In the context of global competition for access to critical materials, Ukraine has a chance to convert its resource potential into a sustainable economic and security advantage. Recognising this challenge, the Government of Ukraine has set clear priorities aimed at attracting large-scale investment into the subsoilsector.
The Better Regulation Delivery Office (BRDO), drawing on systematic work in the field of critical materials, provides expert support for government decisions and focuses on two instruments: an updated product sharing agreement (PSA) mechanism for solid minerals and a strategy for the development of critical raw materials (CRM) clusters, in the context of the new intergovernmental Ukraine–US agreement.
New PSA mechanism for solid minerals
A Production Sharing Agreement (PSA) is a globally proven instrument for attracting major, long-term investment in capital-intensive projects. Its key advantage is the stability and predictability of rules for the entire duration of the project, which is critically important for investors planning to invest hundreds of millions of dollars.
At present, however, PSA legislation is geared towards hydrocarbons. To attract investment in the extraction of solid minerals — primarily lithium and titanium — a modern law is needed that takes into account the specific features of the sector and guarantees transparent and competitive procedures.
According to the Government’s Action Plan, by the end of December 2025 a draft law will be submitted to the Ukrainian Parliament to relaunch the PSA mechanism for solid minerals. The first pilot tender will be held for concluding a PSA concerning the “Dobra” lithium deposit.
The development of new PSA legislation is a practical step towards implementing the agreement between the Government of Ukraine and the Government of the United States and for attracting capital from the newly established US–Ukraine Reconstruction Investment Fund. The updated mechanism will provide western investors with the expected legal safeguards.
Strategy for raw material clusters
Simply extracting and selling raw materials is an economic dead end. BRDO’s research on titanium shows that added value can increase up to 370 times when converting concentrate into final products. To ensure this profit remains in Ukraine, end-to-end production chains are required — from extraction and ore beneficiation to the manufacture of materials, components and finished goods.
The critical raw materials (CRM) cluster model refers to industrial ecosystems that combine extraction, processing, science and logistics. This makes it possible to produce goods with high added value, establish related enterprises and create skilled jobs.
This model corresponds with the requirements of the EU Critical Raw Materials Act, which promotes not only extraction but also processing of strategic raw materials in Europe and partner countries. By forming clusters, Ukraine moves from the role of a raw material supplier to that of a fully fledged industrial partner.
According to the Government’s Action Plan, by December 2025 a strategy for the development of CRM clusters is to be drafted and approved, serving as a roadmap for the creation of competitive production chains.
The combination of the updated PSA mechanism and the CRM cluster strategy creates a coherent framework:
- investors receive predictable rules, transparent tenders and legal safeguards;
- the state gains localisation of processing, growth of exports of high added-value products and new jobs;
- the sector shifts from a raw-material model to a full production cycle.
BRDO continues systematic expert work in both areas in order to transform the potential of Ukraine’s subsoil into real economic growth and to strengthen Ukraine’s position on the global stage.