On September 30th, 2022, Vladimir Putin proclaimed the annexation of four Ukrainian regions to Russia. The move comprised an immediate escalation of the conflict, raising the possibility that Russia could use nuclear weapons to defend occupied territory, and spurring the Ukrainian government to apply formally for NATO membership.
The annexation expanded Russia's claimed territory by roughly one sixth of Ukraine's total land area; but equally as significant as the land may be what lies beneath it: Ukraine's plentiful stocks of raw materials. According to an analysis shared by the Washington Post, by mid-August, Russian-controlled areas in the east contained roughly $12.4 trillion worth of metals, minerals and energy deposits - nearly half of the dollar value of the countrywide total. This includes 63% of Ukraine's coal deposits, 11% of oil deposits, 20% of natural gas deposits, 42% of metals and 33% of deposits of rare earth and other critical minerals.
While Ukraine is famed for its status as the "breadbasket of Europe" - with a critical role in global food markets - less well known is its expansive stock of important minerals such as lithium and iron ore. Fig. 1 shows the distribution of some minerals throughout Ukraine, revealing the particular significance of the Ukrainian Shield and eastern portion of the Dnipro-Donets basin.
Fig. 1: Location of mineral deposits throughout Ukraine.
Source: College of Geologists, Spain
1. Lithium
Lithium is used most prominently in rechargeable batteries for devices such as mobiles phones, laptops and digital cameras, as well as electric vehicles*. Lithium alloys are also used for armour plating (magnesium-lithium) or in the manufacture of aircraft and high-speed trains (aluminium-lithium) given their strength and lightness. This makes lithium a mineral of high strategic significance.
*The US Geological Survey estimates that 74% of worldwide Lithium production is used for batteries.
The use of lithium in batteries lends it a critical role in the energy transition away from fossil fuels to renewable sources of energy. This is particularly the case for the European Union, which is attempting to mitigate its dependance on (Russian) oil and gas yet which is almost totally dependant on imports for its Lithium supply. A European Commission study from 2020 notes that increasing demand for Lithium for electric vehicles and energy storage purposes would necessitate a supply level for the EU up to 18 times its current amount by 2030, and 60 times by 2050. Despite this, the EU's current import dependence in Lithium is 100%*, meaning that it has virtually no domestic production (Fig. 2). The EU is attempting to remedy this by investing in "strategic autonomy" in batteries, an effort in which they have reached out to Ukraine for cooperation.
*Primarily from Chile (78%), the United States (8%) and Russia (4%), in the year 2020.
Fig. 2: Share of EU production of various technologies. The EU is highly dependent on imports of raw materials, presenting a high supply disruption risk.
Source: Financial Times
While Ukraine currently does not extract any Lithium, its estimated reserves are substantial. Shown below is a table of Lithium production and reserves for various countries, published in January 2022. While Ukraine is not included in this list, in February, Svitlana Vasylenko and Naumenko Uliana from the Institute of Geological Sciences in Ukraine published a preliminary estimate that Ukraine's Lithium reserves could total around 500,000 tonnes, placing it squarely in the ranks of countries like Zimbabwe and the United States, and comprising roughly 2% of the world total (this would rank Ukraine as 6th in the world).
Table 1: World production and reserves of Lithium in tonnes. Ukraine is not included in this list. Data for the United States is withheld (W) in the report.
Source: United States Geological Survey
Shown in Fig. 3 is a map of lithium ore spots, to be licensed to various companies as concessions. Two of the major spots are located in Donetsk and Zaporizhzhia, which Russia sought to annex in 2022.
Fig. 3: Map of Lithium ore concessions.
Source: Ukrainian Geological Survey
2. Titanium
Titanium has numerous applications, including in armour plating and the construction of aircraft, both for airframes and engine parts. Titanium sponge is the (mostly) pure form of titanium extracted from titanium ore, which can be used to make titanium alloys. Titanium (dioxide) pigment is widely used to make paints and plastics.
Ukraine accounted for roughly 2.5% of sponge production in 2021, as well as 3.4% of sponge production capacity (Table 2, this ranks Ukraine as 5th). Ukraine also held 1.1% of world reserves of ilmenite (rank 10th) and rutile (or 1.6% excluding China; rank 4th), two principal titanium dioxide ores (Table 3). Moreover, from 2017-2020, Ukraine accounted for 3% of titanium sponge imports into the United States, during years in which the United States' import reliance for sponge ranged from 50-88%.
Table 2: World production of titanium sponge and production capacity of titanium sponge and pigment in tonnes. Data for the United States is withheld (W) in the report.
Source: United States Geological Survey
Table 3: World reserves of ilmemite and rutile ore, in thousand tonnes of titanium dioxide content.
Source: United States Geological Survey
Shown in Fig. 4 is a map of titanium ore concessions, showing a predominance within the Ukrainian Shield (see Fig. 1), but also key spots in contested regions such as Kharkiv.
Fig. 4: Map of Titanium ore concessions.
Source: Ukrainian Geological Survey
3. Graphite and rare earth minerals
Ukraine also contains significant quantities of graphite and rare earth minerals. In terms of graphite, it accounted for 1.7% of world production in 2021 (or, 9.4% excluding China; rank 6th). This material is used in products such as batteries, pencils and nuclear reactor cores.
Table 5: World mine production of graphite.
Source: United States Geological Survey
4. Iron
The importance of iron is clear, it being the central component of steel alloys that are used in everything from bridges to bicycles to armaments. As can be seen from Table 6, in 2021, Ukraine was responsible for 3.2% of iron ore production (rank 6th) and 2.7% of reserves (rank 6th), as measured by iron content.
Table 6: World production and reserves of iron ore.
Source: United States Geological Survey
5. Gallium
This metal also carries immense strategic and industrial importance. In the United States, Gallium was used primarily for the manufacture of integrated circuits (77%) and optoelectronic devices, such as laser diodes and light-emitting diodes (21%). Ukraine apparently halted Gallium production in 2019; however, for the years 2017-2020, it still managed to account for 7% of U.S. Gallium imports. The United States is completely reliant on imports for its Gallium supply.
6. Others
In addition to all of this, in 2021, Ukraine also accounted for 0.6% of silicon production (ranked 14th), 9.3% of Manganese reserves (ranked 4th) and 1.0% of Magnesium production (ranked 7th or 8th).
7. Reflections
The inescapable conclusion from this brief survey is that Ukraine, and particularly the Donbas, is a vital reservoir of strategic minerals. It is this very ground over which the current war is being fought. As events quickly proceed on the ground, the resources stored underneath are poised to shape the global order of power in the long-run. Of course, it is not just Ukraine; of course, Ukraine possesses only a small slice of the world's minerals, and while control over this area is significant, is it not decisive in future great power conflict. However, there is little doubt that as Ukraine and Russia expend blood, steel and money to capture territory in the East, both sides remain aware of what exactly is at stake in this fight.