One of the largest in Ukraine in terms of reserves, the Polokhovo lithium deposit in the Kirovograd region still remains the property of the Ukrlitiydobycha company, which has not started work at the deposit for years. In addition, it seems obvious that the very process of granting the company a special mining permit took place without an auction and in violation of the law. More on this later.
As is known, the ultimate owner of Ukrlitiydobycha LLC is Sergey Tabalov. His father, Alexander Tabalov, a former people’s deputy of the Batkivshchyna party, was one of the first “carcasses” in parliament during the presidency of Viktor Yanukovych in 2012: immediately after being elected to the Verkhovna Rada from the Batkivshchyna party, he refused to join the faction.
The media reported that Tabalov’s business partner in the early 2010s was Vitaly Khomutynnik, an ex-regional who owned the Ukrnaftoburenie company together with Igor Kolomoisky, Gennady Bogolyubov and Pavel Fuks.
What's wrong with granting a special permit?
So, at the beginning of 2017, the State Service of Geology and Subsoil of Ukraine issued an order granting Ukrlitiydobycha LLC a special permit for the extraction of lithium ores from the Polokhovo deposit in the Kirovograd region. It is worth noting that its reserves are estimated as one of the largest in Ukraine. Also, the State Geological Resources Agency granted a special permit without an auction procedure, citing the independent study of the deposit at its own expense and the corresponding testing of the reserves of this LLC.
In the protocol of the State Commission of Ukraine for Mineral Reserves (GKZ) we can see that Ukrlitiydobycha LLC received only a decision to approbate the reserves. However, the State Geological Resources Agency did not approve the reserves of the Polokhovskoye field. Thus, Ukrlitiydobycha LLC received a special permit for lithium production without holding an auction in violation, since it did not go through both stages of reviewing reserves.
Also, at the time of submitting the materials of the geological and economic assessment of the Polokhovskoe deposit to the State Reserves Committee, Ukrlitiydobycha did not have a special permit for the use of subsoil and did not have the legal status of a subsoil user.
Thus, since Ukrlitiydobycha was not a subsoil user, it did not have the right to submit geological and economic assessment materials to the State Reserves Committee. And the State Reserves Committee, accordingly, would have to return them to the customer. However, the State Commission, contrary to the provisions of the law, accepted the documents for consideration and issued a protocol on their basis.
In addition, the State Geodera did not have the authority to issue a special permit for the extraction of lithium ores without an auction, since at the time of issuing the special permit to Ukrlitiydobycha LLC this contradicted the Cabinet of Ministers Resolution No. 615 of May 30, 2011, which notes that the issuance of permits without an auction concerns exclusively oil and gas subsoil, and not lithium ores.
The courts left the largest lithium deposit to Ukrlitiydobycha
In 2018, the Kyiv prosecutor’s office filed a lawsuit with the administrative court demanding the cancellation of the order of the State Geology and Mineral Resources to issue a special permit to Ukrlitiydobycha for the extraction of lithium ores from the Polokhovskoe deposit. However, on December 10, 2018, the District Administrative Court rejected the prosecutor’s claim, and the appeal court on March 19, 2019 upheld this decision. At the same time, no cassation complaints were filed.
What led to the decision of the case not in favor of the state was that the prosecutor's office chose incorrect factual and regulatory grounds to substantiate its claim. Thus, the subsoil, which is the exclusive property of the people of Ukraine, is in the use of Ukrlitiydobycha.
Two years of “silence” at the field
However, it is worth noting that now there are grounds for the prosecutor’s office to file a new claim.
After all, on March 25, 2021, by Decree of the President, a decision of the National Security and Defense Council was put into effect, which recommended conducting unscheduled inspections of subsoil users who received a special permit without an auction. And by its act dated November 24, 2021, the State Geology and Natural Resources Authority established a violation by Ukrlitiydobycha, which did not begin work at the field within two years from the date of receiving the permit.
Thus, this, as well as the introduction of martial law on February 24, 2022, may serve as grounds for filing a new claim in order to protect the rights of the state and people of Ukraine. Whether the former “carcasses” of the Tabalovs will lose control over the field, time will tell. At the same time, it will be a good demonstration of whether the judicial system is ready for change.
