Amidst growing demand for critical raw materials (CRMs) Ukraine is gaining recognition as a potential key player in the global supply chain—allowing the country to position itself as a strategic partner for both Europe and the world.
Ukraine offers long-term potential to meet Europe’s increasing need for minerals like lithium, but in the short-term the war in Ukraine poses challenges to realizing that potential.
CRMs have become essential as the world moves toward digitalization and greener technologies. These materials, which include graphite, lithium, cobalt, and rare earth elements, are necessary for the manufacturing of advanced electronics, electric vehicles, and renewable energy technologies. Ukraine is well positioned to become a major source for CRMs.
“Ukraine’s diverse geological zones make it a top 10 global supplier of mineral resources, holding around 5% of the world’s total,” according to a recent report by the World Economic Forum.
The International Energy Agency, (IEA), says the demand for lithium, nickel, cobalt, and rare earth elements could increase fourfold by 2040. The manufacturing of batteries, solar panels, wind turbines, and other technologies essential to reaching carbon neutrality depends on these materials.
Yet the supply chain for these minerals is highly concentrated. For example, the Democratic Republic of the Congo leads the world in cobalt production, accounting for more than 70% of total production. And China controls nearly 90% of the world’s supply of rare earth elements and dominates their production and processing.
“China’s dominance in processing critical minerals, highlighted in a recent UN report, gives the country an essential position in the global supply chain that causes some concern among competitors,” F&E Trends, has reported.
Some of Europe’s largest estimated lithium reserves
The potential and challenges of Ukraine’s resources have been brought to light by recent geological surveys by Ukraine and the EU.
Specifically, the Donetsk and Kirovograd regions of Ukraine are home to some of the largest estimated lithium reserves in Europe. Ukraine’s lithium reserves could be essential to meeting the world’s needs as the demand for lithium-ion batteries keeps rising.
“Ukraine’s potential to supply these minerals is crucial for countries looking to diversify their supply chains and reduce dependency on countries such as China and other non-democratic regimes,” according to a recent report by Dentons.
Nonetheless, realizing Ukraine’s full CRM potential will be difficult. An unstable environment has been brought about by the ongoing conflict with Russia, especially in the eastern regions where some of these resources are found. Furthermore, for the nation to grow its mining industry and guarantee sustainable practices, significant investments in technology, infrastructure, and knowledge are required, according to reports.
