas for lithium and rare earth metals are being assessed under Ukraine’s critical raw materials strategy.

LEGAL AND REGULATORY FRAMEWORK

4. Nature of the Legal System

Ukraine’s legal system is rooted in civil law traditions. Codified statutes and regulatory acts constitute the primary source of law, and judicial decisions, while persuasive, are not formally binding precedents.

5. Regulatory Authorities and Applicable Legislation

The mining sector is principally governed by the Subsoil Code of Ukraine and associated regulatory acts, including:

Law of Ukraine “On Production Sharing Agreements”;
Law “On Environmental Protection”;
Law “On Environmental Impact Assessment”;
Land Code of Ukraine;
Law “On Oil and Gas”;
Law “On the Licensing System in the Sphere of Economic Activity”;
Tax Code of Ukraine (for royalties and applicable taxes).

Key regulatory authorities include:

State Service for Geology and Mineral Resources (Derzhgeonadra) – responsible for subsoil licensing and geological data;
Ministry of Environmental Protection and Natural Resources – environmental policy development and implementation;
State Ecological Inspectorate – environmental oversight and enforcement;
Ministry of Energy – general policy development and implementation in the energy sector.

Ukraine has adopted a digital licensing regime and electronic auction system for granting subsoil permits.

6. Resource Classification and Reporting Standards

Ukraine currently utilizes three classification and reporting systems of mineral reserves and resources: (i) National Classification, which is based on UNFC-2009 (for public geological and economic expert assessment of mineral resources and reserves); (ii) CRIRSCO-aligned classification system (used for public reports with the purpose of listing on stock exchanges and attracting foreign investment); (iii) old soviet (State Reserve) classification (still used to maintain and report the state balance of mineral resources). Other international standards, such as PRMS, can also be used.

RIGHTS TO EXPLOITATION

7. Legal Nature of Mining Rights

All subsoil resources are constitutionally designated as state property. Access is granted through state-issued special permits (licenses), which confer rights to explore or extract minerals in specified areas. Such rights do not confer ownership of minerals until extraction, at which point title passes to the licensee upon severance.

8. Access to Geological Data

Under normal circumstances, Ukraine’s State Service of Geology and Mineral Resources (Derzhgeonadra) provides public access to geological information through its online portals. Under the law, geological information shall be freely accessible to the general public. License holders are required to pay for the use of detailed geological assessments and analytical data. An ongoing digitization initiative aims to consolidate Ukraine’s geological archives.

However, the imposition of martial law due to the ongoing conflict has led to increased restrictions on access to geological data. Security concerns have necessitated limitations on the availability of certain information, affecting both domestic and international stakeholders. These measures are temporary and subject to change as the security situation evolves.

9. Licensing Process and Preferential Rights

Exploration and production rights are granted via:

Electronic auctions (default mechanism);
Production Sharing Agreements (PSAs) – available for strategic/critical deposits. PSAs are awarded through a special public contest procedure;
Direct negotiations – limited to specific legal exceptions (e.g., for mineral deposits of local significance).

A license for geological exploration provides a preferential right to apply for a production license for the same area, provided the holder meets the legal requirements and adheres to the terms of the exploration phase.

10. Renewal and Transferability

Licenses are renewable subject to satisfactory performance and compliance with exploration or production obligations. Transfers are generally permitted; however, transfers of rights under PSAs are subject to approval by the Cabinet of Ministers of Ukraine. No transfer is possible to a person who is related to or controlled by an aggressor state, its residents, as well as to persons being under sanctions.

LAND RIGHTS AND STATE PARTICIPATION

11. Surface Access and Land Use

Mining rights are independent from surface rights. Operators must either negotiate leases directly with landowners or apply for land servitudes or expropriation under applicable laws. Land-use disputes may be resolved judicially or via administrative procedures, particularly where public interest arguments are invoked.

12. Government Participation and “Strategic” Deposits

While the government does not automatically take equity stakes in private mining ventures, it acts as a party to PSAs for certain strategic deposits, including uranium and critical raw materials.

13. Cancellation and Expropriation

Licenses may be revoked for material non-compliance, environmental violations, or national security considerations. Compensation is generally not provided unless explicitly agreed under an investment protection mechanism such as a PSA or a bilateral investment treaty.

TAXATION AND FINANCIAL TERMS

14. Royalty and Tax Obligations

License holders must pay royalties (rent), calculated as a percentage of the value of extracted minerals. Rates differ by mineral and are periodically adjusted. In addition, licensees are subject to standard corporate income tax (currently 18%), value added tax (VAT) (20%) and payroll taxes (18% – personal income tax, 5% – war tax, and 22% (standard rate) – social tax). Environmental and property taxes may also apply.

15. Stabilisation and Incentives

Stabilisation clauses are typically available within the framework of PSAs. Besides this, foreign investors may invoke protections (such as the “grandfather clause”) under bilateral investment treaties and national legislation to secure guarantees against adverse regulatory changes.

16. Transfer Taxes and Capital Gains

There is no separate capital gains tax on the transfer of subsoil rights, but such transactions may trigger general tax obligations. The sale of shares in mining companies is taxed under standard corporate or personal income tax rules.

INVESTMENT STRUCTURES AND FINANCING

17. Corporate Vehicles

Foreign and domestic investors typically operate through limited liability companies (TOVs) or joint-stock companies. Branches of foreign entities may not directly hold subsoil rights.

18. Financing Channels

Funding is sourced through private equity, commercial lending, multilateral institutions (e.g., the European Bank for Reconstruction and Development), and public capital markets. Project finance structures are increasingly used, particularly in lithium and titanium projects.

19. Collateralisation

Subsoil permits are currently not mortgageable assets under Ukrainian law. However, security interests may be taken over shares in project companies, equipment, land plots and other real property, and receivables.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) ISSUES

20. Environmental Regulation

Mining operations are subject to the Law “On Environmental Impact Assessment” and must obtain environmental impact assessment conclusions alongside subsoil licenses. The EIA process involves public consultation, submission of detailed environmental reports, and government review.

21. Closure and Rehabilitation

Licensees are required to prepare and implement mine closure and land reclamation plans. Financial security must be provided in the form of reserve accounts to cover remediation costs.

22. Waste and Tailings Management

Operators must comply with detailed regulations on waste classification, storage, dam safety, and periodic inspections. Compliance is overseen by the State Environmental Inspectorate and regional authorities.

EMPLOYMENT AND COMMUNITY RELATIONS

23. Labour and Occupational Safety

Mining companies must adhere to the Labour Code, Civil Defence Code, the Law “On Labour Safety” as well as applicable regulations on industrial and labour safety. The State Labour Service monitors compliance, while health and safety obligations include, in particular, regular inspections, labour safety trainings, protective equipment, and emergency preparedness.

24. Foreign Workers

Employment of foreign nationals is subject to work permits and immigration procedures. Exemptions can apply to citizens of certain countries if provided by international treaties of Ukraine with the respective countries.

25. Community Engagement and Indigenous Rights

Community consultations are mandatory within the EIA process. While Ukraine does not formally recognise indigenous land rights akin to those in other jurisdictions, local self-governments and civil society organizations have a significant influence on public perception and project acceptance.

ANTI-CORRUPTION, FOREIGN INVESTMENT, AND TREATIES

26. Anti-Corruption Framework

Ukraine has enacted robust anti-corruption laws, including liability for private sector bribery. Resource companies must adhere to the Law “On Preventing Corruption” and may be subject to criminal liability for corrupt practices.

27. Foreign Investment Controls

There are no formal restrictions on foreign ownership in the mining sector. However, residents (both individuals and legal entities) of an aggressor state as well as legal entities owned and/or controlled by an aggressor state or its residents may not carry out mining activities in Ukraine. Currently, Russia and Belarus qualify as aggressor states.

28. International Agreements

Ukraine is a party to:

The ICSID Convention;
The Energy Charter Treaty;
Over 70 bilateral investment treaties;
EITI since 2013, with annual reporting obligations for extractive industries.

MARKET OUTLOOK AND FUTURE TRENDS

29. Recent Developments

Key reforms in 2021–2025 introduced:

Mandatory electronic auctions for licensing;
Public access to geological data (restrictions may apply under martial law);
Streamlining of the EIA process.

30. Strategic Opportunities

Ukraine’s emerging critical raw materials strategy is central to its long-term economic recovery and international positioning. With global demand surging for minerals essential to clean energy, defence, and advanced manufacturing, Ukraine is actively seeking to establish itself as a reliable supplier of lithium, rare earth elements, and titanium to Western markets. This ambition — coupled with reconstruction needs and enhanced cooperation with partners such as the EU and the United States — is likely to drive a new wave of investment and regulatory reform in the country’s extractive sector over the coming decade.

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This publication should not be construed as legal advice or legal opinion on any facts or circumstances. If you have any questions or require specific advice on any matter discussed here, please contact one of the following or your usual NOBLES contact:

Alexander Weigelt (Partner), Oleksandr Aleksyeyenko (Partner), Denys Vergeles (Counsel).