This article was written by Lilia Shepel. All views and opinions expressed are strictly her own.
I left my home of thirty-seven years in March 2022 with nothing but a small suitcase and made my way to Poland under fire. I never thought that three years later I might be writing an article as a metal merchant about Ukraine’s Critical Minerals and USA/Russian geopolitics. I have become, it seems, an unexpected witness to history and so feel compelled to express my personal view.
Today, I can only compare our war with Russia to the historic conflicts between Ireland and England. Our very close shared history with our neighbour leaves more than just a bitter taste in the mouth.
For those who have never visited Ukraine, let me tell you that many of the things you have heard are true. It is a beautiful country. The Dnipro River has provided a watery thoroughfare for people and trade for centuries, and our country has always been the breadbasket of Russia, Europe and Africa.
Russia from the time of Stalin’s regime saw minerals as a way to develop a nation held back in serfdom by the Tsars. Stalin created a million geologists. Everywhere in the empire of the USSR metals and minerals were sought and developed. Soviet metallurgists were treated above others in USSR and lived on special compounds. For this reason, Putin’s Russia believes that Ukraine’s wealth has been created by Russia and therefore has rights to it.
In recent weeks there has been much talk of Ukraine’s mineral wealth. But where are these minerals that are going to save us? What are they & who owns them?
After the USSR collapsed in the 1990s there was understandable confusion about the ownership of former Soviet Kombinats (factories), mines and deposits. Were the deposits now 100% Ukrainian? Or still Russian? Or were they now nobody’s? The fall of communism saw the rise of Russian oligarchs like Oleg Deripaska whose company ‘Rusal’, the world's largest producer of aluminium, hoodwinked Ukrainian shareholders and took control of plants such as Mykolaiv Alumina Plant, transferring all profits back to Moscow. In 2024, a decade after Russia’s aggression against Ukraine began, the factory was seized from Deripaska and nationalised by Ukraine.
One further wrinkle is the following. In the 90s, successive Ukrainian governments sold off the ‘leftovers’ from former USSR factories. In that post-Soviet period, the Ukrainian government found itself on an unexpected gravy train; they closed old mines and factories, chopped up old Soviet planes and weaponry, separating expensive metals such as zirconium, hafnium, rhenium and others, just to turn it into scrap and sell it to the West. By doing so, weapons and planes that could have been defending Ukraine today were destroyed, thanks to greed, with the proceeds filling Ukrainian politicians’ pockets.
For years Ukraine has been plundered from within and without.
Now the mineral wealth of Ukraine is being offered as a deal for peace but is this just a return to colonialism by another stronger power? How can the minerals be monetised as the President of the United States appears to believe they can? Perhaps Mr Trump assumes that Ukraine has more resources than it does?
In fact, to my knowledge, most of Ukraine’s mineral deposits are located in the territories already seized by Russia. For over 150 years the heart of Ukrainian metallurgy has been situated in and around the great and a very well-known city of Donetsk. Not for nothing was this extraordinary place twinned with famous steel cities such as Sheffield and Pittsburgh!
I remember always being told by my parents that Donetsk, rich in coal, was the powerhouse of Ukraine. Today, Ukraine appears to have lost this area to war that contained the fuel of the past, and so it must now concentrate its efforts on the exploitation of mineral deposits elsewhere in the country.
Apart from the known Donetsk coal/iron ore/water, the word was that Ukraine was rich in rare earths. Although I have only been in metals for three years, I was sceptical when I heard the headline about ‘a rare earth deal’ that might repay Ukraine’s debt to America.
The biggest producer of rare earth metals in the world is China. It produces 90% of the rare earth metals in the world while it mines only 60% of them. To produce each rare earth metal, they need to extract each metal separately from the ore through many steps like crushing, leaching with acids, solvent extraction and reduction through electrolysis or metallothermic reduction. These processes are very challenging and expensive, which is the reason that no other country in the world is keen to produce rare earth metals or can do so without significant government subsidiaries, such as afforded at plants in China.
The US is the second-largest rare earth miner in the world, after China, and it is hard to imagine how Ukraine could pay America back without introducing the possibility of rare earth concentrates being processed on Ukrainian soil. This would make the US less dependent on China for minerals. In the long term this could upstream processing.
Perhaps the US president when he used the term ‘rare earth’ simply meant ‘non-base metals’? If so, could titanium, lithium, graphite and others supply the revenue stream the American President was seeking? My country may have ilmenite in the northwest (the ore from which titanium is derived), but not in any quantity to compare with Australia or Brazil. We have lithium, but much less than the US itself. We have, according to the Ukrainian Geological Survey natural graphite in the West of the country but the likely quantities are small.
Would Ukrainians be willing to share the deposits and mines with the US in exchange for peace, even if it means to be ‘economically’ colonised by a new strong power?
The correspondent of ‘Sky news’, Ed Conway, accessed one of the mines in the North-West of Ukraine, 200 kilometres from Kyiv. Group DF has been excavating this mine for more than 15 years and has barely scratched the surface by now. The director of the company, Dmytro Holik, claimed that it would take at least 200 years to extract all the titanium ore from across Ukraine. As regards the ‘mineral deal’ he said that he would welcome America or any other country which is willing to invest into Ukraine to improve the country’s ability to extract its mineral reserves. "If a major international investor steps in - one with a long-term vision, not just for five or 10 years, but for 40 to 50 years - it would be a game-changer" – added Dmytro.
What is the European position on the ‘deal’? On the third anniversary of this war, Britain’s ousted ex-Prime Minister, Boris Johnson arrived in Ukraine on 24th February and told the BBC in Kyiv that the deal offered by the US was ‘a great prize’ because it would secure ‘a United States commitment under Donald Trump to a free, sovereign and secure Ukraine’.
What is clear now is that this deal is more necessary for Ukraine than many Ukrainians realise. It’s not just about the ceasefire but also about the investments that could help Ukraine recover after the brutal war by developing its deposits, mines and natural resources, and establishing trade and connections with other countries. Otherwise, all those deposits could slowly and quietly end-up in the pockets of Russian oligarchs once more!
The Ukrainian people were sold down the Dnipro River a long time ago and grey areas remain regarding the precise ownership of the resources and the terms of which they will be divided.
The next time I return to Ukraine, I can only hope that history has not been repeated and I will not be under fire and will not be under threat.
A deal with the Americans could work in the Ukrainians favour if the execution of the deal is fair, and an American economic presence in Ukraine will help to secure the peace and prosperity of Ukraine for many years.
One day soon I hope I can fly home to Ukraine (as opposed to the 30 plus hour bus journey via Poland), and that my little suitcase will be joined on the conveyer belt by huge Samsonite cases owned by American metallurgists, miners and businesspeople, whose presence will help to silence the sirens.
Born in Kyiv in 1984, Liliia Shepel studied linguistics before graduating from the National Aviation University with a degree in Engineering. During this time, she gained experience as a trainee at the Antonov Plant, famous for the An-225 Mriya heavy lift air cargo plane destroyed in the early days of the war. She took a second degree at the National Medical University followed by work as a marketing manager for a pharmaceutical company. She moved to UK in March 2022 and is now a trader at Lipmann Walton & Co Ltd.
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