At the end of January this year, European Lithium Limited, listed on the Australian Securities Exchange, announced that it had signed a binding agreement to acquire 100% of Velta’s shares. Was this a forced sale, or were you looking for a strategic investor?
When I started building Velta, I had two goals. First, I always wanted Velta to become a vertically integrated company, and we are moving in that direction. Second, I very much wanted to find either a strategic partner or, even better, to go public through an IPO. Back in 2011–2012, we were planning to list on AIM, the junior market of the London Stock Exchange, because our size did not allow us to go to the main market.
But when we were already preparing the prospectus, the IPO markets collapsed.
What year was that?
It was 2012. We were just about three months short.
The lead managers were two banks: ING London and the London branch of Macquarie, the largest Australian bank in the mining sector, from whom we learned a great deal.
At the time, we chose Baker McKenzie as our legal adviser, and Mirabaud, a major brokerage house with a 200-year history, as our Nomad — Nominated Adviser.
And although it did not work out the first time, I still kept trying to find a partner or go public. Unfortunately, since 2014, due to the war, IPO markets were again closed to us.
I did a great deal of work in 2019–2020, and at one point it seemed to me that we were on the verge of a deal, but again it did not happen because of COVID. Then the full-scale war began. The mining industry today is not living — it is surviving. Many enterprises have shut down, and, as I understand it, the remaining ones may also close in the near future. That is why we intensified our search for an investor.
Why was it European Lithium that acquired your company? Were there other bidders? How long did the negotiations take?
We held negotiations with almost ten companies over nearly a year.
Were these exclusively foreign companies, or were there also Ukrainian bidders?
I will not name names because I have signed NDAs. But there was one Ukrainian company — a very powerful group with which we had serious negotiations.
We also held very substantive discussions with several American companies, with whom we are still in very good contact, so perhaps in the future we will come up with something together.
How was the acquisition price determined? Based on European Lithium’s current share price, it can now be estimated at around $30 million, excluding debt. Why did you agree to payment in shares that give you 10% of the combined company?
I have closed more than one deal worth tens of millions of dollars in my life, because I have been in business for almost 35 years. I understand very clearly that if more than three months pass from the start of discussions, there will be no deal. If partners ask too many questions and keep looking for too long, there simply will not be a transaction.
In this case, everything developed quite quickly, and when I was offered shares in a public company, I liked the idea. Perhaps I would have preferred shares in a company listed on Nasdaq, but I agreed because European Lithium indirectly has a Nasdaq-listed company in its portfolio: European Lithium owns up to 45% of the shares of the U.S.-based Critical Metals, ticker CRML.
I really want my shares to grow. Now I have an incentive. Because if you receive cash, what do you do with it — just put it in your pocket?
One important point: I do not really like it when people write about our deal as the sale of Velta. This is not a sale; it is a share swap. It just so happened that, primarily because of the war, Velta’s shares are worth less than European Lithium’s shares.
As for how we calculated the price, frankly speaking, it was done very quickly. The specific negotiations on this did not take days, but hours.
You mention $30 million, but when we were making the deal, it was around $45 million. And I hope we will take certain steps that will bring it to $100 million. Overall, together with my partners, I want to build a billion-dollar company.
How does the fact that European Lithium managed to buy Velta’s debt to Prominvestbank from the Deposit Guarantee Fund for 10% of its nominal value affect the deal? Will you receive any compensation?
At the time of the deal, it was already known that the auction would take place. I know a thing or two about the investment market, especially in Ukraine, so I assumed there would be no other bidders. That is why one of the conditions of our deal was that European Lithium would buy the debt. In other words, this was a targeted investment within the framework of a previously signed agreement. On their part, it is a real investment in Ukraine’s economy. If it were not for our deal, they would never in their lives have gone to that auction or bought those debts.
Do these 10% guarantee you a seat on European Lithium’s board of directors? Will you become the second Ukrainian representative there together with Mykhailo Zhernov?
We are currently undergoing due diligence. After that, a shareholder agreement will be signed. In it, we will discuss who will be where. I do not have any particular desire to get involved in European Lithium’s internal processes, but we will discuss this.
When is the deal expected to close? Do you need to obtain any approvals — in Ukraine or Australia?
No government approvals are required either in Ukraine or in Australia. We are not violating antitrust legislation and have no obstacles to the transaction.
So the partners are now studying our operations in more detail and reviewing the company’s development plans.
I very much want the deal to close within one to two months. We moved very quickly, and I hope to maintain the same pace.
Did you consider the possibility of listing Velta separately, similar to how VEON listed Kyivstar? How does European Lithium view this idea, especially after buying out the debts?
To list on Nasdaq, you first need to have an economic foundation. We are working on that.
Second, there are two paths. The first is the classic IPO preparation route, which takes three years. The second is a so-called SPAC, through the acquisition of a shell company. This is the path VEON took with Kyivstar, which is why it happened very quickly for them.
We will decide this together with the partner.
One final clarification about the deal. Are you staying on as CEO of Velta and planning to continue managing the company?
I am staying on as CEO — that was one of the conditions of the deal.
And are you keeping your team?
Yes, yes. The team is being retained. Although I think there may be some changes. Right now I am directly involved in a major personnel transformation of the company. It is very likely that I will move to the position of chairman of the board of directors, while another person from our team will become CEO.
Do you already have a board?
Under the terms of the agreement, we have to form one; otherwise, we will not be able to go public.
What is the current status of the plant — is it operating or idle? If operating, at what capacity?
Velta has two plants. They have been operating at the Birzulivske deposit for 15 years and need repairs. Because of the war and a lack of funds, we were unable to do this for a very long time. Last year, the international trading group Traxys Group provided the company with $2 million in pre-export financing — these are our American partners. But these funds were not enough for a full repair and equipment replacement.
Currently, both plants are completing the repair campaign that we started immediately after signing the agreements with European Lithium. We received advance funds from our partners under the agreement. These are funds intended to stabilize the enterprise’s operations, part of which has been directed toward repairs. They are still not enough for a full reconstruction, but we are completing the repair work that we could not finish last year.
So we are not operating at the moment. We expect to resume operations around the end of this week.
In addition, we are not operating because at the end of September last year the price caps increased. This simply finished off Ukrainian industry; a very large number of enterprises stopped operating. The price caps are in effect until April 1. From April 1, we hope there will no longer be such an insane tariff as recently. With the two repaired plants, we will then be able to operate efficiently.
Electricity prices are a painful issue for all mining and metals companies. You said that the share of electricity in the production cost of titanium concentrate increased from 30% to more than 60%. How has this affected production profitability?
In Ukraine, electricity almost does not have a market price — today it is one price, tomorrow another. There is a certain day-ahead market, but when the state at its own discretion raises price caps, meaning the upper limit price for electricity, what can we even talk about?
Is your price with your supplier tied to the day-ahead market? Is it possible to enter into longer-term contracts with anyone? Are there no such offers on the market?
To sign a long-term contract, you need to be part of some kind of group. I do not want to comment too harshly; I do not have the words to describe the situation, and I want to be very careful. Let’s put it this way: you need to have a certain “talent” to be able to buy electricity directly from Energoatom. Apart from Energoatom, there are currently no other large electricity producers, especially in the winter period. In addition, you need to deposit a very large amount of money in state bank accounts, and that is impossible for a small enterprise like ours.
Does Velta buy power generators to support production, or does it plan to buy them?
What do you mean by generators? If you mean the generators that stand on the streets of our cities and work for restaurants or residential buildings, that capacity is definitely not enough for us. We need 10 MWh of electricity. We are not very large, but we are not small electricity consumers either.
We need industrial generation, and we will create our own as part of the enterprise’s development, within the plan we have approved with our partners. This will include gas-fired generation, solar generation, and storage.
By the way, given current gas prices, are you still considering gas generation?
We are considering it. We are considering it now, but we are calculating. We started developing this plan three months ago. And we definitely did not expect a war in the Persian Gulf.
What electricity price would be optimal for you to operate without losses? The current price caps are UAH 15.
For us to operate normally and efficiently, it would be a maximum of UAH 5. Anything above UAH 5 means we are working for traders and electricity producers.
Where does Velta sell its products? The State Customs Service reported in its statistics for the first two months of 2026 that Ukraine did not export titanium-bearing ore during that period. Does this mean that Velta currently has no exports? Why, and when will exports resume?
Mr. Yuriy, if you remember, two years ago you and I already clarified these export-related circumstances. According to the State Customs Service, Turkey was listed as the largest buyer of Ukrainian titanium raw materials. But there are no enterprises in Turkey that use ilmenite ore, which is the main type of titanium raw material.
Second, at that time we found out that the State Customs Service statistics showed very small export volumes — around 10% for all of Ukraine, and around 10% of Velta’s export volume.
At that time, I provided Interfax-Ukraine with our export declaration, where the volumes were completely different. And this did not even take into account exports by UMCC or, for example, by Mezhyrichensky Mining and Processing Plant — our competitors. I do not know where the State Customs Service gets its data from. The only thing that comes to mind is that perhaps they count only rutile as titanium-bearing raw material.
But Velta, for example, does not produce or export rutile. The only rutile producer in Ukraine is UMCC, and as far as I know, it cannot obtain a special permit from the State Export Control Service to export rutile, so they do not export it.
Where are you currently supplying? Is it America, Europe?
The largest share of our exports currently goes to the United States and Mexico. It is the same company — the American company Chemours, formerly DuPont. It owns two plants: one in the United States and one in Mexico. They decide themselves to which plant to redirect our ore, depending on where they need it more at a given time.
In addition, we supply to the Czech Republic.
After you started working with European Lithium, what changed in terms of sales? Where do you plan to supply products in the future?
The supply plan remains stable. However, I hope that after some time we will be able to resume cooperation with several other European companies. Once the Persian Gulf crisis passes, there will be an opportunity to supply another two or three European plants.
Regarding licenses: does European Lithium, together with Velta, plan to participate in auctions for ore mining licenses that were revoked from Firtash’s companies due to sanctions?
The very short answer is no.
A company from the Onur Group — Spys Ukraine LLC — which held a special permit for geological exploration and pilot industrial development of the Zhovti Vody area of gold and niobium ores in Dnipropetrovsk region, returned this permit due to unsatisfactory drilling results. Allegedly, the gold content in the ore at the Zhovti Vody area turned out to be three times lower than the investor expected, and there were complaints about inconsistencies in the State Service of Geology and Subsoil’s reserve data. How do you assess the reliability of the State Service’s data for other deposits, particularly titanium deposits?
The deposits I have encountered were very well documented back in Soviet times. Drilling at that time was of very high quality, and reserve assessment was also very high quality — I say this as a specialist. I do not know what was the situation at the deposits that Onur abandoned. What was the drilling grid there? What was the category?
If it was, for example, an exploration category under Soviet standards, I am not surprised it was not confirmed, because everything depends on the drilling grid — that is, how many wells were drilled at the deposit. If only one or two wells were drilled at the deposit and they bought the special permit on that basis, well, I would not have bought it. But if there was a large grid and the categories were C1 or C2, for example, then I would be very surprised that something was not confirmed.
And one more thing. You need to look at how many wells they drilled, who performed the laboratory work, and who evaluated the cores. This is a very large geological task. You know, if they drilled one or two wells and say there is nothing there, that raises questions. I would say the information that was published can be taken as a basis, but no conclusions can be drawn from it.
There are many attractive deposits, and not only titanium raw materials. There are many interesting deposits, some still without licenses, and some, in my opinion, are overvalued.
Overvalued on the secondary market or on the primary market?
Both. Several years ago, I was offered the opportunity to buy certain deposits, but when I started studying their geology, more interesting assets emerged where it made more sense to invest.
European Lithium lost the tender for the production-sharing agreement for the Dobra lithium site to a consortium led by TechMet. As a future shareholder, how do you assess European Lithium’s chances of still competing for this site, given the previous court disputes over it involving Petro-Consulting LLC?
Let me answer very carefully. As you just said, I am a future shareholder of European Lithium. Until I become a shareholder, Mykhailo Zhirnov, a member of European Lithium’s board of directors, can answer this question for you. I will not comment on these issues yet.
Velta previously presented to the American-Ukrainian Reconstruction Investment Fund a CRM — Critical Raw Materials — cluster project with a total investment of approximately $243 million over four years. What has been the response to this proposal? Did you officially submit this project for the fund’s consideration?
We presented this project long before the American-Ukrainian Fund was created; we presented it to DFC — the U.S. Development Finance Corporation. And we will, of course, announce news on this matter after signing. Currently, there are already companies in Ukraine that meet certain DFC criteria, and the fund’s criteria as well. I hope that at the second stage, in addition to DFC, the fund will also join our cooperation. But that will be a little later.
You advocated cooperation with the U.S. Department of Defense, now the Department of War. Did they listen to your proposals?
As for the American part of our business, due to a lack of funds we had to slow it down. Therefore, for the last year and a half we have not lobbied our interests or cooperated with the Department of Defense, now the Department of War. Now we will resume cooperation, especially since the administration there has completely changed over the past year and a half.
We will systematically establish cooperation with this respected U.S. government institution.
You planned to build a plant for the production of finished titanium products using innovative technology — first in the UAE, then in the United States. What is the current status of this project?
We forgot about the UAE a long time ago, even before the start of the full-scale war. There were many reasons for this, not directly related to our company’s activities. At the end of 2021, we decided to focus on the plant in the United States. It has already been partially designed.
I would like to note that within the framework of the deal with European Lithium, the main component is not the Ukrainian assets or the development of business in Ukraine, but the development of a technology company. This is the foundation of our deal with European Lithium.
The company’s research division has patented several inventions related to titanium production technology. Is work in this area continuing? What is new compared with existing technologies?
Our technology is completely different from the traditional Kroll process. This is the process that, for example, was used — unfortunately, I am now speaking in the past tense — at the Zaporizhzhia Titanium and Magnesium Plant, and which is used in China and Russia, the largest producers of titanium metal.
We have an entirely different technology. It differs in the number of processing stages and is more environmentally friendly. We have three U.S. patents, and it is precisely our technology that we plan to use to build an enterprise in the United States.
Our method does not involve producing titanium sponge. Under our technology, we produce metal powder for powder-based technologies. For example, 3D printing is the area that should develop most actively in the coming years.
Are you continuing to work in this area?
The main work has already been completed, but there is no limit to improvement. So we are carrying out some work to improve the process.
Velta founded the Titanium Industry Association. Is it operating, or is it a formal project?
The Association is not operating now. Earlier, I very much wanted Ukraine’s titanium industry to have its own representation and its own lobby at all levels of government. That is why I initiated it. I discussed this with the key players, such as the Zaporizhzhia Titanium and Magnesium Plant, which is not operating and currently has no activity. They are interested, but they have no capacity.
I proposed this to the Titanium Institute. They were very interested; they are promising guys, but they do not want to allocate money for any representative activities — they simply do not have that opportunity. Everyone is in crisis.
I also discussed this with the management of UMCC — Private Joint Stock Company United Mining and Chemical Company, UMCC Titanium. They also showed very strong interest, but two successive UMCC management teams told me: yes, it is very interesting, tomorrow we will cooperate — but no one wanted to go any further.
I decided that one person alone cannot fight for the whole field. I also have problems, I also have issues, and I do not want to carry the entire industry alone. Therefore, I put the Titanium Industry Association project on pause, and it is now frozen.
You joined the government’s advisory council on business. How do you assess the government’s activities? Previously, you proposed a number of steps to the Cabinet of Ministers for the extraction of strategically important minerals. Did they listen to you?
I am engaged in business, but of course I have cooperated extensively with government bodies, especially over the last seven years. The goal was to change something. I do not do that now. Nobody asks me anything. I do not want to assess the government’s activities.
I have information that this business council will be relaunched, there will be new members, newcomers, and new tasks. I very much want to see how it will work. If there is a need for my knowledge, I am always available and will always help the state. I believe I already had the opportunity to contribute to very interesting changes that actually took place. But at the moment, as I understand it, there is no need for my experience. I do not impose myself on anyone; perhaps our leadership knows better what it is doing.
Finally, we had planned to ask where you currently live and whether you intend to stay in Ukraine or leave. But we can see that you are in Ukraine, at your workplace. So the question is: how do you assess the prospects for the end of Russia’s war against Ukraine?
I cannot assess that. Since February 24, 2022, I have not been able to make forecasts. Because, let’s say, on February 20 I was absolutely sure that there would be no war, that all of this was nonsense and that we would avoid war. But I was wrong.
Now I do not want to make forecasts, because once you have been wrong about such important and terrible matters, you can be wrong again.
Interestingly, did your partners ask you what you think — whether they are ready to work under such conditions?
The most interesting thing is that if you mean European Lithium’s management, we did not discuss the issue of war and peace with them. You may believe it or not, but it is true. They did not ask, and we did not talk about it. They assess it at their own discretion, and we act at our own discretion as well. We hope the war ends as soon as possible. That is all I can say.
