Quartz sand for glass production

Ukraine has significant reserves of quartz sand and exports it.

For the production of ordinary glass, quartz sand of various qualities is used, enriched or not, and for the production of quartz glass - very pure, mainly enriched quartz sand.

The state balance of mineral reserves of Ukraine considering the Gusarivka quartz sand deposit, which has various areas of application - molding and abrasive sands, sands for the glass industry.

In the northwestern region of the Ukrainian Crystalline Shield, in the basin of the Teteriv River, the Bilokrynytske and Kodrynke deposits of alluvial and fluvioglacial quartz sands are known, and in the Dnieper-Donetsk depression - the Novoselivske and Berestovenkivske deposits.

With the development of the glass industry, the need for high-quality quartz sand is constantly increasing.

Due to the distribution of quartz sands of various genetic types in Ukraine - alluvial, glacial, marine, lacustrine, aeolian and others - there are opportunities for increasing their mineral raw material base.

To this end, it is planned to conduct search, search and evaluation and exploration work for the corresponding high-quality mineral within the promising areas of the Dnieper-Donetsk Basin, the Ukrainian Crystalline Shield and other regions.

Feldspar reserves in Ukraine

On the territory of Ukraine, within the Ukrainian Crystalline Shield, feldspar rocks of the Archean-Proterozoic era are widely distributed.

Pegmatites of 33 localization fields tend to massifs of granites of various complexes, forming clusters of mainly vein bodies with an average thickness of 3-8 meters, often of a differentiated structure.

The block and pegmatite zones of such veins are of industrial interest as feldspar raw materials.

For many years, the mineral and raw material complex has not met the needs of Ukrainian industry in feldspar raw materials due to the import of about 300 thousand tons of feldspar concentrate per year.

To increase the mineral and raw material base of feldspar, it is planned to:

-conduct search, and evaluation and reconnaissance work in promising areas of the Ukrainian Crystalline Shield;

-introduce domestic technologies for enrichment of alkaline kaolins.

Kaolins

Kaolins are distributed mainly in the Ukrainian Crystalline Shield, where one of the leading kaolin provinces in the world stands out, the richest in Europe, and can be traced from Polissya to the Sea of ​​Azov.

Kaolin has been exported from Ukraine to dozens of countries around the world for the production of the highest grades of porcelain and paper since the century before last.

As the experience of developed countries shows, effective extraction of high grades of these minerals is carried out in small deposits located in simple mining and geological conditions.

To increase the mineral raw material base of primary kaolins and slag, it is planned to conduct:

-search and evaluation and exploration works for primary kaolins within the promising areas of the Ukrainian Crystalline Shield;

-search and evaluation and exploration works for slag within the promising areas of Kharkiv, Sumy, Vinnytsia and Khmelnytsia regions.

Geological information and the procedure for obtaining it in Ukraine

The list of geological information includes information and/or data of geophysical, geochemical, hydrogeological, technological, physical-geographical, geodetic, geoastronomical, aerospace, petrographic, and paleontological content.

In addition, the content of geological information includes indicators that characterize the geological structure of the subsoil, mineral deposits, the composition of raw materials and the properties of rocks, ores, minerals, hydrocarbons, and groundwater.

Geological information is an object of civil law relations and can be used as a contribution to the authorized capital of legal entities.

Geological information created (acquired) with funds from the state budget is state property.

The State Service for Geology and Nadra is the administrator of geological information that is state property.

Primary geological information, which is state property, is subject to mandatory transfer to the State Repository of Geological Information and Stone Material (after its creation).

Geological information created (acquired) at the own expense of legal entities and individuals is their property. 

The owner of geological information shall notify the State Service for Geology and Subsoil of its creation, acquisition, transfer of ownership of geological information or the right to use it by him.

The owner of geological information may transfer primary geological information belonging to him, including geological information that cannot be digitized due to its physical properties (samples, etc.), for storage to the State Repository of Geological Information and Stone Material.

The agreement on the terms of subsoil use when obtaining a special permit for subsoil use specifies the obligation of the subsoil user to notify the State Geological and Subsoil Service of Ukraine about the creation, acquisition of geological information, transfer of ownership of geological information or the right to use it.

The results of work and research on the geological study of the subsoil are transferred by the performers for state (permanent) storage to the state scientific and production enterprise "State Information Geological Fund of Ukraine".

Secondary (processed) geological information, which is the result of work and research on the geological study of subsoil, is transferred by performers for state (permanent) storage in electronic form on a digital medium.

At its own expense, the applicant has the right to make an electronic copy of such geological information for its own processing or interpretation. The digital image created as a result of making such a copy is the property of the state, and the right to use (non-exclusively) the copy belongs to the applicant.

Information on geological information, regardless of the type and form of ownership, is subject to registration in the catalog of information on geological information, which is maintained by the State Information Geological Fund of Ukraine.

Dates on the creation, acquisition, transfer of ownership of geological information or granting of the right to use geological information shall be entered into the catalog by the subsoil user who is the owner or user of such information within ten working days from the date of its creation or change of ownership using electronic identification means - a qualified electronic signature or an advanced electronic signature.

Acceptance for state (permanent) storage in the State Geological Fund of secondary (processed) geological information that arose during the conduct of work and research on the geological study of the subsoil is carried out after the performers have entered the primary geological information used during the creation of materials submitted for state (permanent) storage into the catalog.

Disclosure of the content of geological information created (acquired) at the own expense of legal entities and individuals and information about which is recorded in the catalog is carried out exclusively with written consent and on the terms determined by the owner of such information.

Disposal of geological information involving the participation of counterparties subject to the Law of Ukraine “On Sanctions” and regulatory legal acts adopted in accordance with the said Law is prohibited.

Primary (raw) geological information, which is state property, is provided for review at its storage locations free of charge with simultaneous notification to the State Service for Geology and Mineral Resources.

Primary geological information, which is state property and is destroyed during processing due to its physical properties (stone material), is provided to the applicant for research after advance payment by him of compensation for the state's expenses for obtaining such geological information.

The use of secondary (processed) geological information that is state property is free of charge. Such geological information must be posted in open online access on the web portal of the State Geological Fund and/or provided in the form of copies (in electronic form).

The fee for secondary (processed) geological information, which is state property, is charged to subsoil users only in the event of obtaining a special permit for subsoil use as compensation for state expenses for geological exploration work carried out.

Production sharing agreements may contain different terms for the investor to obtain geological information.

In any case, it will be convenient for the investor if the operator of the agreement on the state side takes care of this issue independently.

Amber

It combines the varieties traditional for Ukraine: amber, topaz, beryl, rock crystal.

Resources of amber, marble onyx, rhodonite have been estimated.

Manifestations of emerald, aquamarine, ruby, sapphire, garnet, amethyst and various jewelry stones have also been discovered, but the prospects for their industrial development have not been clarified.

Of all the types of natural colored stones in Ukraine, amber is the most competitive.

At the same time, taking into account the natural specificity of the area of ​​distribution of this mineral - mainly forestry lands - the comprehensive development of deposits with further reclamation of the worked-out territories requires the determination at the state level of a list of lands disturbed by amber seekers, indicating the coordinates of the territories in Volyn, Zhytomyr and Rivne regions, and coordination of the action program with the central executive body that implements state policy in the field of forestry and hunting.

It is also time to map the distribution areas of strata containing amber.

Given the large area of ​​land disturbed by amber prospectors, it is necessary to give priority to geological exploration and amber mining within the already disturbed lands with subsequent reclamation of the relevant land plots.

Diamond deposits in Ukraine

Three areas of manifestation of kimberlite and lamproite magmatism (primary sources of diamonds) have been identified on the territory of Ukraine - the north of the Volyn-Podilsky plate, the northwestern and central parts of the Ukrainian crystalline shield, and the Azov massif and the zone of its articulation with the Donetsk basin.

The real prospects for discovering industrial diamonds are associated with metamorphosed conglomerates, primarily the Bilokorovytska paleodepression, where diamond grains of kimberlite genesis in the 4+2 millimeter class have already been identified.

In addition to the above areas, there are also real prospects for discovering industrial diamonds based on a complex of geological and geophysical data in other areas, but specialized exploration work to discover these precious stones requires attracting significant amounts of investment.

Peculiarities of the recovering the "depletion of expenditures''

The return of a subsoil area after the industrial development and extraction procedure is accompanied by the bearing of costs by investors.

In order to compensate for costs, Investors declare their demands for indexation thought returning the subsoil area from governments as parties to the production sharing agreement.

Ukraine, as a party to a production sharing agreement, is not aware of the institution of cost reimbursement in the "depletion" part, since the completion of accounting and allocation of costs to a joint accounting account is terminated by the investor from the moment of completion of hydrocarbon production, and not the conservation of the subsoil area.

It is obvious that indexation issues cannot be raised by the investor in writing to the state.

At the same time, the concept of "depletion expediture" is known in Indian practice in resolving disputes with investors in production sharing agreements.

According to the judge George Mathan of Income Tax Appelate Tribunal, in the case of 2154/Mds/2010, the investor has no right to the natural resources, and therefore he is not entitled to reimbursement of costs as compensation.

This aspect was examined in detail by the Court of Appeal in Sit&Anr. Vs Enron Oil& Gas India Ltd.

Thus, according to Article 297 of the Constitution, all natural resources are vested in the government.

The international principle of permanent sovereignty over all natural resources was approved by UN General Assembly Resolution/ 1803.

The subsoil user of the natural resources has no right to marketing, evaluation, or any compensation.

Acquiring a property interest in ownership of natural resources constitutes additional costs for the investor.

Inter-bank rates in production sharing agreements

For the purpose of indexing investors' costs in production sharing agreements, interbank rates such as LIBOR, AMERIBOR, and EULIBOR are agreed to be used.

However, the inclusion of any interbank rate in the content of a production sharing agreement creates institutional dissonance, since the subject of a production sharing agreement is hydrocarbon production, not a cash transaction and corporatization.

In addition, the extracted hydrocarbon raw materials are not yet a full-fledged asset, since they are not recorded on the balance sheet and are not profited by the investor.

The distribution of hydrocarbon products has its point of no apply, namely the steps of the state to recognize it before distribution.

Until the hydrocarbon feedstock is distributed, the "natural resource in the form of a mineral" is considered a rock of biological material for geological study.

Let's analyze the principle of applying inter-bank rates.

Inter-bank rates were created when as a benchmark rate of interest for transactions denominated in values.

They were devised by the Banking Federations, a trade association representing national banking associations in countries of the Regional Unions and the Free Trade Associations, representing the interests of participants in global financial markets.

Currently, Inter-bank offered rates administering by trade associations and banks.

If a bank’s treasury wanted to borrow money in the inter-bank market just before 11 am one day and was committed to borrowing a particular amount in a particular currency and tenor, and if the bank received several offers from other banks of equal credit standing to lend that sum, it would be rational for the bank to accept the cheapest offer. 

A benchmark rate is a rate, intended to reflect the current cost of borrowing in a market, which can be used as a reference point for setting other variable rates of interest. 

For example, the rate at which interest is payable on a loan may be fixed by reference to a benchmark rate, such as a rate fixed at 2% above LIBOR for six-month deposits.

As well as being widely used in commercial and consumer lending, interbank's rates were commonly used as a benchmark rate in financial derivatives, such as forward contracts and interest rate swaps. 

A financial derivative is an instrument which derives its value from an underlying financial risk – such as movements in an interest rate or the exchange rate for a currency or a share price or the price of a commodity. It is an instrument which can itself be traded.

An interest rate swap is a contract under which the parties agree to exchange interest payments on a notional principal amount on specified dates. (The principal amount is notional because it is never itself payable by one party to the other.) 

In the simplest type of interest rate swap, sometimes called a “plain vanilla” swap, Party A agrees to make periodic payments to Party B calculated at a fixed rate of interest and Party B agrees to make payments to Party A on the same dates calculated at a floating rate of interest. 

On each settlement date the payments due from each party to the other are netted off, and the difference is payable. 

Which party pays money to the other depends on whether, on the settlement date, the floating rate of interest is higher or lower than the fixed rate of interest. 

Movements in interest rates will also affect the price at which the swap can itself be traded. In broad terms the price of the swap will depend on the length of the contract and the present value of the future fixed and floating rate payment.

In many such interest rate swaps and other derivatives linked to interest rates which were traded in global financial markets at the relevant time (2006-2010), the floating rate of interest was defined by reference to LIBOR.

So, production sharing agreements are not, by their nature, similar to swap contracts, and therefore the monetary cost measurement tool of the interbank rate cannot be applied.

To avoid speculation, production sharing agreements should agree on a fixed indexation coefficient, rather than a floating bank rate from the financial market.

Limestone for the sugar industry

For technological support of the sugar industry, strong and chemically pure carbonate rocks with a calcium carbonate content of at least 93 percent are used.

Limestones of this type are common in the southern part of the Volyn-Podilskyi Plate, on the southwestern slope of the Ukrainian Crystalline Shield, where two reef ranges are traced - Podilskyi and Skhidnyi.

For the needs of the sugar industry, a number of deposits are being developed, the reserves of which can ensure the operation of Ukrainian sugar enterprises only in the near future.

At the same time, the reduction of limestone reserves requires urgent measures to accelerate exploration and exploration and evaluation work on high-grade limestone for the sugar industry in Vinnytsia and Kharkiv regions.

Enriched barite

Enriched barite is widely used in the chemical, paint, electrical, and oil and gas industries.

In Ukraine, barite deposits have been discovered in the Carpathian folded region and the junction zone of the Donetsk Basin with the Azov part of the Ukrainian crystalline shield.

Barite ores of Transcarpathia are contained in two deposits - Beregovskoye and Biganskoye, but their estimated reserves are small.

The presence of its own mineral and raw material base of barite ores has acquired special importance in recent years.

To increase the mineral and raw material base of barite, it is planned to carry out geological and exploration assessment work within the Beregov ore field.

The work will be carried out at the expense of the state budget, own funds of business entities and from other sources not prohibited by law.

Native sulfur deposits in Ukraine

Ukraine has long been one of the world leaders in the extraction of native sulfur.

At the same time, its main volume was extracted by open-pit mining.

Open-pit mining of sulfur led to irreversible environmental consequences, and the transition to a more progressive method of underground sulfur smelting led to a sharp reduction in production.

All reserves and projected resources of native sulfur are associated with the Carpathian sulfur basin, which is the main source of sulfur extraction for the agrochemical industry.

Currently, the only relatively profitable source of sulfur production in Ukraine is the Yazivske deposit, in which residual sulfur reserves amount to 17 million tons.

In this direction, it is planned to:

-conduct a complex of geological exploration works in areas adjacent to ore bodies that were in operation (Yazivske deposit), in order to develop protective measures;

-carry out forecasting and exploration and thematic works to reassess the prospects of sulfur content of the Carpathian Basin as a whole;

-assess promising areas for their development by underground smelting based on the results of exploration works.

-introduce new domestic technologies for sulfur extraction from Ukrainian oil fields.

Sapropel. Main features of the mineral in Ukraine

In Ukraine, sapropel deposits have been found in 351 water bodies, mainly in the northern regions. The main amount of reserves (74 percent) is concentrated in the water bodies of the Volyn region, in particular in the lakes of the Shatsk group. Of the 190 explored deposits in Volyn, 8 are operational, the rest are reserve.

In this direction, it is planned to carry out a forecast-cadastral and modern geological-economic assessment of promising areas and sapropel deposits with a radiation-hygienic assessment, in order to put them into industrial operation.

Reserves of potassium salts in Ukraine

Potassium salt is mainly used in the production of mineral fertilizers (potassium and complex). Various potassium salts in natural deposits are often found together with magnesium salts and can at the same time form double potassium-magnesium, chloride and sulfate salts.

On the territory of Ukraine, potassium salts are widespread within the Dnieper-Donetsk depression and the Precarpathian regional depression, which is associated with one of the world's largest provinces of sulfate-type potassium ores (the most valuable potassium ores).

They are mainly concentrated in two deposits (13 in total) - Stebnytsky and Piilo. However, outdated technology for processing extracted minerals and the lack of resources for its renewal led to a decrease in production and loss of salt, and later to a complete cessation of production activities due to intense environmental pollution.

The reserves of the vast majority of deposits were estimated back in 1948-1960, and currently they correspond only to prospective resources and partially previously explored reserves.

Therefore, it is important to increase the mineral raw material base of potassium salts and develop extraction while simultaneously complying with all environmental protection measures by:

- conducting exploration and evaluation works within the Precarpathian potash basin in order to identify areas with mining and geological conditions favorable for development;

- remediation of existing dumps and tailings ponds, prevention of man-made accidents and other emergencies.

Migrating hydrocarbons

The exploratory and industrial development of deposits gives rise to a phenomenon where mining companies fight for hydrocarbon volumes with both the state and investors working on production sharing agreements, because the "volume" of a special permit for subsoil use is not always possible to increase.

Ideas arise, such as an investor extracting hydrocarbons from a neighboring field.

It is clear that the initiators are filing lawsuits.

Let us consider such a case as “Union Of India vs Reliance Industries Limited & Ors. on 14 February, 2025”, considered on 14 February 2025 by the High Court of Delhi (FAO(OS) (COMM) 201/2023).

In it, the court, having taken a broad approach to the consideration of the case, came to the following conclusion.

Paragraph 117 Decision of the High Court of Delhi: «reservoir connectivity could not have been deduced by the learned by mere conjectures and surmises. Without adverting to the merits involved, we can say that though RIL has extracted the 'Migrated Gas', however, the said extraction/ exploration of the 'Migrated Gas' without any 'explicit and express permission' cannot be said to have been in 'most efficient manner for betterment of the Union', which did not belong to it and which did not entitle them to reaping any profits therefrom».

Phosphorites in Ukraine

Deposits of granular phosphorites have been discovered in Ukraine (Novopoltava deposit - loose ores, Donetsk Basin and Polissia - granular phosphorites, Volyn - lignite ores).

Recently, the amount of phosphorus fertilizers used in agriculture is only one-sixth of the amount needed to ensure high yields of agricultural crops.

Due to the low assimilation of phosphorus by plants (only a few percent) when using traditional phosphate mineral fertilizers, to achieve ecological and rational complex processing of phosphorus-containing minerals, it is necessary to implement the technology of production of phosphorus mineral fertilizers, which involves the use of sulfuric acid.

This approach makes it possible to carry out industrial development of numerous small phosphorite deposits and makes them attractive for investors.

In order to increase the mineral and raw material base of phosphorites, it is planned to carry out prospecting and evaluation works for igneous and granular phosphorites within the boundaries of the Volyn-Podilsky plate (Volyn and Vinnytsia regions), the Dnipro-Donetsk basin (Sum and Kharkiv regions) and Southern Donbass.

Features of auctions for the sale of special permits for the use of subsoil

The procedure for holding auctions for the sale of special permits for the use of subsoil is built on the algorithms of electronic platforms with automatic selection of the winner.

Authorized officials of the State Service of Geology and Subsoil of Ukraine are actually deprived of the opportunity to influence the outcome of the auction and arbitrarily select the winner.

The electronic auction system for the sale of permits provides constant and open access for observers to monitor the auction.

To participate in the auction, the applicant goes through the registration procedure and submits an application for participation in the auction by filling out an electronic form in his personal account.

The application for participation in the auction must indicate the registration number of the lot for which the application is submitted.

After completing the registration procedure and submitting the application, the applicant pays the guarantee deposit at any bank institution on the basis of the account formed by the organizer (operator) in the applicant's personal account or directly on the electronic platform using payment systems, if the functionality of the electronic platform provides such an opportunity.

The amount of the guarantee deposit is 20 percent of the initial price of the lot, but not less than 10,000,000 (ten million) hryvnias for minerals that are of strategic importance for the sustainable development of the economy and the defense capability of the state, 20,000,000 (twenty million) hryvnias for hydrocarbons, 2,000,000 (two million) hryvnias for deposits and/or subsoil areas containing sand, and 1,000,000 (one million) hryvnias for other minerals.

The application for participation in the auction must be certified by the applicant during the registration procedure in accordance with the legislation in the field of electronic document management, with a qualified electronic signature applied to it in accordance with the requirements of the Law of Ukraine “On Electronic Trust Services”.

During each auction round, all participants are provided with equal access to information about the progress of the auction, in particular about the locations of their price offers in the electronic trading system for the sale of permits from the lowest to the highest in each auction round and about the number of participants in a given auction round without their identification.

After the end of the next round of the auction, the electronic trading system for the sale of permits pauses for three minutes and announces the next round.

It should be noted that the auction system for the sale of special permits for the use of subsoil does not allow a decrease in the price step, just as the auction system does not allow a decrease in the price of the lot if the bidding did not take place.

The auction protocol is generated by the electronic trading system for the sale of permits on the day of the auction end and is posted in such system no later than the next business day.

The winner is the participant who submitted the highest price offer for the lot, if he has made at least one auction step - the participant with the next highest price offer, provided that he has made at least one auction step, and in the case of identical price offers - the participant who submitted it earlier.

In this case, the auction is held with an increased price of the initial lot, even if the plot was removed from the auction by order of the Ministry of Economy, Environment and Agriculture of Ukraine.

The winner, based on the signed auction protocol, applies to the State Service for Geology and Mineral Resources with a proposal to conclude a permit purchase and sale agreement or a permit purchase and sale agreement with a suspensive circumstance based on the auction results. Such an agreement is concluded between the State Service for Geology and Mineral Resources and the winner no later than 20 business days from the day following the day of formation of the electronic auction protocol and is published by the State Service for Geology and Mineral Resources in the system.

The auction is considered to have failed in the following cases:

- absence of participants;

- when less than two applications have been submitted before the deadline for accepting applications for participation in the auction;

- when, based on the results of the auction, no participant has made an auction step;

- when no price offer has been received before the end of the auction;

- when the winner does not have the right to be a subsoil user;

- when the participant with the next highest price offer, who was recognized as the winner, loses the right to receive a permit or refuses to sign a permit purchase and sale agreement or a permit purchase and sale agreement with a suspensive circumstance, or fails to sign such an agreement within the established time limits.

Calculation of the initial sale price at auction (electronic bidding) of a special permit for the use of subsoil

Investors, participating in the competition for the conclusion of production sharing agreements, are afraid of incurring losses due to the non-return of the deposit for hydrocarbon production, choosing the initial cost of a special permit for the use of subsoil as a reference point.

Resolution of the Cabinet of Ministers of Ukraine No. 1374 of October 15, 2004 approved the Methodology for determining the initial sale price at an auction (electronic auction) of a special permit for the use of subsoil.

Thus, the calculation of the initial price of a permit for a deposit or subsoil plot where there are no mineral reserves (resources) approved (tested) in accordance with the established procedure by the State Commission or not accounted for in the state balance of minerals is carried out according to the established values ​​of the fee for the year of use of the area of ​​the subsoil plot of certain categories.

The area of ​​subsoil areas where available/absent mineral reserves (resources) are approved (tested) in accordance with the established procedure by the State Commission or recorded in the state balance of mineral reserves is determined using a geographic information system.

The object of calculating the initial sale price of the permit is:

1) for permits related to the extraction of minerals:

а) the volume of reserves (resources) of minerals of the deposit or subsoil area, which are approved by the State Commission or recorded in the state balance of mineral reserves;

b) the volume of reserves of a new amount of mineral specified in the special permit for the use of subsoil, after conducting a state examination of the relevant geological materials and assessing the reserves of such mineral by the State Commission, including an increase in the reserves of such mineral simultaneously with the expansion of the boundaries of the subsoil area to a depth, which is confirmed by the data of the State Commission's protocol;

c) the volume of reserves of other minerals not specified in the special permit for subsoil use, after conducting a state examination of the relevant geological materials and assessing the reserves of such newly discovered minerals by the State Commission;

d) the volume of reserves in the event of a change in the type of mineral and (or) the direction of use of the mineral specified in the special permit for the use of subsoil, as a result of a repeated state examination and assessment of reserves of previously explored mineral deposits by the State Commission - if such changes led to a change in the type of commodity products of the mining enterprise - mineral (mineral raw material), which was taken to calculate the initial selling price of the permit at the time of its issuance;

e) the volume of groundwater sampling after conducting a state examination of the relevant geological materials and assessing reserves by the State Commission in the event of an increase in such volume;

f) the area of ​​the subsoil plot, if such a plot does not have mineral reserves approved (tested) by the State Commission or recorded in the state balance of mineral reserves;

2) for permits not related to the extraction of minerals:

a) active volume (area) - for underground storage of natural gas and gaseous products, storage of oil and other liquid petroleum products, discharge of wastewater, disposal of harmful substances and waste, aging of wine materials, production and storage of wine products, cultivation of mushrooms, vegetables, flowers and other plants, storage of food products, as well as industrial and other goods, substances and materials;

b) facility (permit) - for the disposal of harmful substances, the operation of underground structures related to the prevention of flooding of inactive mines and the creation of geological territories and facilities of important scientific, cultural, sanitary and health-improving significance (scientific landfills, geological reserves, nature reserves, natural monuments, medical and health-improving institutions, etc.);

c) depth - for facilities used to obtain geothermal energy (thermal energy from the subsoil);

d) the amount of increase in the active volume (area), depth and/or number of objects (permits), provided that they go beyond the boundaries of the subsoil area provided for use;

e) the amount of increase in the active volume (area), depth and/or number of objects (permits), provided that they go beyond the boundaries of the subsoil area provided for use.

To determine the volume of marketable products of a mining enterprise, where mineral reserves are approved by the State Commission or recorded in the state balance of mineral reserves (except for groundwater), the data established on the date of calculation are used, in order of priority in the following order:

1) in the protocols of the State Commission on the results of the state examination and assessment of mineral reserves (resources);

2) in the state balance of mineral reserves;

3) in the acts and protocols of the expert assessment of resources of prepared and discovered objects of the State Service for Geoscience and Mineral Resources, protocols of the scientific council for forecasting, scientific and technical councils of enterprises belonging to the sphere of management of the State Service for Geoscience and Mineral Resources.

Apatite. Agrochemical raw material

Phosphate raw materials are not mined in Ukraine.

The total reserves of apatite ores in Ukraine are almost entirely concentrated in two deposits - Stremyhorod and Novopoltav (as a concomitant component of titanium ores).

At the same time, near the Stremyhorod deposit, there are smaller deposits of the same ores, which lie at a shallower depth and require significantly smaller capital investments for their development.

The most promising of them are Vydiborske and Fedorivske. In addition, within the Korsun-Novomyrhorod pluton, the Nosachivske deposit of phosphorus-titanium ores has been explored.

The development of these deposits will provide a significant share of Ukraine's needs in phosphorus fertilizers.

An independent type of apatite ores are the apatite-containing basic rocks of the Holoskivska area (Khmelnytskyi region).

To increase the mineral and raw material base of apatite, it is planned to conduct:

-exploration and evaluation works for apatite and apatite-ilmenite ores in promising areas of the Ukrainian Crystal Shield and the Donetsk Folded Region;

-exploration and evaluation works for apatite ores within the Holoskivska ore-bearing field (Khmelnytskyi region).

Arbitration regarding internal agreements in production sharing contracts

Various contractual conflicts arise between the parties in a production sharing agreement regarding its implementation in a certain phase and stage.

The reason for this is undoubtedly the duration of the production sharing agreement in the long term (from 10 to 50 years).

Tribunals reach interesting conclusions when resolving disputes.

In this regard, the case of Monde Petroleum SA v. WesternZagros Limited (January 14, 2015), in which the Queen Bench Division of the Commercial Court sided independently illustrative.

Here is the extraction from the reached decision.

The dispute between the parties originates from an agreement for consultancy services dated 23 April 2006 ("the CSA"), by which WZL engaged the services of Monde to assist WZL in concluding and maintaining the exploration and production sharing agreement ("EPSA") which WZL was negotiating with the KRG, and in relation to business opportunities in the region more generally.

It provided for Monde to receive monthly fees, enhanced payments upon the achievement of certain milestones, and an option in certain circumstances to share in the benefit of a successful EPSA by acquiring a 3% interest.

The CSA contained a London arbitration clause.

In January 2007 WZL stopped paying the monthly fee invoiced by Monde, and on 16 March 2007 WZL purported to terminate the CSA pursuant to a contractual termination provision. WZL disputed that the unpaid amounts invoiced by Monde, which included a milestone payment, were due.

On 18 April 2007 the parties entered into a settlement agreement ("the Termination Agreement"), under which WZL was to pay Monde's disputed invoices in full and there was a mutual release and waiver of all claims by each party against the other in respect of the CSA. The Termination Agreement contained a clause conferring exclusive jurisdiction on the courts of England and Wales.

The Court alledged: it is not necessary to decide the "interesting question" of what the position would be if and when the Termination Agreement were rescinded in the Commercial Court proceedings.

If that occurred, the Tribunal could "see some force" in the argument that the restriction in the scope of the arbitration agreement brought about by the Termination Agreement no longer applies and that Monde's claim for damages for the alleged wrongful termination of the CSA was then covered by the arbitration agreement.

However in such circumstances there would be no possibility of Monde now falling back on its claims in the arbitration, because they had been withdrawn, and any new claims in arbitration would be time-barred.

How will the American-Ukrainian Reconstruction Investment Fund work?

For implementing the Mineral Agreement between Ukraine and the United States signed in May 2025, the Cabinet of Ministers of Ukraine outlined a roadmap for implementing the technical aspects of bilateral cooperation in the form of a limited partnership.

On November 5, 2025, the Cabinet of Ministers of Ukraine adopted Resolution No. 1411 "Some Issues of Ensuring the Implementation of the Agreement between the Government of Ukraine and the Government of the United States of America on the Establishment of the American-Ukrainian Reconstruction Investment Fund."

The main measures for the implementation of the Mineral Agreement include:

1) coordination of actions will take place between the Agency for the Support of Public-Private Partnerships and the United Stated International Development Financial Corporation;

2) if the Government of the United States of America aggreed a new military assistance in the partnership, the Ministry of Defense of Ukraine will provide the Ministry of Economy, Environment and Agriculture with the cost of military assistance;

3) agreements, contracts, license conditions and permits relating to the implementation of projects must contain conditions regarding the obligation of the project participant, in the event of raising capital for the implementation of the project, to send a written notification to the Agency for Support of Public-Private Partnerships no later than the day of providing information about such raising of capital to any third party;

4) project participants in the partnership must provide the Agency for Support of Public-Private Partnerships with investment information regarding the project (including business plans, financial forecasts, technical reports, feasibility studies, agreements on the purchase of extracted minerals) within one month from the date of receipt of a relevant request from it and, if necessary, clarifications to them;

5) information from the project participant about participation in the partnership guarantees notification of participation also to the project participant's creditors;

6) investment opportunities for raising capital for the implementation of the project and participation in the project should include a decision and the scope, structure and other terms of any such potential participation;

7) the obligation of the project participant is that until the date when the partnership confirms in writing the refusal to participate in the project (but no more than within three months from the date of notification) he ought to refrain from accepting the offer of any third parties to whom the notification was sent. In the event of launching the procedure for refusing the offer of third parties, the project participant must refrain from it for 6 months;

8) the project participant, from the date of notification and until the expiration of the six-month period, has the right to seek other potential investors (lenders), negotiate with such investors (lenders) and conclude agreements with them regarding an investment opportunity similar to that offered to the partnership or partner from the United States of America, but on terms that are not significantly more financially or economically advantageous;

9) the obligation of the project participant to refrain for six months from the date of submission of the notice of the right to purchase from providing any third party with significantly more advantageous economic or financial terms for a substantially similar quantity and quality of such assets relating to natural resources, taking into account relevant changes in market conditions;

10) capital raising for the implementation of a project is the financing of the project by the participant in whole or in part at the expense of borrowed funds (loans, other funds raised on terms of repayment, payment and maturity);

A project is the prospective and/or actual implementation of the following activities:

1) use (including geological exploration, experimental and industrial development, extraction, processing, production, purification) of assets related to natural resources, special permits for the use of subsoil may be granted based on the results of an auction (electronic bidding) or based on the results of a competition for the conclusion of production sharing agreements, or special permits for the use of subsoil that were granted after May 23, 2025;

2) design, construction, operation and maintenance of infrastructure facilities constructed to support operations of one or more assets related to natural resources, including mining and processing plants, inland waterway infrastructure facilities, access roads and pipelines intended for the transportation of natural resources, as well as departmental (technological) highways and other transport facilities intended for the transportation of natural resources, terminals and logistics facilities, oil refineries, preparation facilities, natural gas liquefaction and/or regasification facilities and other infrastructure facilities.

A project participant is a business entity that is a party to a production sharing agreement or an agreement on the terms of subsoil use and has a special permit for subsoil use granted in connection with the activity, or that is a party to a public-private partnership agreement or concession agreement.

Only time will show the effectiveness of the described model of a joint US-Ukrainian Reconstruction Investment Fund, but the conclusion of production sharing agreements by investors will allow for optimization of time and costs.

Quartzites and quartz sand

In Ukraine, quartzites, quartzite-like sandstones, and quartz sand, which are discovered and developed in geological formations of different ages, are used for the production of refractories (dinas, mullite, mortar, ferroalloys, and crystalline silicon).

The State Balance of Mineral Resources of Ukraine records 5 quartzite deposits, from which the Vasylkivske, Tovkachivske and Ovrutske deposits are being developed, and 2 quartzite-like sandstone deposits, from which the Banytske deposit is being developed.

The urgent task is to accelerate the discovery and exploration of high-quality quartzite deposits.

Deposits of quartz sand for refractories are localized in the Neogene sediments of the Donetsk folded region (Krasnohorivske, Riznykovske deposits).

-search and evaluation and exploration works on quartzites for the needs of ferrous metallurgy within the Donetsk basin and high-quality quartzites for the needs of non-ferrous metallurgy - within the Ukrainian Crystalline Shield and the Dnieper-Donetsk Depression;

-search and evaluation and exploration works on quartz sands within the promising areas of the Donetsk Folded Region, the Dnieper-Donetsk Depression, the Volyn-Podilsky Plate and the Ukrainian Crystalline Shield.

Subtleties of accounting in the activity of maintaining a production sharing agreement

The Law of Ukraine "On Production Sharing Agreements" No. 1039-XIV of September 14, 1999, although it does not directly distinguish the legal status of the "operator" of a production sharing agreement, defines cases when the acquisition of rights and obligations is possible for a separate legal entity in the role of the "operator".

Qualifying features that indicate the time, place, manner of appearance and role of the operator in a production sharing agreement disclosed in the following articles of the Law of Ukraine "On Production Sharing Agreements":

1) the state ensures that investors (including operators of agreements) are provided with approvals, quotas, special permits for the use of subsoil and licenses for the search (exploration) and exploitation of mineral deposits, and acts on the granting of a mining concession (part 3 of Article 4);

2) if there are two or more investors participating in a production sharing agreement, they must appoint one investor from among themselves as the operator of the agreement to represent their interests in relations with the state. For this purpose, investors are required to conclude an operating agreement (paragraph 2 of part 2 of Article 9);

3) the operator of the agreement and/or the representative office of the foreign investor on the territory of Ukraine shall have all the powers established for the investor by the production sharing agreement (paragraph 3 of part 2 of Article 9);

4) a multilateral production-sharing agreement must grant the operator of the agreement the rights to make independent decisions regarding the ongoing ongoing activities necessary to fulfill the tasks (plans, programs, etc.) stipulated in the production-sharing agreement (paragraph 8 of part 2 of Article 9);

5) the Cabinet of Ministers of Ukraine ensures the timely execution of documents in the name of all investors - participants in the production sharing agreement, the operator and/or, based on the application of the investor (operator of the agreement), facilitates the provision of such documents in the name of the relevant contractors, subcontractors and other organizations (paragraph 1 of Article 12);

6) when concluding a production sharing agreement, the costs incurred by investors - participants in the production sharing agreement, including a non-resident investor or his representative office, are subject to compensation with compensatory products, and the operator keeps records of such costs (paragraph 5 of part 5 of Article 19);

7) production sharing agreement may provide for the possibility of the agreement operator selling (realizing) investors' shares in the produced products with the operator's obligation to transfer the cash equivalent of the shares of such products to investors and/or the state (part 3 of article 20);

8) during the implementation of the production sharing agreement, the investor (operator of the agreement) pays taxes and fees (mandatory payments), as well as a single contribution to the mandatory state social insurance of Ukrainian employees and foreigners employed in Ukraine (Part 2 of Article 25);

9) a single contribution to the mandatory state social insurance of Ukrainian employees and foreigners employed in Ukraine is paid by the investor (transaction operator) in the general manner (part 3 of Article 25);

10) the state ensures the timely issuance of work permits, as well as, if necessary, service cards for all foreign workers employed by investors (including the operator of the agreement) under the production sharing agreement (part 2 of Article 35).

Thus, it can be safely assumed that an investor acquires the status of "transaction operator" in the following cases:

- for the investor (by absorbing the status of the investor into the status of the transaction operator, combining the role of the investor and the role of the operator in one legal entity);

- the status of "operator" is acquired after the registration of the investor's representative office on the territory of the state;

- in the event that two investors sign a production sharing agreement, an operator is necessarily determined between them;

- the rights and obligations of the operator and the investor are equal, and therefore the division of legal status is a more conditional category;

- the investor as an operator has full operational authority under the production sharing agreement;

- in cases of obtaining permits, employing employees, accruing tax liabilities and paying fees, the line between investor and operator is blurred;

- the operator is authorized to sell the investor's share in the produced products;

- the accounting of the investor's expenses is kept by the operator;

- communication with the state is the same for the operator and the investor.

However, combining the roles of operator with investors, or investors with operator(s), creates serious legal challenges in practice:

1) is it necessary to amend the production sharing agreement regarding the replacement of the operator if several investors decide to abandon the production sharing agreement?;

2) is it necessary to amend the production sharing agreement in the event of disputes between investors regarding the operating agreement?;

3) is the investor's withdrawal from the agreement accompanied by a change in the operator's "status" or does the investor automatically become a sole operator (investor)?;

4) how to transfer the costs incurred by one investor to one operator if unilateral transactions are not allowed?

The tax status of a production sharing agreement is special in that the accounting for the payment of taxes and fees is carried out through the assigned registration number of the production sharing agreement.

Despite the fact that a production sharing agreement does not create a separate legal entity for the investor (operator), the transfer of costs within one legal entity, which is the operator (investor), is still impossible.

An operator (investor) operating agreement cannot be concluded with a “production sharing agreement”.

The technical advantage of registering tax invoices of one legal entity under a separate tax registration number cannot be a reason for legal schemes for transferring costs in production sharing agreements.

Geological exploration works on the Subsoil Area

Geological exploration work on the subsoil area, especially well drilling, requires regional work to conduct in-depth studies of the paleological, tectonic, and generational conditions of the section using a basin analysis tool.

Investors (operators) of production sharing agreements perform: 

1) critical analysis of geological and geophysical works; 

2) comparison of geological information with reports; 

3) construction of a geological model of hydrocarbon sedimentation, generation, migration and accumulation;

4) establishment of tectonic events; 

5) detection of oil and gas-generating strata; 

6) reproduction of paleogological conditions; 

7) construction of basin models. 

If necessary, a geological and technical meeting should be held on basin modeling work.

Drilling wells in conditions of protection of endangered species

Preservation and reproduction of natural complexes, transfer of the environment to future generations is not only the main task of humanity, but also the main legal vector of the formation and development of social relations.

Modern energy cannot be built in parallel with the processes of protecting the environment, regenerating the plant and animal world, combating climate change, etc.

A delicate topic is also present during the development and pilot-industrial development of deposits, where natural complexes and ecosystems are disturbed during drilling.

Humanity, declaring high self-awareness and understanding of global challenges, seeks to find a balance between the right to activity and the right to a clean and safe environment.

An illustrative example is civil case 6:22-сv-0001, which was heard by the United State District Court for the Southern District of Texas Victoria Division in the suit of CONOCOPHILLIPS CO. AND BURLINGTON RESOURCES OIL & GAS CO. LP.

The dispute arose from the implementation of the Endangered Species Act via to the drilling events of the oil company.

Since, drilling of the was stressful for the endangered population of the animals, the judges was asked by the plaintiffs to issue restraining orders for the defenders to stop oil extraction.

The judge sided with the plaintiffs, citing the priority of federal law over Texas oil law.

The oil company had to take into account the sound vulnerability and sensitivity of the animals.

An oil company is liable even when the law is not formally violated.

In Ukraine, the situation is somewhat simpler; investors which adhere to the boundaries of nature reserves never have problems with environmental inspection.

What minerals are subject to a production sharing agreement?

The answer to the question posed in the title has two levels of understanding: technical and legal.

In terms of legal significance, there are no problems in understanding which minerals are the subject of a production sharing agreement.

Thus, the term "products", which is used in Article 1 of the Law of Ukraine "On Production Sharing Agreements" No. 1039-XIV of September 14, 1999 (hereinafter referred to as Law No. 1039-XIV of September 14, 1999), covers minerals of national and local importance (mineral raw materials) that are extracted (produced) during the development of mineral deposits.

That is, Law No. 1039-XIV of September 14, 1999 speaks in principle about "any" minerals.

On July 14, 2025, the Cabinet of Ministers of Ukraine, by Resolution No. 845, approved the list of subsoil areas (mineral deposits) of strategic and critical importance that will be provided for use through a competition for the conclusion of a production sharing agreement, in accordance with Appendix 4.

In Appendix No. 4, critical minerals include: 

1) vanadium ores; 

2) lithium ores; 

3) titanium ores; 

4) uranium ores; 

5) potassium salts.

It is obvious that Resolution of the Cabinet of Ministers of Ukraine No. 845 of July 14, 2025 has a political purpose and nature; it is aimed at implementing the creation of the American-Ukrainian Reconstruction Investment Fund.

Of course, with the level of interest of investors in Ukraine's minerals, amendments will be made to the Resolution of the Cabinet of Ministers of Ukraine No. 845 of July 14, 2025.

Returning to the technical understanding of which minerals are the subject of a production sharing agreement, the following should be noted.

Law of Ukraine No. 1039-XIV of September 14, 1999 operates with the concept of "significant and minor minerals".

In turn, significant mineral reserves are mineral reserves whose size exceeds insignificant mineral reserves.

Insignificant reserves are a list of minerals, which is determined according to the criteria specified by the Resolution of the Cabinet of Ministers of Ukraine.

The criteria by which insignificant reserves of useful substances are determined are based on the unit of measurement and threshold indicators.

By Resolution of the Cabinet of Ministers of Ukraine No. 1257 of 11.08.2000, minerals are classified according to the following criteria:

1) combustible minerals; 

2) metallic minerals; 

3) non-metals; 

4) mining chemicals; 

5) mining raw materials; 

6) construction raw materials.

Thus, according to Part 5 of Article 6 of the Law of Ukraine No. 1039-XIV of September 14, 1999, it follows that, by decisions of the Cabinet of Ministers of Ukraine and a local government body, a production sharing agreement may be concluded without a tender for subsoil areas with insignificant reserves of minerals, which is confirmed by the conclusions of the relevant state bodies.

Thus, subject to the conclusions of authorized state authorities, a production sharing agreement can be concluded for any product from among national and local minerals.

High-alumina raw materials

High-alumina ores include garnet-sillimanite and distene ores.

The State Balance of Mineral Resources of Ukraine includes reserves of disten-sillimanite as a related component in the sands of the Malyshivsk alluvial titanium-zirconium deposit and the Vovchansk zircon-rutile-ilmenite deposit.

The primary deposits of andalusite-distene-sillimanite quartzites and gneisses tend to the Precambrian metamorphic strata of the Ukrainian Crystalline Shield. The Azov region and the northern part of Zhytomyr region (Sushchano -Perzhan zone) are promising for the discovery of deposits of these minerals.

To increase the mineral raw material base of high-alumina ores, it is planned to conduct prospecting, prospecting and evaluation and exploration work on garnet-sillimanite and distene ores in promising areas of the Ukrainian Crystalline Shield.

Magnesite and its deposits

Ukraine has practically no own magnesite mining mineral raw material base, although the demand for such raw material is very large. Currently, the main needs for magnesite and its processing products are met through imports.

At the same time, their rocks are high-quality magnesium ores for the extraction of both metallic magnesium, suitable for the production of high-quality periclase refractories, and magnesium oxide (magnesia), but they have not yet been studied sufficiently for the purpose of magnesium ores.

To increase the mineral and raw material base of magnesium ores, it is planned to conduct exploration and exploration and evaluation works within the Pobuzsky ore district and the Middle Dnieper and Azov megablocks of the Ukrainian Crystalline Shield.