Mining
Ukraine privatised its largest titanium producer to attract capital into a strategic sector. Then it restricted the exports that make the asset work. The second decision is now testing the first.
The deal
On 9 October 2024, the State Property Fund of Ukraine auctioned JSC United Mining and Chemical Company — UMCC — the country’s largest producer of titanium ore concentrates. The company operates the Vilnohirsk Mining and Metallurgical Plant in Dnipropetrovsk Oblast and the Irshansk Mining and Processing Plant in Zhytomyr Oblast.
There was one bidder. Cemin Ukraine, linked to NEQSOL Holding, offered UAH 3.94 billion against a UAH 3.90 billion starting price — about $96 million. The proceeds went to the state budget. The sale carried conditions: keep the core operations running, invest at least UAH 400 million in modernisation, and clear arrears to the budget that stood at UAH 609 million.
Then the rules changed
After privatisation, Ukraine introduced export restrictions on rutile and zircon. Those two products account for roughly half of UMCC’s gross value — and the restrictions mean the company cannot fully sell them on external markets.
The company has put the cost at about $35 million in lost foreign-currency revenue since the deal closed.
The criticism has not come only from the buyer. Dmytro Nataluha, head of the State Property Fund — the agency that ran the sale — has said the new product controls weaken the company’s investment appeal, on the grounds that the investor bought the asset under different conditions.
That is an unusual position for a seller to take about its own government’s policy, and it is the clearest signal of how the dispute is understood inside Kyiv.
The numbers since
The 2025 results were poor. Revenue fell 47% to UAH 1.51 billion and the company posted a net loss, against a UAH 17.1 million profit the year before.
The 2026 picture is better at the operating level. First-half output exceeded 84% of the company’s entire 2025 production, and it has won back customers in the United States, Mexico and the European Union. Operating and capital investment since October 2024 has passed UAH 2 billion.
A further $70 million is earmarked over two years — but explicitly conditioned on the regulatory environment improving. That is the sentence that matters. It converts a policy dispute into a capital-allocation decision with a number attached.
Why this is bigger than one company
Titanium feedstock is a critical mineral, and Western governments have spent three years trying to reduce dependence on Russian and Chinese supply. Ukraine holds some of Europe’s most significant reserves. UMCC is the obvious vehicle.
There is also a reasonable case for the restrictions. A state at war has grounds to keep strategic materials under control, and raw-concentrate exports arguably sell the resource cheaply when domestic processing could capture more value. The deep-processing upgrade the owner has discussed points in the same direction the policy does.
The problem is sequencing, not principle. Conditions introduced after a sale, affecting half the asset’s product value, are read by the next investor as a precedent — and Ukraine’s privatisation pipeline depends on there being a next investor.
What could go wrong
The restrictions stay and the investment does not arrive. The $70 million is conditional. If the condition is not met, the modernisation case weakens and the asset underperforms.
Wartime risk is unpriced. Both plants sit in a country under attack. Power, logistics and workforce availability are live constraints that no regulatory fix addresses.
Titanium is cyclical. Aerospace and defence demand is firm now. It has not always been, and a processing investment is a long-dated bet.
What to watch
Whether the rutile and zircon controls are amended, and whether the $70 million is committed. Those two answers, in that order, will say more about Ukraine’s investment climate than any index.
Further Reading
- NEQSOL Plans Additional Investment in Ukraine’s UMCC, Targets Titanium Deep-Processing Upgrade
- NEQSOL Holding: group structure and coverage
Sources: State Property Fund of Ukraine auction results, 9 October 2024; Interfax-Ukraine; Kyiv Independent; Ukranews; Open4Business. Figures in hryvnia converted at contemporaneous rates.
