Velta won a suit to introduce amendments to the license for Birzulivske mining and processing complex

Nov 26, 2018

On November 22, the District Administrative Court of Kyiv declared the actions and lack of actions of The State Geology and Subsurface Service of Ukraine (“Geonadra”) in regard to Birzulivske mining and processing complex of Velta LLC illegal. 

The cause of the lawsuit was the Geonadra’s instruction issued as a result of the verification of Velta’s compliance with the requirements of underground resources utilization legislation. Geonadra obliged the company to perform actions that were within an exclusive competence of The State Geology and Subsurface Service of Ukraine. Velta has repeatedly emphasized that such illegal demands could be viewed as a conflict of law used to manipulate the subsoil users. The court recognized the obligations imposed by Geonadra on Velta as illegal. 

The court has also canceled the order of suspending the special permit, by which the state authority had attempted to paralyze the operation at Birzulivske mining and processing complex. Back in September Velta received the court injunction of the force of this document.

In addition, the court found the lack of Geonadra’s actions illegal, as this had been delaying the issuance of permits. It resolved to introduce the amendments and issue the special permit for subsoil use to Velta LLC. The decision also indicates that the defendant is obliged to inform the court about the execution of judicial decision within 10 days from the moment of its entry into legal force. 

Over the past three years, the subsoil users in Ukraine have faced the need to defend their right to operate in courts with increasing frequency. According to the Unified State Register of Legal Proceedings, The State Geology and Subsurface Service of Ukraine is involved in 2912 lawsuits as of the end of November.

Background: Velta LLC is a Ukrainian company established in 2000. It owns two resource assets in Kirovograd region – Likarivske and Byrzulivske deposits. On the basis of the latter, the company built a mining and processing complex for ilmenite concentrate in record-breaking 8 months in 2011. The total number of jobs created is over 600. The company confirmed the resource base according to the JORC international standard. Velta is a transparent and socially responsible business. From January 1, 2010 until November 1, 2018 the company paid 240 860 054,82 UAH of taxes in the budgets of different levels, and contributed 29 021 411,28 UAH of social investments in the region.

Contact: Tel./Fax: +38 (056) 732 04 04, +38 050 453 05 81 Anna Kapustina, Manager of Public Affairs, Velta LLC