Ukraine aims to be a key player in Europe’s energy future, leveraging its natural resources, rare earth minerals and its technology and ingenuity as a logical part of the plan to move forward. However, much of that ambition and potential is on hold due to the ongoing war.
With considerable proven reserves of oil and gas, as well as vital transit and transport infrastructure, Ukraine’s energy importance to Europe is already clear. The country holds an estimated 1 trillion cubic metres of untapped natural gas, though pre-war production was stalled at around 21 billion cubic metres annually.
Ukraine’s famously fertile black soil can produce enough food to feed a billion people, but interest is shifting toward what’s under that soil: rare and valuable mineral and metal resources — lithium, nickel, cobalt, manganese and titanium to name only some.
Experts and officials say these critical materials, crucial to green energy technology and worldwide transition efforts, lie in abundance beneath the ground and while global demand is higher than ever, conflict in Ukraine has halted production efforts.
“The country has a number of large sedimentary basins which means there is lithium potential and there are known lithium deposits,” says Andrii Sevriukov, CEO of the mining technology company Beholder. “But the potential is far beyond that – potentially Ukraine is the largest lithium deposit holder in Europe.”
“Ukraine has the largest deposits of lithium in Europe,” claims Roman Opimakh, General Director of the State Geological Service of Ukraine.
The exact amount is not certain and the figure would be confidential anyway, he says, but some experts have estimated that Ukraine has millions of tonnes of lithium ore, with 12-14 million at the Shevchenkivske deposit alone.
“Let’s put it this way. The discovered reserves of lithium, graphite, nickel and iron ore,” Mr Opimakh tells CEENERGYNEWS. “Will be enough to produce Li-batteries with a total capacity of 1,000 gigawatt hours (GWh) to support the manufacturing of around 20 million electric vehicles or be used to produce other devices.”
Mines are closed, for now
Lithium (usually alongside other critical materials) is present at four locations in Ukraine.
The first two are at Polokhivske and Dobra in central Ukraine and the more problematic deposits are in Shevchenkivske and Kruta Balka in the east, on territory currently occupied by the invading Russian army and very close to ongoing fighting.
Exploration and production is on hold at all sorts of mines throughout Ukraine and at all of the lithium deposits. At the same time, average global prices and the level of consumption continues to rise (90 per cent of all lithium is used in making batteries) but global production and output has dropped by about 40 per cent since 2022.
“The deposits in the occupied areas are for sure controlled by Russia and indirectly by their allies,” says Andrea Dini, a researcher and expert on critical raw materials at the Institute of Geosciences and Earth Resources in Italy.
“And the possible permanent invasion of those territories and the instability generated in the entire Black Sea area, will affect the shipment of raw materials produced from anywhere in Ukraine,” Mr Dini tells CEENERGYNEWS.
“Activities have slowed down drastically in some areas, such as coal and iron mining, because basically the production is located in east Ukraine and was damaged or temporarily occupied by Russians,” adds Mr Opimakh. “Other activities such as the oil and gas E&P industry keep working, despite the shelling and a decline in general demand in the market.”
Critical resources, rare minerals
In addition to lithium and nickel Ukraine also has lots of graphite and iron ore – all needed for manufacturing batteries and energy storage solutions. So vital and finite are all such materials and minerals that they’re protected by governments and labeled Critical Raw Materials (CRMs).
“Ukraine’s resource potential for green technology is one of the richest in the world,” points out Mr Opimkah. “There are deposits of 24 out of the European Union’s 34 critical minerals here in Ukraine.”
Under normal circumstances, Ukraine is among the top 10 producing countries for titanium, zirconium, graphite and manganese and in addition to lithium has proven reserves of beryllium and other rare earth elements.
Despite the war, the Ukrainian government is currently proposing and promoting a wide range of mining investment opportunities in order to unlock Ukraine’s CRM deposits. Nearly 100 projects relating to ten critical raw materials have so far been listed.
Officials and experts in Ukraine are quick to point out the role Ukraine could play in the transition to green energy, while recognising that exploration and production has been severely hampered by the ongoing war.
“The demand for leading-edge technologies will put immense pressure on sources of supply,” says Mr Opimakh of growing CRM demand globally. “Ukraine’s critical minerals sector is uniquely positioned to meet this growing consumption.”
Financing challenges
Even before the full-scale invasion, exploration and production at mines and deposits in Ukraine had difficulty breaking ground. There is a lot of work to be done, it takes a long time and it isn’t cheap.
“Ukraine is well explored, but that exploration was conducted during Soviet Union time,” Mr Sevriukov of Beholder tells CEENERGYNEWS. His company uses AI and drones to accelerate research and studies, cutting years off of the turnaround times at deposits.
“AI allows us to process data faster and make more precise predictions but also it allows a more flexible approach […],” he explains. “Beholder or any other similar technology can compress the exploration period to one year, meaning it’s only 3.5 years for operators or investors to wait for revenues instead of 15. This will encourage major companies to go into new locations and encourages the investors to invest.”
Getting that investment, especially at the moment, is another problem. “Private international businesses do not consider investing in the country when it’s at war,” says Denis Alyoshin, Chief Strategy Officer at UkrLithiumMining, the Ukrainian company that is developing the Polokhivske deposit in central Ukraine.
His firm wanted to raise 7-10 million US dollars in order to complete definitive feasibility studies, begin exploration and start production, when war broke out and delayed everything.
“Once the war is over, the project for sure will get financing for construction,” he tells CEENERGYNEWS. “My goal is to get financing for feasibility studies now – we can do it during the war – and be ready for construction once the war is over, when it will be easier to raise financing.”
Energetic potential
“Ukraine, together with Scandinavian countries and some portions of France, Spain and Portugal, have the best potential for the discovery of lithium deposits in hard rock,” states Mr Dini, the expert geologist, pointing to the undiscovered resources in Ukraine.
Andrii Sevriukov of Beholder also points to lots of untapped potential deposits throughout the country, but says making progress is hard when Ukraine was being unfairly painted as a country unsafe for investment.
“By bombing civil infrastructure Russia creates the image that Ukraine is not a safe place to invest as everything can be destroyed and lost,” he underlines. “Be it a house, a battery factory, or mining operations […] it harms the economy a lot.”
While raw commodities, rare earth minerals, battery metals, graphite and uranium are thought to be abundant throughout the country, so is the knowledge and desire to use these materials as well.
“I believe that Ukraine will not build its new economy based on export of raw materials but based on export of greater value,” Mr Sevriukov says. “Such as high tech products and their elements and components.”
“I am deeply convinced,” adds Mr Opimkah, “that our abundance of mineral resources and good mining legacy, proximity to Europe, simple and free access to geological data and easy permitting procedure ensure the advantages of Ukraine, and the arrival of foreign investors in our mining sector.”
According to Mr Dini, there is plenty of scope for new exploration “especially involving modern conceptual models, protocols and techniques developed in Western countries.”
“The same consideration can be applied to the development of gigafactories for battery production,” he concludes. “There is huge potential… but we have to wait to see the outcome of the war. Depending on which […] the country could continue to suffer instability that discourages investment.”
