Strategic raw materials in Ukraine: A new pillar for EU supply chain resilience

Brussels, 23 April 2025

Executive Summary

• Vast Resources, Limited Output: Ukraine possesses confirmed reserves for over two-thirds of the 34 raw materials deemed critical by the EU​ (econpol.eu), including strategic metals like manganese, titanium, graphite, lithium, cobalt, nickel, and copper. However, despite this geological richness, current extraction levels are modest – a situation exacerbated by the war. For example, Ukraine had the world’s largest manganese ore reserves (~2.4 billion tonnes) (​fastcompany.com) and one of Europe’s largest graphite deposits, yet its 2022 production of these materials plummeted due to conflict (natural graphite output fell to under 1,000 tonnes (​world-mining-data.info)). Ukraine thus remains a minor player in global critical raw material supply chains today​ (econpol.eu), but holds immense potential for the future.

• Strategic Autonomy Potential: Closer integration of Ukraine’s raw materials sector could strengthen the EU’s resource security and reduce reliance on dominant suppliers. Many critical inputs for green and digital technologies – from EV batteries to aerospace alloys – are currently sourced largely from non-EU countries (often from a single supplier like China or the DRC). Tapping Ukraine’s resources would diversify supply. Notably, officials project that a Ukrainian graphite mining project alone could meet up to 10% of Europe’s graphite consumption by 2030 (​pravda.com.ua). Likewise, Ukraine’s lithium deposits (estimated ~500,000+ tonnes of Li content)​(weforum.org) could, if developed, place the country among the top five global lithium producers  (fastcompany.com), bolstering Europe’s battery supply chain. In sum, Ukraine is viewed as a potential key partner for enhancing EU raw material security (econpol.eu).

• Global Supply Context: The drive to develop Ukraine’s minerals comes amid heightened supply chain vulnerabilities revealed by geopolitical crises. Russia’s war in Ukraine underscored Europe’s exposure to supply shocks – not only in energy but also niche materials (e.g. Ukraine supplied ~90% of US semiconductor-grade neon pre-2022 (​weforum.org)). More broadly, China currently dominates refining and supply of many critical minerals (over 85% of rare earths and the bulk of battery materials globally​ (weforum.org)). By bringing Ukrainian resources online, the EU can mitigate the risk of single-source dependence in critical raw materials​ (econpol.eu). This aligns with a global trend of “friendshoring” supply chains to like-minded partners. There is also strategic urgency: foreign actors had already shown interest in Ukraine’s minerals (e.g. Chinese firms sought rights to Ukrainian lithium deposits in 2021​ (renewablematter.eu)), so greater EU involvement is seen as crucial to prevent adversaries from monopolizing these assets.

• EU-Ukraine Cooperation Frameworks: A formal EU-Ukraine Strategic Partnership on Raw Materials and Batteries was launched in July 2021 to facilitate this integration (ec.europa.eu). It focuses on aligning mining regulations, jointly developing Ukraine’s mineral projects, and building sustainable value chains​ (ec.europa.eu). Under this partnership, Ukraine joined EU industrial alliances and benefitted from technical assistance and investment support (including EU-funded digital geological data platforms and EIB/EBRD financing) (ec.europa.eu). These efforts dovetail with the EU’s Critical Raw Materials Act (CRMA) of 2023, which aims to ensure secure access to critical materials. The CRMA sets targets to boost EU/internal supply (10% extraction, 40% processing by 2030) and diversify sourcing so no more than 65% of any strategic material comes from a single country (project-syndicate.org). Ukraine’s supplies, as a friendly neighbor and EU candidate, could count toward these goals. Indeed, as part of CRMA implementation, the European Commission in early 2025 signaled it will designate Ukrainian mining projects as “strategic” and fast-track their development​ (pravda.com.ua). Joint EU-Ukraine projects – particularly on graphite and lithium – are expected to be announced, building on the 2021 MoU​ (pravda.com.ua).

Ukraine’s Resource Base: Riches and Realities

Ukraine is exceptionally well-endowed with mineral resources considered critical for modern industries. It ranks among the top countries in reserves of several strategic raw materials. For instance, Ukraine is estimated to hold the largest manganese reserves in the world, about 2.4 billion tonnes (​fastcompany.com), as well as enormous deposits of iron ore and titanium-bearing minerals. It is in the top ten globally for proven titanium ore reserves and, before the war, supplied roughly 6% of the world’s titanium concentrates (​es.scribd.com). In graphite, used in battery anodes and industrial applications, Ukraine’s reserves (over 18 million tonnes of graphite in situ) are the largest in Europe and fifth largest globally (​fastcompany.com). Notably, the Zavalievske graphite mine in central Ukraine was one of Europe’s only sources of natural graphite. Significant deposits of lithium (vital for EV batteries) have also been confirmed – Ukraine “possesses one of the largest lithium deposits in Europe”​ (es.scribd.com) with at least two major lithium ore fields (in Donetsk and Kirovohrad regions) identified. Other critical minerals found in Ukraine include rare earth elements, uranium, zirconium, and moderate quantities of nickel and cobalt (with officially estimated reserves of ~215,000 tonnes Ni and 8,800 tonnes Co in certain regions)​ (es.scribd.com). In short, Ukraine’s geology features a broad spectrum of the very materials underpinning the green and digital transition.

Despite this abundance, current extraction remains very limited for most critical raw materials. Prior to Russia’s full-scale invasion, Ukraine’s mining industry was focused on iron, manganese, titanium, and coal, along with significant production of uranium and gallium (and it was a major steel exporter). Critical battery metals like lithium, cobalt, and nickel were not yet being mined – exploration was underway and licenses had been issued, but no commercial production had started​ (es.scribd.com / ​fastcompany.com). Even for minerals that Ukraine did produce, its share in EU supply chains was minor. The EconPol analysis notes that Ukraine currently plays a minimal role in EU raw material imports​(econpol.eu). For example, in 2021 Ukraine provided some titanium feedstock and manganese ferroalloys to the EU, but these accounted for a small fraction of EU demand (the EU sources most of its manganese from South Africa, Gabon and imports most titanium from other producers).

The war since 2022 has further disrupted Ukraine’s mining output, underscoring the challenges in realizing its resource potential. Active mines in conflict areas halted operations, transport infrastructure was damaged, and many projects were put on hold. According to World Mining Data, Ukraine’s production of strategic minerals collapsed in 2022: natural graphite output fell from 17,000 tonnes in 2021 to just 846 tonnes in 2022 (​world-mining-data.info), as the main graphite mine was temporarily shut. Titanium ore (ilmenite) production also plummeted by ~63%, dropping from ~489,000 tonnes to 180,000 tonnes in 2022 (​world-mining-data.info). Manganese ore output, largely from mines in central Ukraine, roughly halved to ~373,000 tonnes in 2022​ (world-mining-data.info). These war-induced declines illustrate that vast reserves alone do not equate to supply – stability and investment are prerequisites. Notably, about 20% of Ukraine’s mineral deposits lie in territory under Russian occupation​ (fastcompany.com), including some lithium and rare earth prospects in the east and south, which complicates near-term development.

Going forward, if peace and stability are restored, unlocking Ukraine’s minerals will require substantial investment in modern mining and processing capacity. Experts emphasize that realizing Ukraine’s potential as a raw material supplier “requires more than mining” – significant downstream investment is needed to create integrated value chains​ (econpol.eu). For example, Ukraine would need new refining and processing plants so that it can export not just raw ore, but battery-grade lithium chemicals or purified graphite anodes, capturing more value. Currently, Ukraine lacks commercial-scale processing for materials like lithium or rare earths. Furthermore, many of its known deposits will require technological upgrades to mine efficiently; Ukraine’s manganese ores, for instance, are relatively low-grade (11–35% Mn content) and thus need advanced processing to be economically viable​ (fastcompany.com). The scale of investment and technology transfer needed is significant, but the resource base gives reason for optimism that Ukraine could emerge as a major supplier in the medium to long term, provided these challenges are met.

Relevance for EU Strategic Autonomy

For the European Union, integrating Ukraine’s raw materials is not just an altruistic aid effort – it is strategically aligned with the EU’s own supply security goals. The EU’s green transition and digital industries depend on a stable supply of critical raw materials, many of which are currently 100% imported. The European Commission has warned that “lithium and rare earths will soon be more important than oil and gas” in economic significance, yet Europe produces almost none of them domestically​ (euronews.com). Reducing import dependency, especially on single dominant suppliers, is a key pillar of the EU’s agenda for strategic autonomy. In this context, Ukraine represents a nearby, friendly source for several materials where the EU is vulnerable.

Diversification of supply: China today controls large portions of global critical mineral supply chains – not only mining (e.g. ~60% of rare earth mining) but especially processing (over 50% of lithium refining, 70% of cobalt refining, and nearly all graphite processing) (​weforum.org). This poses a risk to Europe: any geopolitical tension or export restriction from China could choke off inputs vital to European industries. Likewise, for some metals, the EU relies on a small number of countries (for example, the Democratic Republic of Congo for cobalt, Brazil and Mozambique for natural graphite, Chile for lithium, South Africa and Gabon for manganese). Integrating Ukrainian sources would spread this risk across an additional supplier. Crucially, Ukraine’s status as an EU candidate country and close partner means supply from Ukraine is seen as inherently more secure and politically reliable. In effect, raw materials from Ukraine could be treated almost as “home-grown” in the future single market, further insulating the EU from external shocks.

Meeting clean-tech demand: Ukraine’s contributions could directly support Europe’s clean energy and defense value chains. For instance, lithium and natural graphite from Ukraine could feed European battery gigafactories, supporting the EV rollout and energy storage objectives. Ukraine’s titanium (used in aerospace and defense) could help reduce Europe’s reliance on Russian titanium or other unstable sources – important after some Western imports of Russian titanium were curtailed due to sanctions. Similarly, manganese from Ukraine (a key component in certain EV battery chemistries and in steel alloys) could complement supplies from Africa, ensuring European steelmakers and battery producers have multiple options. In the aerospace sector, Europe’s need for high-purity titanium and other metals is growing; Ukraine, which was a significant supplier of titanium to the global aerospace industry before 2022​ (weforum.org), can play that role for Europe with the right partnerships.

Additionally, cost and proximity advantages come into play. Shorter supply chains (importing from a neighboring country by rail or Black Sea routes) could be more resilient and possibly cheaper than long transcontinental routes. With proper infrastructure, Ukrainian raw materials could reach European processors in days rather than weeks, reducing inventory needs. Moreover, co-developing projects with Ukraine aligns with EU values and trade principles – ensuring environmentally and socially responsible mining. The 2021 EU-Ukraine partnership explicitly prioritizes ESG standards in Ukraine’s mining projects (ec.europa.eu), meaning European investment can help Ukraine meet high sustainability benchmarks. This, in turn, contributes to a reliable supply of “clean” (responsibly sourced) raw materials for Europe’s green technologies.

It’s important to temper expectations with the timeline realities: even with strong support, Ukraine will not replace existing major suppliers overnight. Building mines and processing plants can take 5-10 years or more. However, the strategic logic is clear – by the 2030s, Ukraine could become a key pillar of Europe’s raw material supply chain, significantly boosting the EU’s self-reliance. Policymakers envision a scenario where a substantial share of critical minerals for European industry comes from either within the EU or from allied neighbors like Ukraine, rather than from distant, sometimes politically charged sources​ (econpol.eu). In essence, Ukraine’s integration would fortify the EU’s economic sovereignty in critical supply chains, making the bloc less susceptible to coercion or supply cut-offs in an increasingly volatile global landscape.

Global Supply Chain Context and Geopolitics

The interest in Ukraine’s raw materials cannot be separated from the broader global supply chain context and lessons from recent crises. The COVID-19 pandemic and the Russia-Ukraine war both exposed how dependent the world (and Europe in particular) is on a handful of supply nodes for critical commodities. In response, major economies are re-evaluating supply chains for strategic vulnerabilities. Ukraine’s mineral wealth has thus gained global attention as part of this recalibration.

Globally, supply chains for critical raw materials are often highly concentrated and geopolitically sensitive. Take cobalt and rare earth elements: the former is mostly mined in the Congo (often by Chinese-owned companies) and the latter mostly in China (or processed by China even if mined elsewhere). Lithium is somewhat more distributed (Australia, Chile, Argentina are top producers), but again China processes the majority of lithium into battery chemicals. Graphite is heavily dominated by China, which produces ~70-80% of natural graphite and practically 100% of the refined anode material used in batteries (​weforum.org). This concentration has prompted the EU, US, Japan, and others to seek new sources and partners to avoid bottlenecks.

Ukraine offers an interesting case: it is not a new discovery (Soviet geologists mapped many of these deposits decades ago​(fastcompany.com)), but it is newly accessible to Western markets and investments since its independence. During Soviet times, Ukrainian mines fed the USSR’s needs; post-1991, some operations slowed or stopped, and data on reserves became outdated (​fastcompany.com). Now, with the EU partnership, there’s an effort to update geological data and make it available (a “data room” for investors was created to de-classify old Soviet-era resource information (​single-market-economy.ec.europa.eu)). This transparency is drawing Western interest. For example, before the war, Australian and European companies were already engaging: in late 2021, Australia’s European Lithium Ltd. was close to securing rights to lithium deposits in Donetsk and Kirovohrad (​renewablematter.eu), and a Chinese mining firm (Chengxin Lithium) was also bidding. The war stalled these deals, but the point remains – Ukraine is on the radar of global resource investors.

Geopolitically, the outcome of the war will partly determine how and by whom these resources are developed. If Ukraine retains sovereignty over its resource-rich regions, Western (EU, U.S., allied) investment will likely dominate. If Russia were to entrench or expand its occupation, it could seize some deposits (indeed, lithium- and rare-earth-bearing areas in eastern Ukraine would be a “bonus” for the Kremlin if held (​renewablematter.eu)). Already, Russia’s invasion has cut off Ukrainian exports of certain materials (e.g. neon for chips, some iron and steel supplies). Conversely, a successful post-war reconstruction of Ukraine, supported by the EU, would likely prioritize the development of mines and refineries in a way that ties Ukraine’s output into European and global supply chains rather than Russian or Chinese spheres. In essence, Ukraine’s minerals have become another dimension of the geopolitical contest – whoever helps develop them will secure reliable access to them. The EU’s proactive partnership is therefore also a strategic move to ensure that, in a competitive global arena, these resources bolster democratic allies’ supply chains and not those of systemic rivals.

From a global market perspective, adding Ukraine as a significant producer in the 2030s could have stabilizing effects. More diversified production generally means more robust supply and potentially moderated prices for critical materials. For example, if Ukrainian lithium comes online, it could help prevent extreme price spikes as EV demand soars, benefiting all consumers. Similarly, Ukrainian graphite or manganese entering the market gives battery manufacturers alternative sourcing options. Of course, developing Ukraine’s capacity will take time and will occur in parallel with efforts by other countries (Canada, Australia, African nations) to ramp up their critical minerals production. The worldwide scramble for critical raw materials is on, and Ukraine is one of the major new frontiers in this landscape​(weforum.org). Its integration into the Western supply network is viewed as a win-win: helping Ukraine economically while contributing to the resilience of global supply chains by adding a new, significant source of high-demand minerals​ (econpol.eu).

EU–Ukraine Cooperation Frameworks and Initiatives

To capitalize on these opportunities, the EU and Ukraine have established and are expanding a comprehensive cooperation framework on raw materials. The cornerstone is the EU–Ukraine Strategic Partnership on Critical Raw Materials and Batteries, signed in July 2021 (ec.europa.eu). This partnership laid the groundwork well before the current crisis, reflecting foresight on both sides. It set out several concrete areas of collaboration:

• Policy alignment and standards: Ukraine agreed to approximate its mining and environmental standards with EU best practices (ec.europa.eu). This means adopting stringent environmental, social, and governance (ESG) criteria in extractive projects, ensuring that new mining ventures meet the expectations of European markets and regulators. Harmonizing regulations also makes it easier for EU companies to invest in Ukraine’s mining sector, since permitting processes and rules will become more familiar.

• Integration of value chains: The partnership aims to integrate Ukraine into EU critical raw material and battery value chains (ec.europa.eu). Practically, this involves joint ventures between European and Ukrainian companies, facilitated by platforms like the European Raw Materials Alliance (ERMA) and European Battery Alliance. Through these alliances, EU firms, Ukrainian state agencies, and private sector players can identify projects of mutual interest – for example, developing a lithium mine with EU offtake agreements for a battery plant, or upgrading a titanium processing facility with European technology. Vice-President Maroš Šefčovič heralded this cooperation as a new chapter that “will bring a wide range of opportunities for EU and Ukrainian industry” and help create jobs in both places​ (ec.europa.eu).

• Research, innovation, and data: Recognizing that much of Ukraine’s geological data needed modernization, the partnership supports joint research and the digitalization of Ukraine’s resource database (​ec.europa.eu). EU technical assistance (initial €750k in 2021, with more from 2022​ (ec.europa.eu)) has been used to set up a digital “data room” of geological information and to re-evaluate Soviet-era reserve estimates under international standards. This effort directly addresses one hurdle to investment – reliable data. Additionally, cooperation in R&D (via Horizon Europe programs) is encouraged, such as using EU satellite Earth observation (Copernicus) to identify new mineral occurrences and monitor mines​ (ec.europa.eu).

• Investment and financing: The EU is actively backing financing for projects under the partnership. The European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) are mobilizing funds to support viable raw material projects in Ukraine (ec.europa.eu). This might take the form of loans or guarantees for mining and processing infrastructure. The partnership also explores public-private investment via the EU’s business investment platforms, effectively matchmaking Ukrainian projects with European investors (ec.europa.eu). With the war’s disruption, some of these initiatives were delayed, but they are now resuming with vigor.

With the EU Critical Raw Materials Act coming into force (expected in 2024/25), these cooperative efforts gain a formal strategic underpinning. The CRMA will allow the EU to identify “Strategic Projects” in critical raw materials, including in third countries, that are essential for the EU supply chain. Such projects can benefit from streamlined permitting, access to funding, and offtake agreements. It is anticipated that several Ukrainian projects will be tagged as strategic – effectively fast-tracking them as part of Europe’s secure supply base. Recent statements by EU officials confirm this direction: Stéphane Séjourné, European Commissioner for Industry, announced in February 2025 that joint projects with Ukraine will commence as early as March 2025, leveraging the pre-war agreement​ (pravda.com.ua). He highlighted a graphite extraction project as a prime candidate, noting the EU’s particular interest in Ukrainian graphite and confirming that the groundwork (the 2021 MoU) is already in place​ (pravda.com.ua). According to Séjourné, the EU Commission’s upcoming raw materials plan will include Ukraine-focused projects and possibly the first extractions under EU support​ (pravda.com.ua). This signals that the partnership is moving from planning to execution, despite the ongoing conflict.

It’s also worth noting that Ukraine’s prospective EU membership (as an official candidate, with accession talks on the horizon) gives extra impetus to these initiatives. In the medium term, Ukraine could join the EU internal market, at which point its raw materials would count directly towards EU self-sufficiency targets. Even before full membership, aligning Ukraine’s policies with the EU (via the Association Agreement and this raw materials partnership) means Ukraine is being treated as a de facto extension of the EU’s raw material strategy. This is evident in language from the EconPol brief, which urges the EU to “deepen partnerships with resource-rich and politically stable countries” – explicitly identifying Ukraine as a future key partner for Europe’s resource security​ (econpol.eu). In tandem, the EU is also pursuing raw material partnerships with other countries (Canada, Kazakhstan, Namibia, etc.), but Ukraine’s candidacy and proximity make it unique.

In summary, the EU-Ukraine frameworks combine high-level political commitment with practical steps: policy convergence, joint ventures, data sharing, and investment support. If these efforts continue to advance, they will pave the way for Ukraine’s raw materials to steadily flow into EU value chains in the coming years, boosting resilience for both parties.

Conclusion and Outlook

As Europe strives to secure the raw materials critical to its green and digital transition, Ukraine stands out as a strategic opportunity – a resource-rich ally at the EU’s doorstep. The analysis shows that Ukraine has the geological potential to significantly enhance Europe’s supply chain resilience for several strategic materials (notably graphite, lithium, manganese, and titanium among others). In the near term, the ongoing conflict remains the biggest wildcard; peace is a prerequisite for large-scale investment and development of mines. Assuming the security situation improves, the coming decade could witness a transformation of Ukraine into a key supplier for Europe’s industries – effectively a new pillar of the EU’s raw material base.

Realizing this vision will require navigating challenges. Massive capital investment, infrastructure rebuilding, and technology transfer are needed to develop Ukraine’s deposits and build processing facilities. Governance and transparency in Ukraine’s mining sector will be crucial to attract European investors – progress on anti-corruption and regulatory stability will bolster confidence. Environmental and social safeguards must also keep pace, to ensure mining is sustainable and beneficial to local communities, in line with EU standards​ (ec.europa.eu). The multi-pronged strategy recommended by experts – combining resource development with expanding refining capacity in Europe and accelerating recycling and substitution (​econpol.eu) – should remain central. Ukraine’s raw materials are one piece of the puzzle for Europe’s supply security, albeit a potentially significant one.

The outlook is undeniably promising: coordinated EU-Ukraine efforts are already underway and set to intensify under the Critical Raw Materials Act umbrella. If Ukraine’s integration succeeds, Europe by 2030 could enjoy diversified, reliable access to critical minerals – with a portion coming from the soils of a democratic Ukraine. Such an outcome would enhance EU strategic autonomy, contribute to Ukraine’s economic recovery, and exemplify the resilience of supply chains built on partnership and shared values. In essence, the road to Europe’s raw material resilience may well run through Kyiv, and both sides are now actively building that road.

Further Information

• EconPol Policy Brief No. 72 (April 2025) – “Strategic Raw Materials in Ukraine: Opportunities for Strengthening EU Supply Chains?” by I. Gourevich. Insightful analysis of Ukraine’s mineral reserves, current role in EU supply, and strategies for integration​ – econpol.eu​. (EconPol Europe)

• European Commission – EU-Ukraine Raw Materials Partnership (2021) – Official press release on the strategic partnership to develop critical raw materials and batteries, outlining cooperation areas and objectives​ – single-market-economy.ec.europa.eu​single-market-economy.ec.europa.eu. (EC, 13 July 2021)

• EU Critical Raw Materials Act (2023) – European Commission proposal and factsheet on securing sustainable critical material supply for the EU, including targets (10% extraction, 40% processing, <65% single-source) and partnership tools. (EUR-Lex / European Commission) – ​project-syndicate.org

• World Mining Data 2024 – Comprehensive data on global mining output. Provides Ukraine’s 2018–2022 production figures for key minerals (e.g. graphite, manganese, titanium) and world rankings​ – world-mining-data.info​world-mining-data.info. (Federal Ministry of Austria)

• State Geologic Survey of Ukraine – Critical Minerals Investment Brief (2021) – Overview of Ukraine’s strategic mineral reserves and open investment opportunities. Contains reserve estimates (e.g. Ni 215 kt, Co 8.8 kt) and licensing status for lithium, titanium, etc. – ​es.scribd.com​es.scribd.com. (Derzhgeonadra/Ukr. Govt via Embassy publication)

• EU Official Statement on Raw Materials Cooperation (Feb 2025) – News report on EU Commissioner Séjourné’s remarks about launching EU-Ukraine critical raw material projects by March 2025, with a focus on graphite and implementation of the 2021 agreement​ pravda.com.ua​pravda.com.ua. (European Pravda/Ukrainska Pravda)

E-Analysis by ChatGPT, prompted by Insight EU