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30 I Cover story bne March 2025
Non-rare earth metal deposits
Trump has got it wrong. Ukraine doesn’t have rare earth metals, but it does have a lot of other valuable, and in demand, minerals, of which lithium and graphite are the most important and copper
and titanium the most valuable. But the current volume of production of all its minerals is tiny and the value of existing exports amounts to not more than $100mn a year. Building a fund to get to $500bn worth of revenues is a currently unrealistic without massive investment, if then.
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“Whilst support for Ukraine's mining industry to exploit its reserves of graphite and lithium could help integrate Ukraine into industrial and electric vehicle supply chains, the potential sums of revenue will probably be too small to move the needle for Ukraine's economy,” said Liam Peach, the senior emerging market economist with Capital Economics, in a note.
This mistake has been made before. The New York Times famously reported in 2010 a Pentagon assessment
of Afghanistan's mineral wealth, estimating it at $1 trillion, and called the country the "Saudi Arabia of lithium." This story was based on a 1980s Soviet geological survey, itself excavated in 2004 by the Americans from the Afghan archives, and not hands-on geological surveys conducted by US geologists.
During the US occupation of Afghanistan no major mining projects were undertaken and since then the estimates of its mineral wealth have been quietly downgraded. So far the Taliban have signed off on only one mining concession with the Chinese. A similar thing appears to be happening in Ukraine.
Lithium: Still, Ukraine has the largest deposits of lithium in Europe. The soft metal is key to the battery industry and EV business. These are primarily located in regions such as Kruta Balka, Dobra and Shevchenkivske, the biggest and which contains an estimated 12-14mn tonnes of lithium carbonate equivalent. However, it is also on the front line
and in danger of falling under Russian control. The Kruta Balka deposits are in the Zaporizhzhia region, which is also partially under Russian control.
Despite the promising potential of Ukraine’s lithium production, Kyiv has yet to even begin exploiting its deposits. So far it produces no lithium and exports nothing. It remains a potential. Still, the total reserves of an estimated 500,000 tonnes are worth between $10bn and $12.5bn at current prices
– still far away from the $500bn that Trump is demanding.
Graphite: Ukraine also boasts considerable graphite reserves, essential for applications in batteries, fuel cells, and as a lubricant in various industries. The country's sole natural graphite producer, Zavalivsky Graphite, suspended operations in December 2024 as the Armed Forces of Russia (AFR) advanced towards its mines and the annual production of 10,000 tonnes per year (tpy) has fallen away to next to nothing now. In the first eleven months of 2024 Ukraine exported 2,870 tonnes of graphite, worth less than $7mn.