Presenting the victory plan, President Zelensky talks about “strategically valuable resources” worth trillions of dollars. Do they really cost that much? Yep (but there are nuances)

On Thursday, October 17, President Volodymyr Zelensky presented a plan for Ukraineʼs victory over Russia at a meeting of the European Council in Brussels. The day before, he publicly presented this plan in the Verkhovna Rada. The plan contains five points. In the fourth of them, the economic one, it is proposed to conclude an agreement "on joint protection of critical resources available in Ukraine, joint investment and use." Among such resources, Volodymyr Zelensky named uranium, titanium, graphite and lithium, and estimated their value at "trillions of dollars." Is this estimate correct? Who owns these deposits and what is happening to them now? What does "joint investment and use" mean? Babel asked two experts to explain the basics of this topic: journalist and founder of nadra.info publication Volodymyr Boyko and doctor of Geological Sciences and an expert of the State Commission of Ukraine on Mineral Reserves Natalia Baryatska.

What does it all mean? Does the state want to sell strategic Ukrainian subsoil to foreign companies? Not at all. According to Ukrainian laws, the owner of all deposits is and forever remains the Ukrainian people. Some of the deposits have been transferred to state and private companies. There are two ways to transfer subsoil: through auctions, where special permits for the use of subsoil are sold; and through tenders for concluding so-called production sharing agreements (PSA).

In 2023-2024, the Cabinet of Ministers approved the lists of plots of strategic deposits, which can be put up for auction or for a competition for the conclusion of the PSA.

What does President Volodymyr Zelensky mean when he talks about "joint investment and use"? He is most likely talking about production sharing agreements. The main idea of PSA is that the foreign investor independently invests in geological exploration and prepares the site for mining. If the plot turns out to be "working", he first fully compensates his start-up costs, and then begins to give the state a share of the production in kind. Private companies usually conclude PSA with governments for high-risk (and potentially high-profit) projects. The Ukrainian specificity of PSA is prescribed in a special law.

Are strategic resources on the territory of Ukraine really worth trillions of dollars? In 2022, the Canadian consulting company SecDev estimated the full value of all mineral resources of Ukraine at $26 trillion — including coal, gas and oil.

Ukraine is really rich in strategic resources: approximately 7% of the worldʼs titanium reserves, 20% of graphite and 500 000 tons of lithium are located on the territory of Ukraine. This is extremely necessary for all industries that use electric batteries.

There are deposits of rare earth metals in Ukraine, mostly in the Zhytomyr region, near the border with Belarus. There has been a lot of talk about them in recent years — they are necessary to fulfill the European Green Deal and the US Green New Deal. Meanwhile, most of the worldʼs rare earth reserves are located in China.

And what is happening now with the titanium ores, uranium ores, lithium ores and graphite that the president talked about? A part of them is already extracted industrially. Special permits have been granted for some of the ores, but they are not mined. Special permits have not yet been issued for a share of ores. The owners of some mining companies found themselves under sanctions — first of all, Dmytro Firtash. In March-November 2023, the State Geological Survey suspended the permit to extract titanium ores for his plant, and the plant did not work until Firtashʼs company "defeated" the order through the court.

• Titanium-bearing ores are mined by four companies: "United Mining and Chemical Company", which was recently privatized; Mezhirichen Mining and Processing Plant (MPP) from Dmytro Firtashʼs group; Demurinsky MPP, which the state confiscated from a Russian businessman a year ago; "Velta" company, which was founded by businessman Andriy Brodskyi.
• Uranium ores are mined only by the state-owned Eastern MPP in the city of Zhovti Vody. Businessman Hennadiy Butkevych tried to get permission to mine uranium ores for his private company in 2021.
• Graphite is mined by the enterprise "Zavallivsky Graphite", the majority of which is owned by the Australian Volt Resources. Hennadiy Butkevych owns a special permit for graphite mining at the Balakhiv deposit — his company is currently designing a quarry and a factory.
• Lithium ores are not commercially mined by anyone. The only special permit for the mining of lithium ores is owned by the company "Ukrlitiiyvydobuvannya" Serhiy Tabalov, the youngest son of former MP Oleksandr Tabalov.