The founder of ATB returns to the big uranium game

The founder of ATB returns to the big uranium game

The Ukrainian Atomic Energy Systems Company owned by Hennadiy Butkevych and partners is showing interest in acquiring the rights to use subsoil resources at three uranium ore deposits.

What happened?

Two unrelated sources from the Government and the Ministry of Energy informed NADRA.INFO that the Ukrainian Atomic Energy Systems Company (UAES) expressed interest in initiating and/or participating in tenders for the conclusion of production-sharing agreements at three uranium ore deposits: Safonivske, Sadove, and Severynivske. The relevant application from the company was reportedly submitted in the fall of 2022.

The UAES did not deny the information from NADRA.INFO sources about their appeal to the central authorities regarding holding competitions for uranium PSAs:

"Considering the requirements of current legislation regarding the preservation of state secrets and the non-disclosure of other confidential information, we report the following.

LLC "Ukrainian Atomic Energy Systems" indeed considers the development of uranium ore deposits on the territory of Ukraine to be a promising direction, as under current conditions, it will strengthen our country’s energy independence. This issue is a priority for the company and has been a focused part of the strategy for both the company’s development and the industry as a whole for several years.

Our company is confident that all competitions and procedures for the distribution of production at uranium deposits will be transparent and open, and based on competitive principles. Accordingly, the results of the competitions will be public and accessible to the community.

As soon as the "Ukrainian Atomic Energy Systems" company has results for the aforementioned area of work, it will be able to share more detailed information," the company reported.

Uranium pause

LLC "Ukrainian Atomic Energy Systems" was the only private company in Ukraine that held special permits for geological exploration with pilot-industrial development of uranium ore deposits (Safonivska site, Mykhailivska area, Novohurivska site, Surska area).

In July 2020, UAES stated that for the first time in Ukraine, the company "compiled a resource report on the uranium deposit in accordance with international requirements, in this case according to the JORC code (Australia)." Reserves at the Safonivske deposit were estimated at 4,700 tons.

However, they failed to move to extraction: in October 2021, the State Service of Geology and Subsoil of Ukraine refused the company of Hennadiy Butkevych to issue a special permit for the extraction of uranium ores at the Safonivska site "due to the identification of unreliable data in the submitted documents."

In UAES, the refusal of the State Geology Service to issue the special permit was called "groundless": "today, an investor company can invest millions in conducting geological exploration of the deposit, search for partners, develop geological documentation, bear the costs of maintaining the staff of employees, and tomorrow it will be groundlessly denied the issuance of a special permit for the exploitation of the subsoil site. That is, the investor actually prepared the deposit for operation, but other players in the market, who will receive a special permit for extraction, will exploit it," the company stated. UAES did not specify what data was unreliable: "Our company is unaware of which specific unreliable data the State Service of Geology and Subsoil of Ukraine is referring to in its order, as such information is not present in the document itself."

Eventually, the special permit for extraction was never granted. In November 2021, the term of the uranium special permits for geological exploration expired.

And in December 2021, the Supreme Court overturned the decisions of previous court instances, based on which UAES was granted special subsoil use permits in 2018, essentially acknowledging the granting of these permits as illegal.

LLC "Ukrainian Atomic Energy Systems" was founded in 2015. The authorized capital is 25,000 UAH. Registration - Mykolaivka village, Mykolaiv region. Founders: Hennadiy Butkevych (83.4%), Oleksandr Nastenko (8.3%), Vitaliy Yakymenko (8.3%). Ultimate beneficial owner - Hennadiy Butkevych. Manager - Yuriy Bakarzhiyev (profile data YouControl).

Hennadiy Butkevych is the co-owner of the ATB Corporation and the founder of BGV Group Management. He ranked 16th among the 100 richest Ukrainians in 2020, according to Forbes Ukraine, with 415 million dollars.

Yuriy Bakarzhiyev has been an IAEA expert since 1998.

Vitaliy Yakymenko is the father of a member of the Verkhovna Rada of Ukraine, the head of the subcommittee on the protection and rational use of subsoil resources of the Verkhovna Rada’s Committee on Environmental Policy and Nature Management, Pavlo Yakymenko.

UAES is part of the BGV Group Management.

In July 2022, two UAES representatives (Oleksandr Lysenko and Vasyl Synchuk) joined the collegium of the State Commission of Ukraine on Mineral Resources (SCMR).

What next?

According to NADRA.INFO sources, at least one of the three deposits (on which UAES is investigating the possibility of participating in the competition for a PSA) - Severynivske - may be claimed by another enterprise - the state Eastern Mining and Enrichment Plant.

"Severynivske deposit is located near the Central and Michurinske deposits, where mining operations are carried out by SE "SkhidGZK". It is particularly noteworthy that the land plot within which the Severynivske deposit is located has been provided to SE "SkhidGZK" for mining operations until the decommissioning and subsequent conservation and liquidation of the mining workings of these deposits. Furthermore, SE "SkhidGZK" informed the Ministry of Energy about its plans to incorporate the Severynivske deposit as a resource for development by its own means," explained a NADRA.INFO source.

In addition, there is an objective obstacle on the way to PSA competitions - the delay in implementing the decision of the National Security and Defense Council of Ukraine from 16.07.2021 "On Stimulating the Search, Extraction, and Enrichment of Mineral Resources of Strategic Importance for Sustainable Development of the Economy and the State’s Defense Capability", enacted by the Decree of the President of Ukraine from 23.07.2021 No. 306.

With its decision, the NSDC obliged the Cabinet of Ministers of Ukraine to approve and annually update by the end of September 2021 the lists of subsoil plots (mineral deposits) that have strategic importance for the sustainable development of the economy and the state’s defense capability, which will be provided for use exclusively under production-sharing agreements or through auctions for the sale of special permits for subsoil use. The formation of the Lists should be carried out according to the criteria and separate procedure for identifying types of mineral resources with strategic importance for sustainable development of the economy and defense capability of the state, including priority development of such deposits, as developed and approved by industry legislation on subsoil use and PSA agreements.

The draft list of strategic subsoil plots for auctioning was developed by the State Service of Geology and Subsoil of Ukraine and published for discussion back in October 2021, but it remains unapproved.

Only at the end of January 2023 did the Government Committee on Economic, Financial Policy, Fuel and Energy Complex, and Strategic Industries manage to agree on the draft List of Strategic Subsoil Plots, which will be provided for use under production-sharing agreements.

Notably, following our publication regarding the approval of the draft list of strategic subsoil for PSAs, readers drew the attention of NADRA.INFO to another unapproved list: subsoil plots that have special scientific, cultural, or natural-reserve value and cannot be provided for use under production-sharing agreements. This list should have been approved to meet the requirements of Article 6 of the Law of Ukraine from 14.09.1999 "On Production Sharing Agreements" – "no later than three months from the date of enactment of this Law".

Who and why is not fulfilling the decisions of the NSDC and the Law of Ukraine "On Production Sharing Agreements" regarding the development and approval of lists of subsoil plots – we will tell when we receive answers to our inquiry: