The state could receive up to 15% of the profitable production from the development of the "Dilyanka Dobra" lithium deposit in the Kirovohrad region, however, according to the results of the competition, another proposal with significantly lower indicators was selected.
This was reported by Critical Metals Corp., commenting on its participation in the competition for the conclusion of a Production Sharing Agreement. According to the company, the second participant in the competition, in addition to the winner, was European Lithium Ukraine, a Ukrainian “subsidiary” of the international group Critical Metals, which submitted an application with the support of American and Australian investors.
The European Lithium Ukraine project envisaged the creation of a fully integrated production chain - from geological exploration to lithium extraction, enrichment and processing with the production of lithium hydroxide and carbonate. The total investment announced by the company amounted to more than 1.5 billion US dollars. Of this, 12.3 million dollars were planned to be spent on geological exploration, and another 1.5 billion dollars - on the creation of a mining and processing complex.
The project was expected to be financed from the company's own funds, raising capital through the placement of Critical Metals Corp. shares on the NASDAQ exchange, as well as loans from international financial institutions.
The key difference in the European Lithium Ukraine proposal was the revenue sharing model. If the investor’s actual costs exceeded 70% of the total production, the state’s share would be 4%. However, if the investor’s compensation share were reduced, the state could receive between 8% and 15% of the revenue, depending on the market price of lithium.
According to the company's estimates, under such a scenario, the state could receive from 16 million to 277 million USD annually, taking into account both the share in profitable production and the investor's income tax.
However, the winner of the competition was the American company Dobra Lithium Holdings JV, LLC. This was announced by Prime Minister Yulia Svyrydenko on January 12. According to her, the project involves a minimum capital investment of $179 million, of which $12 million will go to additional geological exploration and audit of reserves, and $167 million to organize mining and enrichment.
Economy Minister Oleksiy Sobolev reported that the shareholders of Dobra Lithium Holdings JV are international structures TechMet and The Rock Holdings. Among TechMet's key investors are the US International Development Finance Corporation, the Qatar Sovereign Fund and Mercuria Clean Energy Investments. The beneficiary of The Rock Holdings is American businessman and philanthropist Ronald Lauder.
According to Deputy Minister of Economy Yegor Perelygin, the state's share in the profitable products proposed by the winning company will likely be at least 4% or about 6%, depending on the structure of the compensatory products.
Thus, following the results of the competition, the state agreed to a model with a minimum guaranteed share, abandoning a scenario that could potentially provide significantly higher budget revenues in the event of a favorable situation in the lithium market.
