On Wednesday, August 23, the first meeting of the sectoral working group on critical materials took place as part of the effort to implement the Ukraine Plan within the Ukraine Facility program from the EU. This initiative also encompasses the development of sectoral strategies. The Ministry of Environmental Protection and Natural Resources of Ukraine, along with Ukraine Geological Survey, actively participate in the group’s activities. Providing analytical and consulting support for these sectoral groups is the role of the Kyiv School of Economics, while the Ministry of Economy of Ukraine oversees the coordination of these activities.

Creation of the sectoral working groups is one of the activities of the Good Governance Fund Project “Economic Hub: Sound PFM Policies and Vision for Growth,” which is supported by UK Aid from the UK Government. The project delivery partners are Abt Britain and Kyiv School of Economics.

Participating in the discussions with representatives of the critical materials industry were officials from the Ministry of Economy of Ukraine, the Ministry of Environmental Protection and Natural Resources of Ukraine, Ukraine Geological Survey, and specialists from Kyiv School of Economics.

Maksym Fedoseienko, the Head of Strategic Projects at KSE Institute, opened the meeting by discussing the primary tasks of the expert sectoral groups. He emphasized the significance of professional discourse between the government and the business sector. Fedoseienko pointed out that the accomplishments of the critical materials industry group will be factored into the government’s development of the Ukraine Plan for the next 4 years and sectoral strategies for 10 years.

Oleksiy Sobolev, Deputy Minister of Economy of Ukraine for Digital Development, Digital Transformation, and Digitalization, highlighted Ukraine’s possession of deposits of 12 priority strategic minerals and its ranking within the top 10 countries producing titanium, zirconium, graphite, and manganese. These resources provide an opportunity for fostering high-tech product manufacturing within the nation.

“Hence, the government’s objective is not solely expanding raw material extraction, but also establishing a complete cycle of innovative industries within the country. Through developing the processing sector, Ukraine can position itself as a leading European provider of lithium-ion batteries, fuel elements for nuclear power plants, and other finished goods.” Sobolev emphasized.

Ievhen Fedorenko, Deputy Minister of Environmental Protection and Natural Resources of Ukraine for European Integration, stated, “Our strategic aim is to integrate Ukraine into the world’s major chains of products, based on critical materials production. Given the ambitious goals of post-war reconstruction, we must discern the actual industry requirements and potentials.”

Throughout the discussions, governmental officials and representatives from core businesses deliberated on the unique dynamics of the critical materials industry’s development, considering the prospects of Ukraine’s EU integration. Other focal points included the acquisition and renewal of subsoil use licenses, risk insurance for potential investors, establishing clear criteria for designating critical materials in national legislation, and attracting technologies to the industry.

Participants of the meeting also noted potential changes in the present regulatory framework, factoring in the EU’s material recycling experience and the cultivation of cross-sector relationships to stimulate related industries’ growth.

“We anticipate that, in collaboration with sectoral working group members, we will formulate practical steps for a comprehensive set of reforms to attract strategic foreign investors, foster domestic producers, and develop R&D centers. We rely on business’s active engagement and resolution for financing strategic projects.”, shared Roman Opimakh, Chairman of Ukraine Geological Survey.

The first stage of sectoral working group collaboration with businesses will continue until October 2023. During this period, proposals for the Ukraine Plan, essential for the implementation of the Ukraine Facility financial assistance program, will be formulated. The program will provide Ukraine with 50 billion euros from the European Commission during 2024-2027.