Ukraine is preparing a production sharing agreement for the Dobra lithium deposit in the Kirovohrad region. Officials estimate that total investment at the early stages could reach USD 700 million, while a scenario that includes lithium hydroxide production could require more than USD 1.8 billion.
For investors, this case matters because it shows how Ukraine intends to structure critical minerals projects, de-risk early phases, and set a long-term split between capital recovery and state participation.
What is being prepared and who is involved
The government is drafting a production sharing agreement with the contest winner, Dobra Lithium. Under the PSA model, the investor finances exploration and development, while the state grants subsoil use rights and receives a defined share of production or project income under agreed terms.
By law, the agreement draft can be developed and aligned within one year, but the stated target is to conclude the agreement within a few months. The agreement term is expected to be no more than 50 years.
Investment milestones and minimum commitments
The initial threshold referenced for the bid included USD 12 million for new geological exploration and an international audit of reserves. If industrial reserves are confirmed, an additional USD 167 million is expected for organizing mining and beneficiation.
These early commitments are not just formalities. They set the pace for reserve confirmation, project bankability, and the ability to attract larger pools of financing for the full buildout.
How the PSA split can shape returns
During the cost recovery phase, the investor may receive up to 70% of production as compensation until capital expenditures are recovered. The remaining 30% is split 96% to the investor and 4% to the state.
From the fourth or fifth year of lithium concentrate production, the compensation share is expected to fall to around 30% of product value. The remaining 70% would then be split 94% to the investor and 6% to the state.
- Why it matters: the split design signals a strong focus on early capital recovery to accelerate investment
- Upside optionality: adding hydroxide production raises capex but can increase value capture and supply-chain relevance
- Key risks: reserve confirmation, permitting and infrastructure readiness, security and logistics constraints
- What to watch: final PSA wording, timelines, and how processing plans are anchored in the project roadmap
