Ukraine is endowed with vast natural resources, boasting significant concentrations of natural gas, coal, iron ore, manganese, sulphur, oil, salt, kaolin, titanium, timber, mercury, and magnesium. This abundance positions Ukraine among the global leaders in terms of mineral reserves. In recent years, the Government of Ukraine has introduced substantial reforms to modernise the permitting regime for mineral extraction, including the launch of an electronic register of special permits for subsoil use.
On 1 April 2025, pursuant to Order No. 109 of the State Service of Geology and Subsoil of Ukraine, the State Register of Special Permits for Subsoil Use entered full commercial operation. Special permits for subsoil use are now issued electronically as extracts from the Register. These are generated through the Unified Geoinformation System's electronic cabinet, alongside the subsoil user's own electronic portal and the Unified Environmental Platform 'EcoSystem'. Each extract provides up-to-date and reliable information as of the issuance date.
The Register, administered by Geoinform of Ukraine, forms part of the Unified State Electronic Geoinformation System for Subsoil Use and can be accessed via the State Geological Portal. It contains detailed information, including the date of issuance, validity, grounds for granting, extensions, amendments, the type and purpose of subsoil use, financial arrangements, ownership data, and conditions tied to subsoil use agreements or production sharing agreements.
Key Legal Considerations for Investors before, during and after the Registration of Subsoil Use Rights
1. Defining a Subsoil User
Ukrainian legislation sets out a definitive list of entities eligible to become subsoil users, including Ukrainian enterprises, institutions, organisations, citizens, as well as foreign individuals, legal entities, and associations incorporated in Ukraine. Those seeking rights to subsoil use involving strategic or critical mineral deposits (for instance, under production sharing agreements) must also meet additional statutory requirements, as stipulated in Article 13 of the Subsoil Code.
2. Permitting Process
Subsoil use is a state-licensed activity, so a potential investor will have to go through a difficult path to obtain a special permit for subsoil use). The State Service of Geology and Subsoil of Ukraine grants permits to the winners of electronic auctions for the sale of subsoil use permits or to the applicant in exceptional cases, as defined by the Subsoil Code, in a non-auction method.
Electronic Auction Process:
- Investors submit an application, including a closed price offer and a guarantee fee (20% of the starting lot price, subject to minimum thresholds of UAH 1–20 million depending on the mineral type and value).
- Following verification, applicants participate in a three-round, real-time interactive auction.
- The highest bidder is awarded the permit, provided at least one auction step was completed.
- The purchase must be finalised within 30 working days post-auction, with the balance paid accordingly.
Non-Auction Permits:
Only certain parties may secure permits outside of the auction system, such as:
- Subsoil users who have self-funded geological exploration and obtained state-verified mineral reserves;
- Landowners (up to 25 hectares) extracting minerals of local importance;
- Healthcare and sanatorium institutions extracting therapeutic natural resources;
- Applicants seeking groundwater (non-mineral) extraction within specified limits.
3. Mining Allotment Certificate
Entities holding a special permit and engaging in underground mining are also required to obtain a mining allotment certificate from the State Labour Service of Ukraine, free of charge, in accordance with Cabinet of Ministers Resolution No. 59 (27 January 1995).
4. Environmental Impact Assessment (EIA)
Under the Law of Ukraine 'On Environmental Impact Assessment', EIAs are mandatory for:
- Quarrying and open-pit mining exceeding 25 hectares;
- Peat extraction over 150 hectares;
- Extraction and processing of minerals beyond specified local-use exceptions.
EIAs are primarily issued by regional Departments of Ecology and Natural Resources, with oversight from the Ministry of Ecology in certain cases. Non-compliance can lead to operational suspensions or full termination, as evidenced by Ukrainian court practice enforcing environmental regulations.
Conclusion
Mining in Ukraine is a highly regulated and state-controlled activity. In order to acquire the right to use subsoil, an investor has to go through a complex and lengthy process, sometimes involving litigation. Having said that, compliance with all statutory conditions is an imperative component and a guarantee of stable and legal subsoil use throughout the whole period of such business. That is why, investors are encouraged to engage experienced legal counsel to auspiciously obtain and exercise their subsoil use rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
