Privatization of UMCC: Ukraine’s Strategic Resource Brazenly Stolen from Its People

Last year, he obtained the right to purchase the company at a privatization auction. Supposedly, 3.94 billion UAH are to be transferred to the state treasury.

Schemes That Never Change

The history of Ukraine’s titanium industry is a mirror of the national tragedy: how natural resources and rent, which should have become the foundation of national prosperity, have instead served for decades as a source of clan-based enrichment.
The largest producer of titanium concentrate in Europe — the United Mining and Chemical Company (UMCC) — has undergone every phase of a classic asset grab over the past decade: from oligarchic monopoly, through fictitious “state ownership,” to controlled privatization.

UMCC is a textbook case of how what is considered “state-owned” becomes neglected and later — a feeding trough for oligarchs, most often Russian ones.

Who Owns the Titanium Resource?

From 2004 to 2014, control over key titanium mining complexes — Irshansk GOK and Vilnohirsk MPC — belonged to Dmytro Firtash’s Group DF, which, with the silent consent of the authorities, leased them for nearly a decade.
It was during this period that Ukraine lost most of its direct income from titanium: no real reporting, no taxes, no transparent contracts — only shadow “exports,” while real profits flowed through offshore firms, intermediaries, and trading companies.

In 2014, after the Revolution of Dignity, the lease was not renewed, and the complexes returned to state ownership in the form of UMCC. It seemed that historical justice had been restored: the strategic resource was now under the control of the people.

"State-Owned" as a Scheme: Golden Age and the Start of Asset Draining

The first years of UMCC as a state company indeed appeared optimistic. In 2015–2016, the company declared record profits:

• 2015: revenue — 1.167 billion UAH, net profit — 773 million UAH (profitability over 66%)

• 2017: revenue — 2.77 billion UAH, profit — 443.7 million UAH (profitability 16%)

But starting in 2017, the picture changed: revenue continued to grow, but net profit sharply declined, with profitability dropping to nearly zero.

The Great Transformation: Political Context and the “Zeroing” of Profit

2019 marked a fundamental shift — not only in government but also in the status of state-owned assets. It was precisely in this year that UMCC abruptly entered a phase of “stagnation”: official revenue exceeded 3.5 billion UAH, while net profit… ZERO!

Why?

Officially — increased costs, external market conditions, war.
In reality — a systemic “optimization” reached a new level: profit was siphoned off through intermediaries, trading firms, fictitious exports, outsourcing, and consulting services.

Loss Estimation:

If we take the company’s average profitability during the “healthy” years (2015–2017, ≈41%), UMCC in 2019 should have shown at least 1.45 billion UAH in net profit — not zero.

How Much Was Actually Stolen?

• 2015 — the company brings 773 million UAH in profit

• 2017 — profit drops to 443.7 million with revenue of 2.77 billion

• 2019 — revenue at 3.5 billion, profit: 0

• 2021 — revenue at 4.59 billion, profit: around 0.2 billion

• 2023 — revenue at 1.95 billion, loss: 481 million

A calculation of losses based on standard profitability shows: Ukrainians missed out on over 5 billion UAH just in the years 2019–2023. But in fact, it’s much worse.

In 2015, the company operated honestly and showed real profitability. But already in 2016, the management “woke up” and cut two-thirds of the profit despite a sharp increase in revenue (to 4 billion)!

Then it got worse — profitability collapsed: in essence, everything that could be stolen was stolen. In 2019–2023, even the nominal profit “disappears.”

Hypothetical losses to the state for just these years: 14.327 billion UAH.

That is, more than 14 billion UAH that could have been directed toward the army, healthcare, or education — simply “evaporated.”

📈 The Dynamics of Theft

• 2015 — a “clean” start, profitability at 66%

• 2016 — someone “opened the valve” and immediately skimmed off 2 billion in profit

• 2017–2018 — the system operates in “tax minimization” mode: revenue grows, profit declines

• 2019–2023 — total destruction: the state formally receives nothing, the asset is prepared for a “fire sale”

🔍 Year-by-Year Explanation

• 2015: Honest reporting after returning to state control (or “didn’t have time” to create schemes)

• 2016: The real beginning of “scheming” — official profitability drops fourfold, revenue grows, and the budget receives mere pennies

• 2017–2018: Complete control of the schemes, new intermediaries and traders, part of the money disguised as fictitious expenses, part funneled offshore

• 2019–2021: “Political shift” — profitability near zero, the enterprise is “driven into loss” in preparation for privatization

• 2023: The final stage of the scheme — even losses are officially declared to justify a low auction price

Estimated Total “Theft” (2016–2023):

• 2016: ~2 billion UAH

• 2017: ~1.4 billion UAH

• 2018: ~2 billion UAH

• 2019: ~2.3 billion UAH

• 2020: ~1.7 billion UAH

• 2021: ~2.8 billion UAH

• 2022: ~1.3 billion UAH

• 2023: ~1.8 billion UAH

TOTAL: ≈ 14.3 billion UAH

This does not include gray exports, unpaid royalty payments, offshored foreign currency contracts, or management “bonuses.”

Foreign “Rescuer-Investor” or a Facade for Redistribution?

In December 2023, the State Property Fund put the devalued UMCC up for auction.
There was only one winner: LLC “Cemin Ukraine,” a structure of NEQSOL Holding from Azerbaijan.

• Sale price: 3.94 billion UAH

• Annual revenue in 2021: 4.59 billion UAH

• Real capitalization of the asset, considering remaining ore reserves — several times higher!

The Looting Scheme: Step by Step

1. The state-owned company formally holds the resource.

2. Operational costs are “inflated” via affiliated entities — repairs, marketing, logistics at triple the cost.

3. Export via traders reduces the official selling price.

4. The difference between the real price and the export price remains offshore.

5. Final reports show either minimal profit or “losses” — the state gets no taxes, while the money is “laundered” for private owners.

This scheme is confirmed by both journalistic investigations (Bihus.Info, 2022) and contract analyses that remained closed to the public for years.

The Final Chord: Privatization Under the Azerbaijani Flag

In 2024, UMCC was ceremonially sold to an “investor” — NEQSOL Holding (Azerbaijan, also the owner of Vodafone Ukraine).
Officially — a competitive auction.
In reality — a single participant, a minimal price (3.94 billion UAH — even less than the annual revenue in 2021), a promise of “investments” worth 400 million UAH, and a total absence of real state oversight.

Notably, NEQSOL had already previously “rescued” major Russian business from nationalization.
This holding acquired Vodafone Ukraine from MTS/Evtushenkov’s structure (Evtushenkov being close to the Kremlin), avoiding the nationalization of a Russian mobile operator during wartime.

Conclusion: Ukraine Was Robbed in Broad Daylight

The United Mining and Chemical Company is not just a titanium giant. It is a mirror of a system where:

• state ownership is merely a fiction,

• profit is a temporary feeding trough for the “chosen ones,”

• privatization is the final stage of withdrawing a strategic resource from state control.

Ukraine was robbed in front of everyone. All that remains of “state reforms” is a change of signage and new offshore addresses.
The titanium empire, which could have become the economic backbone of the country, has turned into a source of enrichment for the “invisible” masters who are used to looting under the guise of beautiful words.

UMCC is not just about a strategic metal.
It is a story about a state that always becomes a cover for private gain.
In a time of war, economic crisis, and the struggle for subjectivity, this story should become a lesson for everyone who believes in Ukraine’s future.

P.S.
This investigation is not just another “betrayal” or populist outcry.
It is a demand for an answer:
Does Ukraine have a future as an independent, economically viable country, if all strategic assets work not for the people, but for networks of intermediaries?
And if Ukraine wants to survive not only in war but also in global competition, it needs not privatization as an imitation of reform, but real control and the return of profits to the state budget.